Arcadia REALTOR Magazine - September/October 2016 by Arcadia Association of REALTORS®

REALTOR®

OFFICIAL PUBLICATION OF THE ARCADIA ASSOCIATION OF REALTORS®

PROUDLY SERVING THE REALTORS® OF ARCADIA, BRADBURY, DUARTE, MONROVIA & SIERRA MADRE

ANNUAL COMMERCIAL & INVESTMENT ISSUE!

Introducing the 2016 Commercial & Investment Committee See page 11

ARCADIA REALTOR® · JANUARY/FEBRUARY 2015SEPTEMBER/OCTOBER 2016 · ARCADIA REALTOR®

Cooper’s Comments

REALTOR® 2016 ASSOCIATION OFFICERS Roy Blume 2016 PRESIDENT Sylvia Ramos PRESIDENT-ELECT Kelvin Chang TREASURER Joseph Pacilio IMMEDIATE PAST PRESIDENT BOARD OF DIRECTORS Ryan Asao Julie Bencosme Cecil Griffin Fred Madjar Yvonne Rosas-Petty Irene Truong Mike Vachani

C.A.R. DIRECTORS Ryan Asao Andy Bencosme Julie Bencosme Roy Blume Margaret Garemore Joseph Pacilio Sylvia Ramos Randall Traw Mike Vachani Kelvin Wong

ASSOCIATION STAFF

Robin Allen Ext. 307 Director of Finance / Office Manager Robin@TheAAR.com Michael Beltran Ext. 302 IT Director / Webmaster Michael@TheAAR.com Brenda Faltes Ext. 304 Director of Membership & Professional Standards Brenda@TheAAR.com Jamie Hu Ext. 309 Director of MLS Data Integrity & Affiliate Liaison Jamie.Hu@TheAAR.com Stephanie Maertens Ext. 303 Director of Education & Commercial Real Estate Stephanie@TheAAR.com Laura Thai Ext. 304 Director of Broker Compliance & Member Outreach Laura@TheAAR.com Andrew Cooper Ext. 308 Chief Executive Officer Andrew@TheAAR.com

ARCADIA ASSOCIATION OF REALTORS® 601 South First Avenue Arcadia, California 91006 626.446.2115 626.446.4072 FAX www.TheAAR.com

You Should Be In Commercial(s)! Welcome to the annual Commercial/Investment Issue of the Arcadia Realtor® Magazine! Have you visited Downtown Los Angeles lately? It’s absolutely amazing to see the flurry of high-rise construction and development going on. And it’s not just limited to DTLA. Commercial/Investment development is rampant all around the world in metropolitan cities and even here in the suburbs of Los Angeles. Always on the forefront of Local Association emerging trends, the Arcadia Association of REALTORS® was one of the first local REALTOR® Associations in the entire country to start a Commercial/Investment committee many years ago. At first we were looked upon as renegades, after all, we’re a REALTOR® Association and most REALTORS® don’t engage in commercial real estate… or do we?? As a result of our forward thinking leaders starting a Commercial Real Estate Committee including the visionary George Monte, AAR’s 2008 Past-President, we’ve been recognized both statewide and nationally for our Commercial achievements and accomplishments. As an example, the AAR has won the prestigious National Association of REALTORS® ACE Award (Accredited Commercial Excellence) 2 out of the past 3 years. Less than 1% of local associations around the country receive this award so we’re very proud of these achievements. The AAR has had quite a few past and present members involved in Commercial Real Estate whom have been instrumental in getting NAR® and CAR® to recognize that commercial real estate is a vital area of business for REALTORS® and not just commercial-only practitioners. These members include the aforementioned George Monte, Paulina Lee, AAR P.P. in 2011, Richard Stone, AAR P.P. in 2004, and Mike Vachani, current Commercial Committee Chair and P.P. in 2013. On a local level Nick Zigic and Tim Johnson should absolutely be mentioned. In our ongoing efforts to help our members increase their overall production, the AAR is hosting our annual Commercial Real Estate Day entitled “San Gabriel Valley Development: Learn Tricks of the Trade from the Experts of Local Development” on Friday, October 7 at the Doubletree Hotel in Monrovia. We’re doing this as a joint venture with the San Gabriel Valley Economic Partnership so it promises to be a great event. Please see the ad located on page 11 of this magazine for more details. The Commercial Committee also offers a monthly Commercial Real Estate Education and Networking Session on the first Thursday of every month. Come to learn about Commercial Real Estate, network with your peers and enjoy a free lunch. The next session is Thursday, October 6 at 11:00am here at the AAR Building. On behalf of our 2016 Commercial/Investment Committee Chair, Mike Vachani, and the entire C/I Committee we look forward to seeing you at an upcoming Commercial event very soon. Hoping to see you in Commercial(s) very soon,

