Event Blog

The Southern California Development Forum (SCDF), an organization that provides networking opportunities for those in the real estate community, hosted a panel discussion about justice, equity and inclusion in the real estate industry in January of this year. 

Chris Rhie, associate principal of Buro Happold, an international consultancy of engineers and consultants, served as the moderator for panelists from the Mayor’s Office of Oakland, the planning department for the City of San Diego and the City of West Hollywood. Chris began the conversation by asking what it means to have equitable access to physical spaces.

Equitable Transportation  

Warren Logan, policy director of mobility and interagency relations for the Mayor’s Office of Oakland, is focused on advancing racial equity in transportation. To help the city connect people from their homes to jobs, Logan wants to expand access to different types of transportation that include bicycling, scooter riding and light rail transit. 

“The goal is to advance mobility justice, to change the way that we move around the region and to restore some of the really racist harms and injustices that prevailed by putting freeways where they work,” said Logan. “In Los Angeles for example, you can track where all of the lowest income people were located, based on where the freeways were placed.”

Lindsey Horvath, mayor of the City of West Hollywood, is working to bring an extension of the Crenshaw rail into West Hollywood to connect the two communities. Horvath’s team is also creating a new social justice task force, which will be comprised of residents, business owners, community members and stakeholders. To help create an equitable policy to access West Hollywood.

Housing Stability For All 

Nancy Graham, development project manager of the City of San Diego’s Planning Department, believes that the city will not have equity until everyone owns a home. Graham’s department, which is working diligently to build as many homes as possible, understands that the development community needs a lot of regulatory flexibility to respond to constantly changing markets. The city is allowing developers to choose the height of the property near transit and the number of units. 

James T. Butts, mayor of the City of Inglewood, has placed a 3 percent cap on rent increases per year and a moratorium on evictions to help residents stay housed during the pandemic.

Horvath is also supporting renters in West Hollywood. “I think we are the first and maybe the only city in the country to incorporate the idea of stabilizing rents,” said Horvath. “People were really looking to protect housing and I think we're seeing housing as a primary issue of equity.” 

Shifting Demographics 

Logan recognizes a shift in the demographics in Oakland. He claims that Oakland’s black and brown neighborhoods used to center in the downtown area, but now, Logan is seeing those residents move to places farther away.  

Graham is also seeing residents moving farther out of San Diego and her team is trying to make sure that jobs follow the new housing.

Equity With A Budget  

San Diego has spent about 10 percent of its budget on social services for its most vulnerable community members. Before COVID-19, San Diego had $100 million in reserves, which was about its annual budget.

“You have to be nimble with your budget and plan to make sure that you can weather a very difficult storm like COVID-19 because the people who are at the margins are even further marginalized and more at risk,” said Graham.  

Equity In The Real Estate Industry 

The architecture, engineering and construction industries can help advance equity. Logan is constantly pushing contractors and subcontractors to hire people from Oakland. 

In West Hollywood, Horvath is encouraging larger development projects to include public space on private land. 

“If you make land more open, you start building community,” said Horvath. “You can make a better project if you bring equity onto the table.”

Feel free to use these equitable strategies to support your community.

The Southern California Development Forum (SCDF), an organization that provides networking opportunities for those in the real estate community, hosted a panel discussion in late November 2020 about the future of student housing in the Southern California market.

Jason Taylor, vice president of American Campus Communities, one of the nation's largest developers of high-quality student housing apartment communities, served as moderator for panelists from The Scion Group, Brailsford & Dunlavey, UCLA and USC. Taylor began the conversation by asking what changes they see in student housing.

Student Housing Is Still Thriving  

In most university markets, occupancy levels outperformed expectations for the fall of 2020. Students in their freshman year view on-campus living as a rite of passage.

Colleges and universities are faced with financial challenges. Current short- and long-term financial strategies must be redirected to address potential cash flow shortages, financial solvency and future viability.

The drop in enrollment at community colleges ranges from 10 to 30 percent, said Kim Wright, a senior associate with the program management firm of Brailsford & Dunlavey. She noted that many low income and first-generation students choose not to enroll this year and that international student enrollment had also seen a significant decline. But Pearlman anticipates higher student enrollment at the community college level in the near future because of the unavailability of beds at four-year state institutions which have seen double-digit increases in applications. He said that community colleges are adding housing during the pandemic to compete with other community colleges.

USC welcomed about 720 spring admit first-year students, who started their college careers in January 2021, while UCLA saw record enrollment for its current freshman.

“We could have been close to 100 percent occupancy based on demand. Our students wanted to be here,” said Brian MacDonald, director of residential education for UCLA. He doesn’t expect a change in occupancy for the winter quarter and he is optimistic about the spring.

