Emmet Pierce
To succeed in real estate in 2005 and beyond, investors and developers must be prepared to take risks and think about the housing market in new ways, according to the USC Lusk Center for Real Estatecolor>.
Those who anticipate the public's changing needs will have the best chance of doing well, said Stan Ross, chairman of the board at the nonprofit center. As an example, he cited the recent redevelopment of downtown centers for residential use in San Diego and other large American cities.
According to Ross, those who first noticed an interest in downtown housing in San Diego, Los Angeles and Chicago were able to buy obsolete buildings at affordable prices and convert them to condominiums.
"Stealth" developers completed their renovations and cashed out before their competitors awakened to the opportunity, he said. "Their timing was just right."
If you wait until a trend becomes apparent to others, you're probably too late to take advantage of it, he added. "What you want to do is find the opportunity early and also exit."
When looking for new ways to do business, think of methods of turning retail and commercial space into housing, he advised.
The goal is to "think out of the box," he said. "If I see an office building, do I see a conversion" to residential use?
If you are in a community like San Diego where affordability is a problem, think about increasing density, he suggested.
The Lusk Center convenes real estate industry leaders, students and academics in seminars, workshops and forums to examine the state of the industry.