Andrew Cooper 2

ARCADIA REALTOR® · SEPTEMBER/OCTOBER 2016

Chief Executive Officer

SEPTEMBER/OCTOBER 2016 | VOLUME 20 | NUMBER 5

Contents 7

On the Cover

Regular Features 2

Cooper’s Comments

Market Matters

Attorney Comments

Affiliate Corner

Commercial Insurance Coverage Insights Coverage under a blanket policy is generally triggered in the event of any loss associated with a named property.

10 AAR New REALTOR® Members The AAR welcomes its newest REALTOR® Members of 2016.

Dave Freeman, AAR Legal Counsel

Additional Content

Market Statistics for the San Gabriel Valley

Through the Lens

11 Introducing the 2016 Commercial & Investment Committee Promoting programs and services relating to commercial and investment properties.

Andrew Cooper, Chief Executive Officer

12 What China’s U.S. Buying Spree Means For The Future Of Hospitality & Commercial Real Estate At the top of their investment targets are U.S. companies in the tech, health care and residential and commercial property...

A Look at What’s Happening Around the AAR

“Make a House a Home... Make it your own, all in one loan...” Michael Encarnacion, imortgage® SEPTEMBER/OCTOBER 2016 · ARCADIA REALTOR®

Market Matters Market Statistics for the San Gabriel Valley - July 2016

City

Arcadia Arcadia Duarte El Monte El Monte Glendora Glendora Monrovia San Gabriel San Gabriel San Marino Sierra Madre Temple City

Zip Code

91006 91007 91010 91731 91732 91740 91741 91016 91775 91776 91108 91024 91780

Single Family Homes

Condominiums

Sales of Price Price % Single Family Median SFR Chg from Homes ($1,000) July 2015

Price Median Condo ($1,000)

26 14 15 6 8 18 36 22 14 12 13 11 23

$1,240 $2,200 $551 $400 $425 $520 $678 $670 $820 $512 $1,900 $895 $780

19.8% 73.2% 35.4% -7.9% -8.6% 14.9% 6.0% 4.2% 5.8% -12.8% -10.9% -6.9% 7.4%

Sales Count Condos

4 9 7 1 4 4 4 11 0 3 0 1 3

SFR Only

Price & Median Chg from Home Price/ July 2015 Sq. Ft.

$640 $460 $378 $451 $379 $438 $476 $420 n/a $425 n/a $532 $420

-3.0% -16.2% 17.0% n/a -9.0% -2.1% 1.0% -4.5% n/a -14.8% n/a -11.3% -26.1%

$669 $532 $376 $274 $326 $350 $396 $438 $483 $458 $811 $646 $496

Market Statistics for the San Gabriel Valley - August 2016 Single Family Homes

City

Arcadia Arcadia Duarte El Monte El Monte Glendora Glendora Monrovia San Gabriel San Gabriel San Marino Sierra Madre Temple City 4

Zip Code

91006 91007 91010 91731 91732 91740 91741 91016 91775 91776 91108 91024 91780

Condominiums

Price % Sales of Price Chg from Single Family Median SFR August Homes ($1,000) 2015