New Student Housing on Demand

UCLA and USC have put their RFPs for student housing projects for 2021 on hold but Wright predicts that there will be an uptick in the freshman and sophomore classes for 2021 and 2022, and suggests that colleges should plan to move forward with the RFPs so they will have enough housing for the next couple of years.

She added that students prefer to live in studios or one-bedroom units where they can live by themselves. Cost, location, and WiFi are key elements for students when considering housing.

The Evolving College Campus

Since the 2008 recession, nearly all universities in the U.S. have been forced to evolve their funding sources to be competitive. They have adapted to reduced public funding, maximized other revenue streams or simply created new revenue opportunities. Many schools are cash poor, real estate rich and are looking to monetize their land to help diversify their sources for income. This approach is being used for student housing but not for active multi-family housing projects or retirement villages. Other mixed-use projects can alleviate financial pressures on a campus, while surrounding the campus with productive uses of space.

“Arizona State University Mirabella is moving forward with multiple construction projects around the Tempe area including a research facility, public transportation and a retirement center. The project can generate a lot of revenue to help with other campus projects and priorities. It will diversify the revenue stream that is outside of student housing to support student housing and other campus life aspects,” said Wright.

In summary, there will continue to be a need for student housing. Four-year state institutions and community colleges should continue to build new housing.

The Southern California Development Forum (SCDF), an organization that provides networking opportunities for those in the real estate community, hosted a virtual town hall with Dave Gilmore, President and CEO of DesignIntelligence and Design Futures Council, about the pandemic’s impact on the real estate industry and the economy. Here’s what Gilmore is expecting in 2021:

Consumers Driving Construction

Consumers will drive further declines in the construction of new retail, entertainment, commercial office, aviation and higher education spaces. People are not buying and consuming the way they used to and if the political and social conflicts continue in the United States, economic distress will remain.

“Ultimately, everything comes down to how consumers consume. So, if you and I are feeling good about ourselves, we spend. If we're not feeling good about ourselves, we pull back and the markets falter,” said Dave Gilmore.

Commercial Office May Not Grow   

The commercial office space will continue to see minimal activity for the first half of 2021. A study by Cisco Systems interviewed 1,500 executives across the United States and found that 90 percent of the companies would not bring back their employees into the office. Alternately, they are leaning toward a remote worker infrastructure.

Commercial real estate investor confidence continues to be subdued as well. People aren't paying their loans and the loans are defaulting. Institutional term loan defaults are estimated to exceed $100 billion through 2022. To make matters worse, the total commercial debt combined with multifamily debt has now approached $4 trillion at the end of the second quarter.

Residential Investments at Risk

The CARES Act placed a ban on all of the mortgage holders so that they could not take action on late payments, until August 31. 15 million residential mortgages are now at risk of foreclosure. Gilmore expects these homes to foreclose in the next 12 months.

Schools and University Cling to Safely Standards

K-12 schools and college universities need to standardize policies and processes to ensure the safety of those who are attending in-person classes. Higher education depends on the effectiveness of the vaccine and if people feel comfortable attending in-person classes. But many students are making the switch to online courses.

There will be an increase in K-12 construction with building designs that adapt to a pandemic. More kids will go back to school.

“We think that public bond money is going to be made available because people don't want their kids at home working from a screen, which is different than the higher education context,” said Gilmore.

Hospitality at Risk

Until the vaccine is distributed, the hospitality industry such as hotels and resorts will remain flat. 50 percent of current assets in the hotel market are now moving into default. There might be a series of fire sales of assets in 2021.

Healthcare Will Receive Funding

Hospitals and healthcare facilities will receive adequate financial support from both the state and federal sources to ensure their facilities are best provisioned for ongoing Covid-19 outbreaks. Nevertheless, many of the hospitals are radically under-optimized. There is an opportunity for those asset owners to improve their space.

Sports, Entertainment and Mass Transit in Danger

Even when the vaccine becomes available, will people be willing to sit close to one another? The pandemic has made it difficult for people to gather in large groups. The entertainment and sports industry are predicted to be flat for two years. Also, about 50 percent of the airport projects that were planned or started got postponed or canceled.

Key Takeaways for RE Leaders

Real estate leaders must refresh and transform their brand identity to create new value offerings and to initiate new financing structures. This is a period for redefinition since this is not a normal recession. We have been living through a series of crises and we are still in the middle of them. Healthcare, economic, political and social sectors are hitting us all at once.

Identify and secure the essential people in your organization that you depend on and will generate value for the firm. Invest in an authentic internal relationship. Consider getting creative about new models for recognition, rewards and compensation.

