Recently I had the distinct pleasure of attending a couple of events that highlighted the scale and scope of four major development projects taking place in Oakland, California.
One of the most interesting projects is one that I drive by every day along the Oakland estuary directly across from my home town, Alameda. It’s called Brooklyn Basin for obvious reasons, its similarity to Brooklyn. The $1.5 billion housing project sits on 65 acres, has over a mile of waterfront trails and is bounded by the Embarcadero, Oak Street and the estuary. It consists of 200,000 square feet of offices and store fronts, 3,100 housing units and 30 acres of parks and open space all on gorgeous waterfront. Wow, now this is something I can get excited about. Take a look at this spectacular video by Michael Sechman.
Brooklyn Basin Rendering
Former Mayor Jerry Brown was able to see the future and thanks to him we are living it here in Oakland. His 10K Housing Initiative bet heavily on the future viability of our downtown (referred to as Uptown) neighborhood and nobody realized how important it would become until now. Oakland’s Uptown neighborhood was recently named the number one “great neighborhood” in California by the American Planning Association.
Jerry Brown’s initiative considered the needs of the city and public residents. The project revolved around proximity to transportation and has fulfilled its goal to create a pedestrian-friendly neighborhood with a multitude of housing types. When I use to drive down Telegraph examining the vacant swaths to condos and unused open space, I often wondered what and when the pay off would come. It surely has begun to change dramatically from the desolate unused square blocks it was just a few years ago.
The Telegraph Avenue streetscape improvement project from 2005 is getting additional consideration.
Not only would it reduce pollution & traffic, it would promote health by offering a safe alternative to driving. There is a bike lane and improved sidewalk access. In addition, business would benefit due to all the additional foot and bike traffic.
This video shows a May 2014 demo of the protected bike-lane.
And here’s a proposed graphic of the plan.
Data speaks 10 times louder than opinions. I heard this award winning author economist speak in a new way about real estate investing. His completely numbers driven approach to investing went against everything I had learned. It piqued my curiosity and caused me to look more deeply into his proven strategy.
Reproduced with permission from Robert Campbell, author of Timing the Real Estate Market.
Housing Prices Are Still Rising – But at a Rate-of-Climb that Continues to Slow
U.S. home prices rose in April, but the rate of annual gains has continued to fall from previous months. This is shown by the chart to the right, which shows the year-over-year returns from three major home price providers – the National Association of Realtors (N.A.R.), Case-Shiller, and the Federal Housing Finance Administration (FHFA).
While the annual numbers continue to worsen, the month-to-month valuations are still rising in all three home price indexes. This steady downtrend in market momentum suggests that this years’ high demand spring-to-summer selling season (that started in April) may turn out to be decidedly underwhelming, even though home prices should continue to rise in the summer months.
The Case-Shiller 20-City Index – which is represented by the darkest (and smoothest looking) line on the chart – rose 10.8% in April compared with 12 months earlier and continues to show the highest year-over-year gains of any of the home price indexes. With an annual gain of 12.4% in March 2014, the 20-City Index fell to its lowest year-over-year gain in 13 months. Continue reading
When Mr. Jerry Brown was sworn in office in 1999 as Oakland mayor, one of the first steps which he took was to unveil “Economic vision 10k” for the residents of Oakland. He laid down the vision and implementation road map for the residents of this region and promised that their living standards would have a positive change. Continue reading
Cost segregation is a relatively new practice that allows businesses to divide a building into multiple asset classes. Specifically, it is a tax planning strategy for both owners and renters that identifies tax savings and uses accelerated depreciation deductions to provide the most benefit to cash flow.
Depreciation deductions allow a portion of the property costs classified as real property to be reclassified as personal property, with lower depreciable lives that increase the owner’s depreciation deduction. Real property is typically depreciated over 39 or 27.5 years compared to reclassified property which may be depreciated over 3,5,7 and 15 years. Continue reading
While apartment building values are not driven by the same market factors that move housing prices, there is an undeniable correlation between the two asset classes. When single family home prices begin to slow, apartment building owners should take notice.
Home prices across the country continued to decline for the first part of 2014, according to data released recently by NAR and Case-Shiller. Despite the fact that last year was the best year on record for the Home Price Index since 2005, the dip has already increased concern that the market is slowing. Some economists attribute much of the slowing to seasonal factors. This information correlates with other data showing that the market is slowing- the National Association of Realtors Existing Home Sales report, showed a 5.1% decline in sales activity in January, and the National Association of Homebuilders also indicates a similar decline in builder confidence. National Home Price Index vs. San Francisco Home Price Index With Febuary being the fourth consecutive month that sales activity has decreased nationwide on a monthly basis, many institutional buyers are beginning to show some hesitation. While nationwide the index drops, San Francisco still shows growth, reminding us that real estate indicators and cycles need to be examined regionally.
Last week I closed the fastest deal of my life, in just three days! That is not to say that this was a goal of mine but here is how the story unfolded.
I met a new client named Ken who was an extremely savvy technology professional who was in a 1031 exchange and needed to close within 30 days. He had pointed out a property or two that he liked and one of them looked promising. It was a fully renovated duplex on the Oakland-Berkeley border.
1212 12th Street – 6 Units Oakland. Two and three bedroom units with off street parking.
I generally like to go in the direction that my clients are already headed so when Ken pointed out this property to me I immediately jumped on board, got us into contract and the inspection process underway. As the already-fast escrow unfolded we got bogged down with the lender who could not quite move fast enough. On top of that challenge, we learned that the duplex had a defective “non-livable” unit that was turning out to be an even bigger problem that the Berkeley building department was not willing to overlook.
1031 Exchanges and Extensions
Due dates for completing a 1031 Exchange are hard and fast, usually. Once you close on the sale of a property, you’ve got 45 days to identify a new property and 180 days to complete the close of a replacement property. In the event that you don’t meet those deadlines, your exchange will “fail” and you won’t be qualified for the tax deferral. However, when disastrous events such as; hurricanes, tornadoes, wildfires, floods or terrorist acts occur, the government may issue tax relief extensions, which conjointly can extend your 1031 deadlines.
This outstanding apartment unit was renovated and turned over by Nick Myerhoff and Myerhoff & Associates. Rents went from $950/mo to $1575/mo. The project took approximately 30 days at a cost of $8900.
This small studio apartment was also turned over by Myerhoff & Associates. It had not been updated for almost twenty years. It needed virtually everything except a bathroom.
We took rents from $650 to $950. The renovation included new windows, floors, fixtures, cabinets and counter top. We also rearranged the layout of the kitchen and added compact appliances.