29 20 16 6 15 19 34 25 14 11 19 13 26

$1,118 $1,690 $438 $465 $410 $515 $598 $581 $765 $585 $1,900 $1,143 $725

ARCADIA REALTORÂŽ Âˇ JANUARY/FEBRUARY 2016

27.0% -10.3% 7.1% 16.3% 7.6% 7.3% -13.3% -2.2% -0.5% 7.8% -7.3% 7.5% 3.5%

Sales Count Condos

9 13 10 2 6 6 7 9 2 4 0 2 6

Price Median Condo ($1,000)

$750 $558 $328 $468 $398 $408 $520 $469 $433 $570 n/a $580 $475

SFR Only

Price & Chg from Median August Home Price/ 2015 Sq. Ft.

-4.2% 3.5% -18.9% 25.6% -18.4% 19.9% 37.7% 13.0% n/a 47.1% n/a 4.3% -4.8%

$516 $583 $398 $459 $298 $379 $389 $436 $491 $420 $913 $527 $439

Source: CoreLogic.com

Attorney Comments

By Dave Freeman, Association Counsel

Judgment Liens When a party succeeds in getting a judgment against another person, corporation or entity, one form of enforcement is to record a judgment lien in the County Recorder’s office. This will show up and be a claim on any future sales of the property the judgment debtor may own, now or in the future, until the lien is removed. It is a very simple process, whether the judgment was accomplished in Superior Court, or in Small Claims Court. The judgment and the lien are only good for ten years, in California, but can be renewed prior to their expiration. They can also be removed by Bankruptcy, Foreclosure by a senior lienholder (trust deed holder), and the Homestead Act, which gives the debtor first claim on some assets. If the lien is still valid, and not about to expire, and you are acquiring a listing on the property, you may suggest the seller consult with an attorney, regarding the possible settling of the lien.

Injury To Employee Of “Unlicensed Contractor” Here I am discussing the liability of the homeowner (HO) for the injuries to the Employee. In this case, the contractor was licensed, and had workers’ comp (WC) insurance on

his Employees. However, shortly after the signing of the contract to paint the HO’s house, and before work started, the contractor hired additional Employees, without the requisite added WC insurance. A contractor, who is without WC insurance is technically unlicensed. Also, a contractor who does not have WC insurance for all of his Employees is technically unlicensed. If the contractor is unlicensed, the Employees may be considered to be Employees of the HO, and frequently sue the HO for damages due to the injury. In the current case the judge ruled against the Employee in his suit against the HO, and the Appellate Court agreed. However, a word to the wise: many courts have ruled against the HO in similar cases. Be sure the contractor is licensed and has adequate insurance for ALL his Employees, and be sure the HO has plenty of liability insurance.

Dual Agency Liability A recent case which will have a large effect for many years in the Real Estate industry concerns a person who purchased a mansion in Malibu. He used a Coldwell Banker agent in Beverly Hills, and the seller was represented by an agent in a different Coldwell Banker office.

broker, claiming failure to disclose issues concerning the square footage of the property. The city of Malibu includes some outdoor living areas in determining square footage, which impacts whether the property can be expanded. This was disclosed in the written documents given to the buyer, and signed for. However the buyer claimed misrepresentation, failure to disclose and other claims. In the trial, the judge ruled the seller’s agent did not owe a fiduciary duty to the buyer, and the jury ruled for the agent/brokerage. The appellate court overturned the verdict, and Coldwell Banker appealed to the California Supreme Court. The matter was finally heard September 7, 2016, and we are anxiously awaiting a ruling. The buyer feels the agent should have encouraged him to hire experts concerning the square footage issue. Solution: if you see a possible issue that the buyer may not totally understand: - Do disclose in writing, and - Encourage the buyer to hire the appropriate expert(s) to explain the situation.