Reduce your physical footprint because you do not need it anymore. Adopt a mantra of less is more. If you're in charge of the money prioritize your top 10 spend and then reduce it to seven. Operate like every dollar counts because it does.

“It's time to reconsider the art and science of business development. If you've been doing business development based on the old paradigms and the world is radically shifted around you, maybe there is a new way to consider business development for the future of your firm,” stated Gilmore. “It is time to get crazy about environmental and social responsibilities. It's time to get crazy about doing the right thing for the good of all.”

Feel free to keep these helpful tips in mind to refresh your real estate firm to support the industry in 2021. 

The Southern California Development Forum (SCDF), an organization that provides networking opportunities for those in the real estate community, hosted a panel discussion in late September about opportunities for social change in our industry.  While the conversation wasn’t real estate related, racial injustice does affect the industry. SCDF invited several members of the Los Angeles business community to share their views on how positive change can be advanced and what some businesses are doing to champion this cause.

Tre Borden, principal of Tre Borden Co., a company focused on building creative communities, served as a moderator for panelists from LA Mas, 2nd Call, Homeboy Industries and ACE Mentor Program LA/OC. Borden began the conversation by asking how panelists have adapted their organizations to support racial justice over the last six months.  

Feeding and Healing So Cal

Homeboy Industries is considered one of the front runners in an organization that is committed to pushing social change. The organization continues to rehabilitate former gang members and felons which has been its mission for the last 30 years. In fact, fifty percent of its staff are former clients, which lends a great deal of credibility to its mission.

“We can't rely on government programs or any of the foundations. The business community needs to take on this responsibility of creating jobs and providing good jobs because that's how we make long term structural change,” said Thomas Vozzo, Homeboy’s CEO.

The organization is also providing food for those struggling during the pandemic. The food program, which has served thousands of seniors, now has a city contract.

“So not only are we keeping people working but we're also feeding people at the same time,” Vozzo said.

In response to the Black Lives Matter movement, LA Mas, an organization that designs initiatives to promote neighborhood resilience, has narrowed its mission to support individuals living in Long Beach, South LA and East LA rather than the entire LA Region. LA Mas has a diverse leadership team and supports working-class communities of color, explained Elizabeth Timme, co-executive director.

“We have started feeding 700 residents of northeast Los Angeles, most explicitly in Elysian Valley,” she said, adding that her staff will complete anti-racist training in the next few weeks.

Skipp Townsend, executive director for 2nd Call, an organization that offers parenting, anger management, domestic violence and re-entry programs, also began food distribution in South Los Angeles. 2nd call hopes the program will began the healing process between Black and Brown residents of the area.

Backing the Next Generation

The ACE Mentor Program LA/OC supports youth with after-school classes and scholarships because it believes that higher education is a strategic way of changing the lives of the next generation. Ricardo Zendejas, mentor and board member for the organization, said they were able to adapt their program into a virtual environment during the pandemic. ACE annually serves about 10,000 students of which about two-thirds are minorities. The program has awarded approximately $20 million in renewable scholarships over the course of 26 years.

“I went through the program back in 2003 as a senior in high school and I've got the program to thank for staying with me throughout college,” Zendejas said. “I got my undergraduate degree at UCLA, my master's at Stanford, and throughout the whole program the sponsor companies provided internships.” 

In summary, you can make Southern California a more prosperous place by supporting scholarship programs, donating food to those in need or creating jobs that will provide long-term structural change.

Like so many other business sectors, higher education has had to make massive adjustments to remain sustainable during the pandemic. For many of us going virtual and working remotely is relatively seamless. In the higher education field, going remote is nothing new. Online education has been offered for at least twenty years. However, it was rarely offered as the sole method of learning. The conundrum for higher education going completely online is that there are so many facets of college life that must take place in the real world, not a virtual one. This is especially true for the many facilities that comprise a university campus in order to create synergy among students, faculty, athletes, alumni and more. For the month of June, we spoke with designers and construction planners from three California universities, as well as a member of the California State University Chancellor’s Office, for some inside information regarding the adjustment of our university system to the new normal.

New Normal, New Budgets

Paul Gannoe, chief of facilities planning and design at the CSU Chancellor’s Office, opened the conversation with a reminder that many of these decisions are often, or perhaps always, a direct result of a budget.

“The CSU was slated to get a little less than what we had asked for, but it was manageable,” he said. “Then when COVID-19 came, we had to make revisions to accommodate for the changes.”

