Dunleer Benefits from Big Tech’s Appetite for LA Commercial Space

BJ Turner is the founder of Dunleer, a private real estate investment company that owns and operates properties in Southern California. As CEO, BJ Turner is responsible for steering the company’s vision and property investment operations. Since 2016, he has grown its portfolio by over 250 percent.

Dunleer's apartment portfolio has experienced rent growth in submarkets where technology firms are crossing over with major entertainment studios and content providers. For a number of technology firms, content creation is top priority and there is no place in the world with more talent and content infrastructure than Los Angeles. Particular submarkets such as Culver City, Playa Vista, and Hollywood have been net beneficiaries of the technology and entertainment cross polination. In recognizing this trend, Dunleer designed apartment communities to meet the growing demand spurred on by technology firm growth in LA. Dunleer has started to offer shorter-term leasing options and fully furnished rentals for writers, actors, actresses, directors and producers who come to Los Angeles on assignment for specific film shoots.

The areas that Dunleer has chosen to invest in have benefited greatly from a boom in commercial space acquisitions by Big Tech. This includes companies like Facebook, Apple, Amazon, Netflix, and Google. In January 2019, for example, Facebook announced it was acquiring 260,000 square feet of new space in Culver City, and then Google acquired an additional 584,000 square feet in West Los Angeles, completing a seven-fold increase of its total Los Angeles commercial space in just four months.

 

Apartment Investors Increasingly Return to Core Markets

BJ Turner serves as founding principal of Dunleer. BJ Turner founded the investment and advisory firm in 2014, and has since acquired more than 30 multi-tenant properties in Southern California.

In recent months, a key trend among apartment investors has been a return to core markets. The value-added yield in both secondary and tertiary markets has dwindled, and the capitalization rates in non-core markets have approached those of core markets. In many cases, core markets now offer rather compelling risk-adjusted returns when compared to non-core investments.

Many core markets will likely continue to see low supply and growing demand as highly skilled employees are attracted to these geographic locations. New developments will become increasingly difficult to execute due to high land prices, rising costs of construction, and delays due to the coronavirus pandemic.

COVID-19 has brought the threat of a recession and triggered historically low interest rates. Both of these factors serve to attract investors back to core markets as a hedge against an uncertain future.