The buyer sued the seller’s agent and

SEPTEMBER/OCTOBER 2016 · ARCADIA REALTOR®

through the lens

A Look at What’s Happening Around the AAR

ssor Los Angeles County Asse R Jeffrey Prang visits the AA

t 2016 E4C Golf Tournamen

YPN EPIC Water War RPAC Fundraiser

at Friendly Hills Country

ARCADIA REALTOR® · SEPTEMBER/OCTOBER 2016

Club

COMMERCIAL INSURANCE COVERAGE INSIGHTS Blanket Insurance Coverage for Commercial Properties Most commercial properties use a form of insurance referred to as “specific coverage,” in which a specific property is insured for a named risk, such as fires, floods, thefts and more. However, specific coverage is also somewhat limited; oftentimes one policy will only cover one named risk at one location. Blanket coverage, on the other hand, can offer protection for a number of different properties and risks. Under a blanket policy, you can group together coverage for multiple buildings and the property in them as long as the buildings are all similar in nature and function. As a result, blanket coverage can make it easy and convenient to cover all the risks that threaten your properties. However, it’s important to know the characteristics of blanket coverage to see if it can adequately protect your business. Blanket Insurance Basics Because blanket insurance can offer coverage for multiple locations, it can often be useful for businesses such as apartment complexes and restaurant chains. However, properties

covered under a blanket policy must be similar in nature. For example, a blanket policy would usually not a cover a business’s warehouse and storefront under the same policy.

Coverage Limits Under blanket coverage, all of your covered buildings and the property in them is covered until the total policy limit is hit.

Coverage under a blanket policy is generally triggered in the event of any loss associated with a named property.

For example, imagine if your business owns three warehouses that are each valued at $1.5 million. As a result, you would purchase a blanket policy with a limit of $4.5 million to protect all three properties. If one warehouse was destroyed in a fire and the cost to replace the building was actually $1.75 millionmore than the originally estimated value of the property-your blanket policy would still provide full coverage (up to the $4.5 million limit). A specific coverage policy in the same scenario would only reimburse you up to the limit of the single property.

This can include fires, floods, thefts, personal injury liabilities and more. And, although it typically costs more than specific coverage, blanket coverage often provides broader protection than specific coverage by protecting against all of these liabilities simultaneously. Additionally, blanket policies also offer protection for any equipment, inventory or furnishings located in or around covered structures. Unlike specific coverage, which only provides protection for items that are individually listed in the policy, blanket coverage provides broad coverage for your business’s property-even if it’s moved between two or more locations. This allows for more flexibility if you need to frequently move equipment to conduct business.

Finding the Right Policy for You Although blanket coverage often provides broader protection than specific coverage, the policy that’s right for you can vary based on a variety of factors. Contact us today at . We can work with you to determine your unique risk profile and which coverage is right for each of your properties.

Property Management Professional Liability Insurance Property managers wear many different hats in the course of their jobs. In addition to overseeing the maintenance, security and overall welfare of the properties they manage, at times they may also function as leasing agents, real estate agents, appraisers, consultants or construction managers. To do so, they must be knowledgeable and up to date on zoning regulations, tenant laws, tax information and property values. In addition, they are responsible for making sure lease agreements, purchase and sale agreements, and work orders are complete, accurate and submitted to the proper authorities when necessary. Due to the wide array of duties and responsibilities they have and the tight deadlines they operate under, even the most thorough and meticulous property managers inevitably make errors. Whether it’s an error of commission, such as entering the wrong information into a purchase agreement, or an error of omission, such as failing to disclose known pollutants, the result is often the same-a lawsuit.