Gannoe also mentioned the difference is that if the CSU takes the budget cuts up front, then the cuts can be restored at a later time when federal funding potentially arrives in October. In regards to budgets and financing, the CSU has also sold about $600 million worth of debt and is working on allocating that funding toward projects already in the pipeline at several universities. The Chancellor’s Office is also working with the Department of Finance on approvals for those projects, while also seeking up to $650 million worth of new construction. From a capital funding standpoint, the CSU is currently in good standing due to favorable interest rates, and a forecasted softening in construction market pricing.

Project Delays

Mark Zakhour, CASp, director of design and construction at Cal State Long Beach, pivoted from the stable funding of projects, to point out that many of these projects will be delayed.

“Fortunately, we were able to keep our active projects moving forward,” he said. “We didn’t have to stop anything due to COVID-19, which was a primary concern.”

While none of the active projects at Cal State Long Beach were delayed, Zakhour did say that many of the projects in a planning or design phase are taking a pause. Among these projects is a new student union, which took a pause in the middle of a fee referendum. The university was looking into ways to navigate additional fees for students, in order to help pay for the project. Then all the students went away. Some of those projects have to take a pause, especially the student housing projects.

“We know that our revenue is tied to enrollment, and I know that's going to be something else that will cause us to expect less revenue,” said Zakhour. “Housing reserves have taken a huge hit because housing and dining plans are basically stopped. Some housing may be assessed for renovations, depending on what next year looks like.”

Most panelists agreed that probably around October, is when their campuses will begin to initiate new developments again.

New Designs for a New Normal

Catherine Kniazewycz, campus architect and director of design and construction at CSU Northridge added that on top of the proposed budget cuts to campus facilities, there may also be new design standards moving forward.

“In addition to the likelihood of new design standards which comply with social distancing, there is also an additional need for cleaning inspections, sanitizing, and other precautionary measures,” she said.

Jill Anthes, executive director of planning and design at San Francisco State University alluded to a different approach to the possibility of new designs. At SFSU, they have an architecture team working in conjunction with their campus, as well as with Cal State East Bay and Cal State Chico. However, she did add that the architecture team informed her not every campus is modifying their design. Some campuses are using a different schedule or longer cost estimates or more insurance to accommodate social distancing. Once there has been more collective experience with distance learning, the CSU will be able to take a more wholistic approach. All panelists agreed that future planning is a bit premature at this stage, as it is really too soon for anyone to make any serious long-term decisions.

The incorporation of density to the suburban-style sprawl that is Southern California’s cityscape is a topic that has been debated on repeatedly in the last year or so. With bills like SB50, SB4, and a push for transit-oriented developments, all of which seek to incentivize pro-density development at the forefront of the housing crisis, it’s hard to imagine how much longer the battle will continue. Nevertheless, opposition by NIMBYism and neighborhood groups, often seems to prevail. Those in favor of density wonder how much longer this can last. The urban landscapes of Southern California have long since run out of room to build out – when will we collectively decide to build up? 

Real Estate as an Economic Driver

Moderator Edgar Khalatian, of Mayer Brown, LLP introduced the panel and opened the discussion, which kicked off by John Keisler, economic development director at the city of Long Beach pointing out that real estate development is often an economic driving force, not only for private businesses, but also for the state and local governments. John pointed out that real estate development, business development, and workforce development all work in tandem to push the economy forward. Of course, without a surplus of raw land, the development has nowhere to go but up. Keisler noted how the city of Long Beach has extensively reviewed various ways to grow GDP overall, which consists of ways to maximize every space, person and asset. This has a ripple effect of creating opportunities for workers, investors, and entrepreneurs. 

Wells Lawson, senior director at Los Angeles County Metropolitan Transportation Authority (Metro), noted that Metro is also taking more of a community-based approach in maximizing space, but to the liking of area residents. In contrast to previous years, Metro has examined the concept of “transit-oriented communities” as a way to mitigate pressures of gentrification and evaluate what kinds of economic opportunities transit brings to a neighborhood in the context of the local workforce. Metro involves the community in new projects, by taking into account any feedback from residents that is gathered during community outreach. This feedback is incorporated into proposals and development guidelines to ensure the project facilitates economic development and stability within the community, rather than becoming detrimental, such as in the case of gentrification. What this boils down to is that communities often are in need of more affordable housing. Khalatian posed the question whether or not involving the community has resulted in less housing, or less affordable housing. Lawson informed that as a result of increased community involvement, Metro has revised it’s housing policy to ensure transit agencies are held to a level of accountability in providing affordable housing.

