Weighing Foreign Investment In LA
LA is still popular among foreign investors, but CRE experts say this year may be uncharted territory.
Gemdale USA Corp. president Michael Krupa said construction lending, in particular, is becoming more challenging to obtain, not only in LA but nationwide.
LA remains a very important market for Gemdale and other foreign equity investors and equity investors worldwide, according to Krupa.
"The Los Angeles real estate market fundamentals remain relatively strong across various property types," Krupa said.
Given the economic climate, the next 18 to 24 months could be cause for concern, according to Gaw Capital Partners senior vice president Mike Hu.
"As a result, we have been actively harvesting deals if the returns are at or above our original underwriting," Hu said.
Lenders are becoming more conservative.
"We've seen lower LTV ratios compared to the last cycle, and lenders have been more picky about the sponsor behind a deal," Hu said.
Hear from Hu, Krupa and other expert panelists at Bisnow's Capital Markets and Foreign Investment event at 7:30 a.m. March 16 at the Westin Bonaventure Hotel in DTLA.