Without the right type of insurance, the cost of defending a lawsuit can be financially devastating for a property management company. Property managers often mistakenly believe their Commercial General Liability (CGL) policies will protect them from lawsuits stemming from a negligent act, error or omission, but a typical CGL policy only covers bodily injury, property damage, personal injury and advertising injury claims. To protect themselves from claim-such as negligence, misrepresentation, inaccurate advice, and violation of good faith and fair dealing-property managers must instead turn to property management professional liability insurance. What is Property Management Professional Liability Insurance? Property management professional liability insurance, also known as Errors & Omission (E&O) insurance, is supplementary liability insurance designed to safeguard a business against a catastrophic loss in the event of a lawsuit due to a negligent act, error or omission by the property manager or someone in his

or her employ. The policy covers the sizable legal defense costs incurred during the course of a lawsuit as well as the final judgment if the business owner does not win the lawsuit. In addition to claims of error, omission or negligence, this type of coverage can also be designed to protect against slander, libel and breach of contract. Policies typically do not provide coverage for non-financial losses or for intentional or dishonest acts. Property management professional liability insurance policies generally have both a claim limit and an annual limit, which is based on the insured’s exposure. The claim limit is the maximum amount that will be paid for any single event, and the annual limit is the maximum that will be paid in any one year. Typical limits range from $250,000/$500,000 to 2,000,000/$4,000,000 and differ depending on the individual business. Because there isn’t a standard policy, an experienced agent who understands your needs is invaluable.

By S. Sanders Company, Courtesy of Linda Moore This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or 7 ARCADIA REALTOR® · JANUARY/FEBRUARY 2015 an insurance professional for appropriate advice.

ARCADIA REALTOR® · JANUARY/FEBRUARY 2015

AFFILIATE Corner

“Make a House a Home... Make it your own, all in one loan...” By Michael Encarnacion, imortgage® Are you purchasing a home that requires a few updates? Do you want to upgrade your home to be ENERGY SMART? Do you want to have the opportunity to increase your home value, to elevate to a desired aesthetic appeal, or to customize and personalize your home to fit your lifestyle? It is easier than you think… Today there are a variety of home loans that allow for qualifying, cost effective, energy efficient renovations to be financed into the loan. What is Renovation Financing? With this loan a borrower can purchase or refinance a property and include the additional money for required repairs or optional improvements & renovations. Borrowers can purchase a home that does not require rehab and finance the cost of “modernization” or cosmetic repairs. This is done as ONE loan with ONE closing and ONE mortgage payment. All work, optional and required, is completed AFTER closing. Renovations can comprise of updates on appliances, painting, kitchen and/or bathroom remodels, energy efficient improvements, plumbing, roof repairs and more! Our Renovation Programs Include: • FHA 203K & FHA 203K Limited - Standard FHA Guidelines Apply - Owner Occupied, Primary residence only - Seller Concessions allowed up to 6% • VA Renovation Mortgage - Standard VA Guidelines Apply - Owner Occupied, Primary residence only - Seller Concessions allowed up to 4% • Conventional Homestyle Renovation - Purchase or Refinance SFR, PUD, 2-4 Unit & Condos - Primary, Second Home or Investment Properties - Seller Concessions allowed up to 6% If you can already tell: the MAJOR BENEFITS for our buyers will be a wider range of homes available to them and to be able to provide financing for homes otherwise out of reach or undesirable; for our sellers the ability to sell their properties truly “as-is” and close on time. The allowable renovation dollar and type of renovations varies from loan to loan. The KEY is working with an experienced renovation home loan consultant. Let me direct you to the loan that will work best for your specific renovation needs. Michael Encarnacion, imortgage. NMLS ID 490811. For more information, contact Michael at: 909-200-9946 Mobile / 909-912-7814 Office or michael.encarnacion@imortgage.com Rates, terms, and availability of programs are subject to change without notice. Corporate NMLS ID 174457. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act CRMLA 4131040.

SEPTEMBER/OCTOBER 2016 · ARCADIA REALTOR®

Welcome, New Members!