Preservation in the Face of Progress

In the effort to densify what was once a sea of single-family homes, opposition parties often note the preservation of the “classic California” look as a concern. Ken Bernstein, principal city planner at city of Los Angeles noted that creating places that contribute to density and economic development, while retaining the classic design, is a key factor in the effort to cohesively densify our city in a way that works for everyone. As we shift to higher transit usage, pedestrian-friendly design with active street frontage and 360-degree design takes priority, but not at the expense of how the project relates to longtime neighbors. Another concern of any new development in Southern California, whether it is pro-density or not, is the climate impact and the projected response to the unique climate of Southern California. Bernstein noted that if all of these design and sustainability guidelines can be met, the chances of a pro-density, transit-oriented development receiving community approval are much greater.  

As of now, the city is operating on an outdated 1946 zoning code. Most of these updates are being rolled out through the city, while simultaneously reshaping the quality of the new design. In addition to updating the zoning code, many of the new projects in development, are able to pass through the transit-oriented community design guidelines. Bernstein also added that most new developments are using TOC housing incentives and 42% of new housing is going along new transit routes – which is exactly where the city wants to see new housing built. 

Density Where it Belongs

As the sole developer on the panel, Greg Ames, managing director of Trammell Crow Company Los Angeles brought a “purist” view of development in the context of transit and density. Because Trammell Crow Company does not carry its own portfolios, but rather develops into the portfolios of its investors. Developers like Trammell Crow Company are largely concerned with the long-term feasibility of projects, and how they might stand up to the many “what-if” scenarios that loom over construction. Ames noted that transit-oriented development is especially interesting to Trammell Crow because of the versatility of these projects, but also because of the opportunity to truly shape a district in a way that is beneficial to the community. Ames cited the developments taking place in North Hollywood, in partnership with Metro, as exactly the type of neighborhood where density belongs. 

Ames also mentioned the fact that adding density to a neighborhood also makes the area more of a destination – further cementing the concept of real estate development as an economic driver. Adding density brings homes and jobs, but entertainment uses are also relevant. Shopping, dining and other entertainment can create a destination for residents living in a more traditionally zoned area of single-family homes. In any case, development is necessary to further propel the economic engines of Southern California in this time when the only way we have to go, is up. 

For residents of the Los Angeles Metro Area, the recent developments at Los Angeles International Airport (LAX) have been notable.  The increase in construction corresponds to a surge in growth in the aviation industry. The International Air Transport Association (IATA) forecasts that the number of passengers transported by airlines will reach 8.2 billion in 2037, up from a projected 7.8 billion in 2036. The updated forecast is based on a 3.5% compound annual growth rate for the industry. When looking at the hard numbers, the actual annual growth in air travel has grown considerably more than 3.5% annually. According to Statista.com, the year 2017 saw a whopping 8.1% increase in passenger demand. As consumer demands rise for air travel, so do their standards as well as the need for speed and efficiency. Moderated by Matt Ross, senior vice president of AvAirPros, our February aviation panel explored ways in which designers and developers are harnessing technology and modernizing infrastructure in order to accommodate growing numbers.

One challenge, from a design perspective, is very similar to the challenges met on other project sites. Robert Schultz, P.E., A.A.E., and chief airport planner for Los Angeles World Airports highlight the need to design spaces for flexibility. This was noted by multiple panelists as an obstacle in aviation facilities across the spectrum. He added that in general, the focus moving forward is to add flexibility, but to also create more positive travel experience while enhancing how the airport staff interacts with customers. Designers are leveraging technology, as well as the data acquired from technology in order to curate these experiences and spaces. Patrick Lammerding, deputy executive director of Hollywood Burbank Airport added that the observation of airport visitors has been paramount the evolution of airport design. This is done by accounting for the entire experience from entering the terminal to boarding the plane. Designers use data points such as what concessions are frequently visited, how long the customer spends at a concession or dining location, what additional amenities are used and more. All of these factors shape how airports are designed.

The use of space and the efficiency of a facility is also crucial to passenger flow – important for both safety and a positive customer experience. All panelists noted that each Southern California airport has its own unique limitations, many of them involving space, or a lack thereof, for our region’s many travelers. Stephanine Gunawan-Piraner, senior civil engineer at Long Beach Airport, pointed to new ticketing lobbies, which include self-service kiosks and common-use ticketing space. These allows airlines to expand and contract service as needed and allows airports to use space more efficiently. An airline that has a large number of passengers will need more of these kiosks and can use them in order to move through the airport more quickly. For off-peak traffic times, these systems are not so urgently required, and the space can be utilized for other airlines as needed. Another development is the evolution from multiple, individual terminals serving one concourse. The direction is shifting to terminal processors serving multiple concourses. This can be done through real-time traffic monitoring by consolidating and connecting terminals to provide more operational flexibility.

