Latest / Own More Doors / #44 San Pedro Real Estate Is Booming: Should You Buy, Sell, or Wait? (Jack Patel)

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#44 San Pedro Real Estate Is Booming: Should You Buy, Sell, or Wait? (Jack Patel) · Own More Doors

• 0:00
  SPEAKER_00: What's up, everyone?
• 0:01
  SPEAKER_00: Juan Weizar here with the Own More Doors podcast.
• 0:04
  SPEAKER_00: This specific episode was first shared on our YouTube channel, Sage Real Estate.
• 0:08
  SPEAKER_00: Check it out.
• 0:09
  SPEAKER_00: And we're excited to bring it to you here.
• 0:12
  SPEAKER_00: Hey everyone, I'm Juan Weezar.
• 0:13
  SPEAKER_00: This is Jack Patel.
• 0:14
  SPEAKER_00: Today we're gonna be doing a deep dive in the San Pedro market.
• 0:17
  SPEAKER_00: What is going on in San Pedro?
• 0:19
  SPEAKER_00: There's a lot of construction.
• 0:20
  SPEAKER_00: In fact, you can hear it right behind us.
• 0:22
  SPEAKER_00: We're gonna get into it.
• 0:23
  SPEAKER_00: Is this a good time to buy?
• 0:24
  SPEAKER_00: Is it a good time to sell?
• 0:25
  SPEAKER_00: San Pedro is going through a complete transformation and it's happening today.
• 0:30
  SPEAKER_00: It's happening as we speak.
• 0:31
  SPEAKER_00: And so do we get in early?
• 0:33
  SPEAKER_00: Do we wait?
• 0:33
  SPEAKER_00: If you own, do you continue owning and kind of ride this out?
• 0:37
  SPEAKER_00: Uh or do you sell now?
• 0:39
  SPEAKER_00: Tune in while we do this deep dive.
• 0:41
  SPEAKER_00: Hi, I'm Juan Weezar.
• 0:43
  SPEAKER_00: It's Jack Patel.
• 0:44
  SPEAKER_00: We're with Sage Real Estate, and today we're gonna dive right into this.
• 0:48
  SPEAKER_00: Jack, I'm super excited.
• 0:49
  SPEAKER_00: You know, um, a lot of my videos are very Long Beach heavy.
• 0:52
  SPEAKER_00: We cover the Long Beach market, we do a lot of market updates, and today I'm just excited that you know you have investments here.
• 0:58
  SPEAKER_00: You recently joined Sage Real Estate.
• 1:00
  SPEAKER_00: We're excited to have you with your experience, your knowledge.
• 1:02
  SPEAKER_00: You're gonna be a tremendous asset to Sage Real Estate, and you know the San Pedro market.
• 1:07
  SPEAKER_00: I do.
• 1:07
  SPEAKER_00: And so let's let's get right into it.
• 1:10
  SPEAKER_00: Um, Jack, people want to know how's the market, how's the multi-family market in San Pedro?
• 1:15
  SPEAKER_01: Tell us for me.
• 1:16
  SPEAKER_01: I personally think it's a great market.
• 1:18
  SPEAKER_01: Um, everyone always says that you know Long Beach is the most affordable beachfront city when it comes to investing.
• 1:25
  SPEAKER_01: You know what?
• 1:25
  SPEAKER_01: Personally, I think it's San Pedro.
• 1:27
  SPEAKER_01: What you have in San Pedro is you have Long Beach to behind us, you have Ranchos Palos Verdes, and then you have the city of LA.
• 1:34
  SPEAKER_01: San Pedro doesn't get that much of attention so uh for a long time.
• 1:37
  SPEAKER_01: Recently, we they've been getting a lot of attention now, and that's why there's been a lot of buyers and investors have put in uh focus their eyes and their investments and their money here in San Pedro.
• 1:47
  SPEAKER_00: Jack, so let me ask you like from an affordability standpoint, can I is there more bang for the buck in San Pedro versus Long Beach or say Los Angeles, uh west side of Los Angeles?
• 1:59
  SPEAKER_01: So, Juan, let me tell you.
• 2:00
  SPEAKER_01: So if you go back 10 years, we're talking about 2014, San Pedro's average cap rates have been around 5.5 to 6%, which is pretty good compared to you know, if you go to West LA, which is around you know, low threes, you know, maybe even low two, mid-2s.
• 2:16
  SPEAKER_01: Long Beach, you know, we're we're you can get something around four and a half, five, it depends on the location.
• 2:22
  SPEAKER_01: Sure.
• 2:22
  SPEAKER_01: So, you know, that for that I think this is a great area for investment.
• 2:26
  SPEAKER_01: Right now, in the mid-2019 to 2021, everyone knows what happened.
• 2:30
  SPEAKER_01: COVID interest rates were low.
• 2:32
  SPEAKER_01: Um, cap rates compressed a little bit, but and then after 22, the cap rates have kind of expanded, which means they gone up, prices went down.
• 2:41
  SPEAKER_01: Uh, for sellers, you know, it was kind of a point where hey, do I do I sell, do I hold?