NEW REALTORS® SEPTEMBER 2016 Oscar Andrade, Re/Max 6000 Realty; Tamara Avetisyan, Recap Properties; Shawna L. Berman, Coldwell Banker Dynasty T.C.; Robert Chan, Long Dragon Realty Group, Inc.; Emily L. Chen, IRN Realty; Nan Cheng, IRN Realty; Liza M. Chu, Keller Williams Realty; Rachel A. Dario, Berkshire Hathaway Home Service; Nan Huang, Supreme Investment Corporation; James E. Knull, Berkshire Hathaway Home Service; Hon S. Lai, Highland Real Estate; Kelly Le, New Century;

Daniel K. Lee, Highland Real Estate; Jonathan Lee, Highland Real Estate; Nero Li, Supreme Investment Corporation; Ankuo Lin, Coldwell Banker George; David Mao, IRN Realty; Ellen G. Mikami, Keller Williams Market Center; Rong Peng, IRN Realty; Derek E. Podrebarac, Podley Properties; Dreem Qin, Keller Williams Realty; Gracie Rodriguez, Coldwell Banker New Century; Truman Trinh, Long Dragon Realty Group, Inc.; Benjamin G. Wang, IRN Realty;

PeiXia Cathy Wang, Coldwell Banker George; Xiling Wang, Highland Real Estate; You Abdrew L. Wang, Highland Real Estate; Fay Jan Wong, Coldwell Banker Arcadia; Joanne M. Wong, Premier Investors Real Estate; Xi Hanna Yao, Coldwell Banker George; Jay Ying, Coldwell Banker George; Austin Y. Yuan, Keller Williams Realty; Howard Yue, Howard H. Yue, BROKER; Na Zhai, Highland Real Estate; Jianhua Zhang, IRN Realty; Qiang John Zhou, Supreme Investment Corporation

Also shown: Roy Blume, 2016 AAR President and Julie Bencosme, 2016 Membership Committee Vice-Chair

Primelending offers a wide variety of loan products Whether you are a first time homebuyer or looking to refinance your current mortgage, We can offer you step-by-step personalized guidance throughout the entire loan process.

Call for the best choice in home loan options! Diane Balsamo Senior Loan Originator Direct: 626-755-5764 10

dbalsamo@primelending.com NMLS: 482962

ARCADIA REALTOR® · MAY/JUNE 2016

• FHA Loans • Conventional Loans • Renovation Loans

• Jumbo Loans • Rate Float Down • Refinancing Programs

INTRODUCING The Commercial/Investment Committee

Meet The Committee Members

SGV DEVELOPMENT

Mike Vachani

Learn Tricks of the Trade from the Experts of Local Development

2016 Commercial Committee Chair

Friday, October 7, 2016

It is my pleasure to introduce the 2016 Commercial & Investment Committee: I am your Chairperson, Mike Vachani, and the team consists of vice-chairs Linda Lim and Nick Zigic, along with the following committee members:

Julie Arballo Roy Blume Shao Chen Laura De Jesus Girgis Eskander Daivid Fu Elia Fuentes David Hyun Phoebe Lew

10:00am to 3:00pm

Check-in begins at 9:30am Networking Reception from 3:00pm to 4:00pm DoubleTree Hotel 924 West Huntington Drive Monrovia, CA 91016

Early Bird Registration: $69 (on or before October 3rd)

Regular Registration: $89 (on or after October 4th)

INCLUDED IN PRICING: Parking, Buffet Lunch, Networking Reception with Heavy Hors D’Ouevres

WHY YOU SHOULD ATTEND:

Wen Francis Liu Sylvia Luong Fred Madjar George Monte Jerry Mora Careayre Rambeau Angie Tang Irene Truong

✶ Learn the entire development process ✶ Hear a San Gabriel Valley commercial market update ✶ Hear about current city development projects ✶ Learn what development projects cities want to see ✶ Learn how to work with the cities ✶ Networking with other commercial/ investment REALTORS® and City Managers SEE BACK OF FLYER FOR DETAILED LIST OF SPEAKERS AND TOPICS To register for this event, please visit www.TheAAR.com and click on the event title under “Upcoming Events” E V E N T S P O N S O R S