Other innovations include investment into biometric identification systems, automated bag drop systems and overall improvements to security screenings and digital passenger services. A common theme across all panelists was the need to save time. Don Ostler, program manager for Southwest Airlines at LAX gave a startling statistic regarding time. He shared with the audience that major airlines such as Southwest, can save over 70 operating hours per day across their fleet by simply shaving one second off of each flight turnaround. Kaveh Dabiran, west region director for United Airlines also noted the extreme priority placed on time by larger airlines – every second counts in this industry. As demand continues to rise, the innovations in technology will no doubt continually see integration into the aviation world.

Kicking off the new year, SCDF hosted a panel focused on a widely-discussed topic – the state of the local economy. More specifically, members of our community have been concerned with how the factors at play internationally, will affect our local industry. Architects, general contractors, engineers and more, all joined us last week for a full house of development community professionals eager for a variety of opinions regarding the 2020 economic outlook. This particular panel differed from others in that it was smaller, and did not have any members of our community speaking. Instead, we opted for a localized view from expert sources. Joining our panel discussion was Dr. Monica Morlacco, assistant professor of economics at University of Southern California, as well as Eric Hayes, associate economist at Los Angeles Economic Development Corporation’s Institute for Applied Economics. Both panelists presented the audience with different ways global impacts translate into local effects.   

Global Forces at Work in the United States

Among the key points made by Dr. Morlacco was that big, multinational business is only getting bigger, and this has many different side effects. Unfortunately, the majority of these effects are not so great for the average consumer or worker. Morlacco pointed out that since 1980, there has been a steady increase in the average markup – which is the amount companies typically charge over and above their costs, to sell their goods at retail. This is largely the case for U.S.-based corporations, where the average markup now hovers around 61 percent, compared to 21 percent in 1980. Since 1980, much of the increase in markups has come from large firms. Their growing influence and increase in size is concurrent with the diminishing power of antitrust laws in the United States, as well as the increased costs of simply doing business. Logistics, litigation, and administrative costs have seen substantial cost increases which may not be as easily absorbed by smaller firms. However, it is important to note the other cultural and geographic factors which play a role.

Technology, which has disrupted almost everything to some degree, has skewed consumer preferences toward big business as well. The effects of e-commerce and online networks tend to keep customers locked in to a specific platform or brand. A tendency for consumers to remain brand-loyal and static in their choices can translate into difficulties entering the business marketplace. This metric is referred to as turnover, or the rate at which new businesses establish entry, and conversely, old businesses exit the marketplace. Dr. Morlacco also highlighted the fact that there has been a broad decrease in turnover and a broad increase in concentration across most industries in the United States.

In addition to technology, the largest corporations are also able to establish global value chains in order to optimize business functions, and these large conglomerates quite simply have the resources to do so. These global value chains are best defined as a network of production, trade, and investments where different stages the product cycle span multiple countries. A great example of this would be shoes and apparel. The product may be designed in the United States, materials sourced in South America, manufactured in Asia, and then distributed worldwide. Many everyday consumer goods are likely the product of a global value chain.

Effects on Our Local Economy

In light of the recent trade wars, residents of Southern California are forecasted to see an increase in consumer prices across most product types – this includes housing. However, the most pertinent information to our region has to do with shifting demographics and unemployment rate. Currently, our state, and the nation, have unemployment rate of 3.7 and 3.9 percent, respectively. The national unemployment rate is the lowest it has been in over 50 years. However, all economic cycles are subject to disruption, and for California, our population may be a deciding factor. What may surprise many of us in Southern California, is the fact that our population has actually been decreasing this past year. For a continually robust economy, a steady population growth is required as it is an essential component of a strong labor force. Not only has Southern California, particularly Los Angeles, been losing residents to outward migration, but the birth rate has also dropped. Birth rate is an important metric to economists as it is an indicator of the future working population who will not only spur additional economic growth, but pay into social service programs.

A more peripheral effect of the birth rate might be the tendency for parents to become homeowners, an increasingly inaccessible milestone for Southern California families. To put this into perspective, the minimum qualifying income for a home in Los Angeles County is $127,200. The median household income in Los Angeles County is $68,093 – which is vastly less than what is required to own a home. This leaves the average renter spending approximately $31,000 in rent annually. Still, low rates of homeownership in Los Angeles are also attributed to other outside factors, such as a scarcity of housing permits issued by local governments.

Despite all of this, California is likely to continue on a path of moderate, but sustained growth throughout the year. Venture capital investments to large tech and media companies that call our state home will prevail. Lastly, the tendency for our state to be an incubator for innovative ideas and a pool for great talent will likely keep the California afloat throughout the year and many more to come.

