Perspective on Real Estate

January 19, 2005

January 26, 2005

February 23, 2005


Conferences tell the story

You can tell when real estate is hot by the prices being paid or the bankers' money available for mortgages, but also by the number and spread of real estate conferences all over the Southland.

The biggest annual conference is at the Century Plaza Hotel, in Los Angeles, on Feb. 14. It falls on Valentine's Day, when love is in the air: love of land, buildings, making a buck, owning a piece of a deal. That's what love is all about, and that's what a vibrant America may be all about.

People struggle to get a piece of the action in the form of cash flow, maybe joining others for a tenant-in-common investment so that amateurs and professional investors can buy something with critical mass and bigger cash flow instead of a simple 1031 exchange.

For the first time, the conference will feature an outstanding panel on this subject, with some important caveats to keep you out of trouble as the IRS takes a closer look at this powerful new trend.

The University of San Diego's Burnham-Moore Real Estate Institute has already this week held its annual foray into real estate, lending a well-deserved perspective on a complicated economy, where historic cap rates puzzle our sense of logic.

UCLA's Anderson School of Management will hold its focus on commercial real estate April 28, "Revitalizing Main Street with Retail and Mixed-Use Opportunities in the Urban Environment."

An example of the extraordinary strength of retail's expansion and changing nature will be the great Inland Empire's Rancho Cucamonga and the developing Victoria Gardens with institutional buildings, retail, entertainment and residential components ventured by Lewis Homes, Inland Empire's pioneering family and by Forest City Development of Cleveland, also an extraordinary family name.

Commercial development is getting more attention from investors again. The major reason that real estate will remain hot is that domestic and foreign investors see our real estate as a great marked-down bargain because of the fall in value of the U.S. dollar. It's a built-in discount sale.

I expect the stock market will discourage a lot of equity players because of its consistent volatility, regardless of a Republican administration that is supposed to make the market rock and roll. A volatile stock market that can't seem to gain traction beats the drum for the turn to real estate. The attraction is cash flow with a proven case of appreciation because investor demand is so huge. There is good and bad news to that equation: Too much money makes too many mediocre deals look good when they are more like lures for greater fools.

Watch for future conferences by USD in work force housing, as well as commercial. These are solid conferences that are most worthwhile.

In the meantime, my new class in leadership and ethics will become curriculum for graduate programs in April at the New School of Architecture. My annual February lecture on Community Economic Development at San Diego State University for leaders of not-for-profit organizations will keep my mind focused on the next generation of developers and professional practitioners.

It's time to do more than make money. It is time to leave the place better than we found it. That's not a fantasy but a necessity, as more people enter real estate as their great expectation.

The San Diego regional real estate market will continue to gain strength as high-tech returns for another engagement in an economy enriched by great universities that attract faculty and practitioners. New investments and buildings will be built along what I have called our "corridors of power," stretching across Rancho Bernardo, Poway, Scripps Ranch, along I-15 and 1-5 and 55.


Goodkin has been a business ethicist and housing analyst since 1956. He may be reached at sanford.goodkin@sddt.com.


January 19, 2005

January 26, 2005

February 23, 2005