Who Are We And What Do We Do? We serve the membership in exchanging property and client information, developing and promoting programs and services relating to commercial and investment properties, enhancing members knowledge of such properties, practices and procedures, facilitating teaming when appropriate to accomplish specific transactions and to encourage networking between members. Also hosts a monthly education session that features a different commercial real estate related topic each month. We will seek to enhance member’s freedom and ability to conduct their individual business successfully with integrity, professionalism and competency and through collection action, to better serve the public and promote the preservation of real property rights the role of REALTORS® in real property transactions. The Commercial & Investment Committee meets on 1st Thursday of each month at 9:30 a.m. at the AAR Building. Following the Committee Meeting is the Commercial Networking and Education Session.

Commercial Networking and Education Session - First Thursday of Every Month! A monthly education offering hosted by the Commercial Committee. A different commercial-related topic is presented every month. For the month of October, the topic is “Commercial Financing 101”. There is also a networking opportunity, lunch and the opportunity to pitch your commercial wants/haves/needs. All are welcome to attend, including Non-AAR Members.

Agenda of Speakers / Topics 10:00am to

12:00pm

Lewis Management Corp.

“Developing the San Gabriel Valley from Acquisition to Disposition” Bob Martin

Vice President Managing Director - Land Acquisition Lewis Management Corp.

12:00pm to

Lunch(Included)

1:00pm

“Valuing Real Estate Beyond the Last Few Deals”

1:00pm to

1:45pm

Christian Redfearn, PhD

Borstein Family Endowed Professor of Real Estate Price School of Public Policy, University of Southern California

1:45pm to

2:00pm

“SGV Economic Powersite - A Powerful New Tool for Commercial Real Estate Professionals” Regina Wang

Director of Marketing and Communications San Gabriel Valley Economic Partnership

2:00pm to

3:00pm

San Gabriel Valley City Managers “Local Commercial Development Opportunities & Insights to Working with the City ” Dominic Lazzaretto

City Manager City of Arcadia

Minh Thai

Economic Development Director City of El Monte

3:00pm to

4:00pm

Darrell George City Manager City of Duarte

Bill Manis

City Manager City of Rosemead

Oliver Chi

City Manager City of Monrovia

Bryan Cook

City Manager City of Temple City

Networking Reception with Hors D’Oeuvres (Included)

SEPTEMBER/OCTOBER 2016 · ARCADIA REALTOR®

What China’s U.S. Buying Spree Means For The Future Of Hospitality & Commercial Real Estate Ed Fuller, Forbes Contributor

The Chinese are on a U.S. buying spree like no other. Since the beginning of the year, Chinese investors have announced interest in, or closed on, several multi-billiondollar deals on a variety of American enterprises, including GE’s appliance division, Strategic Hotels & Resorts (owner of numerous luxury properties here and abroad), a construction manufacturer, the Chicago Stock Exchange, Carlson Hotels (owner of the Radisson brand), Hollywood’s Legendary Entertainment Group, Google’s smart phone hardware division (Motorola) and Starwood Hotels & Resorts (ultimately acquired by Marriott International after a heated bidding war). According to CNBC, the average deal announced so far this year amounts to $1.5 billion, eight times greater than last year. This year’s pace comes on top of the all-time high, record-breaking $15 12

billion they plowed into the U.S. in 2015, which was a 30% increase over the previous year. At the top of their investment targets are U.S. companies in the tech, health care and residential and commercial property sectors especially in tourism and hospitality. According to a report by the National Committee on U.S.-China Relations and the Rhodium Group, “investments in 2015 included hotels (among them the Red Lion Hotels, Waldorf Astoria New York, Waldorf Astoria Chicago and the Hyatt Regency Orange County), golf courses (including more than 20 Myrtle Beach golf courses in South Carolina) and travel logistics (such as new operations by Hainan Airlines in San Jose).” Chinese nationals the largest international buyers of U.S. residential and commercial property