Southern California Development Forum capped off 2019 with an exceptional awards luncheon where we recognized some of the greatest local achievements in the areas of design and philanthropy. This was truly the icing on the cake for a wonderful 2019, and leaves us excited for what’s to come in 2020. SCDF prides itself in bringing members of the development community together, while also honoring local charities who do their best to make Southern California an even better place to live. From architects to developers to business executives, and more, our events serve as a way to connect passionate and visionary individuals to one another.

This year’s 2019 Design & Philanthropy Awards were held at a local landmark, the beautiful and historic California Club in downtown Los Angeles. While many development projects took home awards, we also recognized two philanthropies, School on Wheels, and Students4Students. Both philanthropic organizations are dedicated to fighting homelessness across Southern California. SCDF awarded each organization with a $22,500 check to aid in the furthering of their charitable missions. We also recognized Father Greg Boyle, founder of Homeboy Industries, as this year’s winner of the William Feathers Award of Distinction.

School on Wheels

Schools on Wheels is a nonprofit, 501(c)(3) organization founded by a retired schoolteacher who witnessed firsthand the unique challenges faced by homeless students. At the time of it’s founding, up until current day, Schools on Wheels is the only organization in Southern California dedicated exclusively to the educational needs of this marginalized population. The driving force behind Schools on Wheels’ are the volunteer tutors who come from all backgrounds and professions. The common goal of all tutors is to reach out to a child, to teach, mentor, or otherwise assist in their educational life. The services provided by volunteers is intended to enhance educational opportunities for children from kindergarten through twelfth grade.

Students4Students

Students 4 Students, also a nonprofit, 501(c)(3) serves a similar cause, but for college students. This organization is devoted to the establishment and promotion of collaborative shelters for college students. Each shelter is also run by college students who wish to support their peers that might be experiencing homelessness. The model is also shared with institutions of higher learning, student groups, and faith-based organizations who want to participate in the cause. The program aims to empower student volunteers to become the next generation of philanthropists and community service leaders. For those receiving services, the goal of the program is to assist homeless students in determining their own path by way of their ambition and education, rather than their unfortunate circumstances.

Homeboy Industries – William Feathers Award of Distinction

Homeboy Industries is the largest gang intervention, rehabilitation, and re-entry program in the world. Father Boyle formed Homeboy after witnessing the ravaging effects of gang violence and mass incarceration while serving at Dolores Mission Church in Boyle Heights during the late 1980’s and early 1990’s, the peak of Los Angeles gang activity. Father Boyle began implementing what would later come to be known as Homeboy Industries in 1988. Through this organization, he oversees the employment, training and social services for former gang members as they reintegrate into society. Father Boyle has authored a 2010 New York Times bestseller, “Tattoos on the Heart: The Power of Boundless Compassion. He also published a second book in 2017, “Barking to the Choir: The Power of Radical Kinship.” In addition, Boyle has received the California Peace Prize and has been inducted into the California Hall of Fame.

And last but not least, we also recognized a number of stunning projects which serve as exemplary models of design across Southern California. See the full list of winning projects and their categories below.

2019 Project Winners

Adaptive Reuse / Renovation / Preservation

1.    RCH Studios for The Music Center Plaza Renovation (Merit)
2.    Lehrer Architects LA for the Studio-MLA Office and Plaza (Merit)
3.   KFA Architecture for NoMad Hotel Los Angeles (Honor)

Civic

1.    RADAR, Inc. for Libros Schmibros Lending Library (Honor)

2.    KFA Architecture for Los Angeles LGBT Center, Anita May Rosenstein Campus (Merit)

Commercial Mixed Use

1.    RCH Studios for FLIGHT at Tustin (Honor)

2.    Gensler/AECOM Hunt for LAFC Performance Center (Merit)

Education

1.    CO Architects for Cal Poly Pomona Student Services Building (Honor)

Interior Architecture

1.    Belzberg Architects for USC Shoah Foundation, The Institute for Visual History and Education Global Headquarters (Merit) 