ARCADIA REALTOR® · SEPTEMBER/OCTOBER 2016

Meanwhile, the Asia Society and the Rosen Consulting Group reported that, after having invested more than $110 billion in U.S. real estate over the past five years, Chinese nationals are today the largest international buyers of U.S. residential and commercial property. And there’s no end in sight. According to their study, Chinese U.S. property investment is expected to double to $218 billion in the second half of this decade. Folks who were around in the mid1980s will tell you we’ve been down this road before. In those days, it was widely believed that Japanese investors rarely turned down a U.S. real estate opportunity, buying up such trophy properties as Rockefeller Center in New York and the Pebble Beach golf complex in California. By 1991, however, their appetite waned as financial conditions in Japan changed

dramatically and the U.S. property market went into a tailspin. This time is different however, noted the Asia Society study, citing “the combination of the high volume of Chinese investment and breadth of its participation across all real estate categories.” Big property deals such as Anbang insurance group’s offer for Starwood make a lot of noise, but the Asia Society study points out that residential purchases by the Chinese has far outpaced their investment in commercial land and buildings. The motivation for residential purchases Over the past five years, Chinese buyers spent about $17 billion on U.S. commercial real estate while spending roughly $93 billion on homes in the U.S. over the same period. Last year they paid about $832,000 per U.S. home in high profile cities like New York, Chicago, Miami, Los Angeles, Las Vegas and San Francisco. The Society indicated that Chinese purchase of residential property is

primarily motivated by a desire for second homes; primary residences for those moving to the U.S. on EB-5 investor visas or as rental or resale investments. Concerns about the stability of the renminbi exchange rate have accelerated the pace of Chinese commercial investment abroad since the middle of 2015.

which they’ve invested. As their countrymen increasingly travel the world, just like generations of Americans and Europeans before them, they will want to stay in hotels with which they’re familiar back home. Soon, it will be commonplace to find hotel brands developed

Motivations aside, China’s interest in investing in the U.S. has legs that carry implications for our enterprises and communities alike. When coupled with the 100 million mainland Chinese travelers expected to visit the U.S. annually by 2020 it’s clear the U.S. travel and hospitality industry and business community at large need to prepare for a changing landscape. Expect more Chinese lodging brands For the travel and hospitality industry, it won’t be long before we see mainland Chinese hoteliers exporting their national lodging brands to the U.S. and other countries to complement the high-profile global brands in

by hoteliers like Jinling Hotels & Resorts or Jin Jiang International Holdings sitting side by side U.S. brands like Hilton, Sheraton, Hyatt or Marriott in cities throughout the U.S. Across the country, already more than 100,000 Americans get their weekly paychecks from a company based in China. That number will grow exponentially in coming years. As mainland Chinese investors continue to buy U.S. companies and brands and establish their own enterprises here, they will be eager to become members and leaders of the local chamber of commerce, to join the neighborhood PTA, represent their companies on area social and charitable boards and so on-just as our nationals who work and live abroad do in the countries in which they reside. All this should make for interesting days ahead for us all. Let’s make the most of the opportunity. - Ed Fuller, Forbes Contributor

ARCADIA REALTOR® · JANUARY/FEBRUARYSEPTEMBER/OCTOBER 2015 2016 · ARCADIA REALTOR®

Arcadia Association of REALTORS® 601 South First Avenue Arcadia, California 91006

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(626) 869-8787 33 East Huntington Drive • Arcadia, CA 91006 romy@rahmanianlaw.com • www.RahmanianLaw.com

Insure it all. Prices fall.

I can help you save time & money. One agent for all your insurance needs saves time. And Allstate’s multi-policy discounts are an easy way to save money. For affordable protection for your car, personal watercraft, snowmobile and more, call me first.

Leticia Pomes 626-286-7734

Pomes Insurance Services, Inc. 9160 E Las Tunas Drive Temple City, CA 91780 leticiapomes@allstate.com CA License #: 0C42479

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