2.    Rottet Studio, LLC for Paradigm Talent Agency (Honor)

Multifamily Residence

1.    KFA Architecture for Blue Hibiscus (Merit)

2.    KFA Architecture for Pico Eleven (Honor)

Single Family Residence

1.    Clive Wilkinson Architects for West Los Angeles Residence (Honor)

2.    Assembledge+ for Laurel Hills House (Merit)

Technological Innovation

1.    Structural Focus for May Company Façade Rehabilitation, Academy of Motion Pictures (Merit)

2.    C.W. Driver and Integral Group for Cal Poly Pomona Student Services Building (Merit)

Unbuilt/Concept

1.    Lehrer Architects LA for Los Angeles – Glendale Water Reclamation Facility (Merit)

2.    HDR, Inc. for West Los Angeles District Power Year (Merit)

3.    Moore Rubell Yudell and HED for Santa Monica High School Discovery Building (Merit)

4.    HDR, Inc. for Orange County Sanitation District Headquarters Complex (Honor)

Urban Design/Planning

1.    Wolcott Architecture for Von Karman Creative Campus (Merit)

It is no secret that the retail sector has undergone significant changes in the last decade, with no end in sight. As e-commerce becomes increasingly sophisticated, more consumers opt for shopping online and having the goods delivered to their home. As a result, restaurants will continue to move toward out-of-the-box experiences becoming part of people’s lifestyles. Our November panel discussed how this new focus on food and dining experiences is changing the face of retail across Southern California.

Our panel was moderated by Rachael Zanetos, Leasing Director of Mixed-Use Retail at Brookfield Properties retail group. Rachael’s 15 years of commercial real estate experience give her a comprehensive understanding of the Los Angeles market. Currently, she is responsible for overseeing notable downtown projects such as FIGat7th, Halo at Wells Fargo Center, and California Market Center. Rachael led a panel of three additional speakers, all in various roles within the restaurant and design industries. Panelists included: Mike Simms, founder of Simmzy’s and Tin Roof Bistro; Ziba Ghassemi, Vice President of Design - Airports at Unibail-Rodamco-Westfield, a global developer focused on making positive contributions to users and communities; and Sam Polk, co-founder and CEO of Everytable, a fresh-prepared food concept aimed at making healthy food affordable for everyone. All panelists came from different arenas of the restaurant and retail sectors, but many overlapping similarities were found in a topic that seems to unite everyone – food and dining.

What is Your Most Impactful Meal?

As each panelist introduced themselves, moderator Rachael Zanetos asked the icebreaker question “what was your most impactful meal?” Each panelist had completely different responses, but they all shared a common thread. The most impactful meal for each panelist had not only to do with an exceptional food choice, but also with the location. Panelists noted the city, restaurant space, setting and even ritual as characteristics that made their choice stand out as their most recent impactful meal. This common denominator of what makes a meal impactful was the core of the panel discussion. As retailers are turning to food to fill spaces, there is more competition than ever. Each restaurant must have a unique concept and sense of place in order to deliver a multisensory experience to remain competitive and keep customers coming back. Now more than ever, food is just a starting point. Making a meal or a dining experience truly impactful requires exceptional design, a welcoming location, and for multi-venue concepts, a robust supply chain that can replicate dishes consistently.

What Drives Consumer Demand?

Panelists noted that food culture has become more relevant than ever. The advent of social media with consumers photographing and sharing their food and restaurant experiences has not only created traffic and demand, but also shifted trends. Simms noted that his team now considers social media when making decisions about lighting design and table settings.  Design is noted as a key factor in what will drive a consumer to go from a first-time visitor to a repeat customer. Beyond design or marketing strategies, panelists all seemed to share the sentiment that the most important factor in determining long-term success is to know your customer. This will take some research to not only identify who your customer is, but also their preferences and how to target them. Understanding demographics to this degree is important not only for restaurants in the mixed-use retail environment of today’s economy, but in any business across all industries. Certain “homegrown” restaurant concepts may be established with the local preferences in mind and have a keener sense of who their customer is. Once the correct customer profile has been identified, creating a sense of place is the next most important strategy in a successful restaurant concept within a mixed-use setting. 

Strategizing design and curation of a restaurant concept must take into consideration the location and what the customer will be doing there. For example, in an airport, where food offerings are becoming more sophisticated, customers still want to be able to maintain contact with their gate. This requires open spaces, clear lines of sight, and the infrastructure to produce fresh, high quality meals that can be eaten on location or on the go. Other restaurant concepts might be more dependent on the leisure aspect of dining or an adjacency to a destination like the beach. The customer’s route should be taken into consideration when choosing a site, for example a location on a street that runs from parking areas to the beach ensures higher visibility via foot traffic. Despite the tendency for today’s consumers to be digitally connected, prime real estate is still heavily influenced by pedestrian foot traffic.

With new restaurant concepts becoming an ever more important part of our culture, there is a push on owners to be authentic and experiential. The potential of a restaurant lies largely in the ability to get customers to come in and to come back – that characteristic has not changed. What has changed is that great food and exceptional customer service are really just the first step into having a successful restaurant in today’s market of imaginative concepts.