• 2:46
  SPEAKER_01: A lot of buyers were looking at, you know, it was a great time to buy at that time.
• 2:49
  SPEAKER_01: Why is it good still now?
• 2:51
  SPEAKER_01: Well, San Pedro, the cap rates have actually leveled out to what they were 10 years ago, they're around 5.5 and 6 percent.
• 2:58
  SPEAKER_01: So if you were a seller and you missed out on 2020 to 2021, you know, that big compression, you're still at an average from the last 10 years.
• 3:08
  SPEAKER_01: If you're a buyer, this is a great opportunity.
• 3:10
  SPEAKER_01: Not only are the cap rates what they were 10 years ago, if you look around and you'll see we're having the waterfront development just right, you know, right on the left of us over here.
• 3:19
  SPEAKER_01: We have new development coming in over here in San Pedro.
• 3:22
  SPEAKER_01: So um that's one of the reasons why I think a lot of people and a lot of investors have to turn their eyes to San Pedro, it's not a hidden gem anymore.
• 3:29
  SPEAKER_01: And I mean right now it's still considered the least uh well, the affordable beachfront city, but it won't be that for too long.
• 3:36
  SPEAKER_00: So, so a couple things that you said.
• 3:38
  SPEAKER_00: You said, hey, the cap rates were traditionally higher when we go back.
• 3:41
  SPEAKER_00: So so higher cap rates means lower values.
• 3:43
  SPEAKER_00: So if someone was looking for, hey, well, where can I buy a more affordable apartment building?
• 3:48
  SPEAKER_00: San Pedro would probably be the place.
• 3:49
  SPEAKER_00: It's probably still the case now.
• 3:51
  SPEAKER_00: It is the case now, yeah.
• 3:52
  SPEAKER_00: Whether we're comparing uh four units or if we're looking at the five plus market, an eight-unit building in San Pedro will probably be less than an eight-unit building in Long Beach.
• 4:00
  SPEAKER_00: So it means that that that the cap rate will probably be better in San Pedro.
• 4:04
  SPEAKER_00: Um, talk to us about, you know, a lot of investors are like, well, what's the price per door?
• 4:08
  SPEAKER_00: So, like on average, what's the price per door in San Pedro, like in the five plus market?
• 4:13
  SPEAKER_01: The price per door right now in the San Pedro market plus uh five plus is around 222 to 255 uh price per door.
• 4:21
  SPEAKER_00: So and so like tell us like so from an investment standpoint, is that a good thing?
• 4:26
  SPEAKER_01: Is it down from where it used to be a year ago or well between uh 2020 and 2022 the price per door uh gone up to almost 289 a square foot uh per door?
• 4:37
  SPEAKER_01: Yeah, uh it has came down.
• 4:39
  SPEAKER_01: Uh historically, San Pedro has been around 250 to 300 per square door uh per unit.
• 4:45
  SPEAKER_01: It just depends on obviously location within San Pedro.
• 4:48
  SPEAKER_01: If you're more towards the beach, you know, have better views, you're you're gonna have a higher price point for that unit.
• 4:54
  SPEAKER_00: So right now you would say from from an overall price point that there's been a decrease in uh in sales price, which which is a good for an investor.
• 5:02
  SPEAKER_01: Correct.
• 5:02
  SPEAKER_01: It's a decrease in sales price, the uh decrease in the price per doors from our 2019 to 2023, uh, and well 2022, I'm sorry.
• 5:12
  SPEAKER_00: But it's historically caught up to its average.
• 5:16
  SPEAKER_00: If someone wants to know, you know, inventory is everything.
• 5:19
  SPEAKER_00: Like when there's not enough inventory, it's a problem.
• 5:22
  SPEAKER_00: When there's too much inventory, depending on what side you're on, you know, it's it's everything supply and demand.
• 5:27
  SPEAKER_00: Talk to us about inventory.
• 5:28
  SPEAKER_00: Is there more apartments on the uh on the market right now that we could consider buying, or is there less from what you've seen?
• 5:34
  SPEAKER_01: From what I have seen, is going on.
• 5:36
  SPEAKER_01: Sellers are wondering if they want to sell a lot of them, have low interest, uh low loans uh with low interest.
• 5:43
  SPEAKER_01: Inventory is tight.
• 5:44
  SPEAKER_01: Everything that has come up in San Pedro that's relatively uh priced correctly has sold and sold within 40 days, which is quicker than if you look around uh the city of Los Angeles or LA County, even parts of Long Beach.
• 5:58
  SPEAKER_01: Uh so inventory is tight, but if you're a seller, this is a time because there is still demand.
• 6:04
  SPEAKER_01: If you're we're selling properties in 40 days on average here, so if you're thinking about selling and you maybe missed out on the 2021 uh compressant, at least right now you're back to where it was, you know, traditionally the average for San Pedro.
• 6:18
  SPEAKER_00: People in Long Beach, some people will stay away from San Pedro, not not because they don't like it, but they'll stay away because they say, hey, San Pedro has to go by LA City, LA County rent control laws, which is really restrictive, like more restrictive than say Long Beach or Anaheim or Huntington Beach, and so they stay away from it.
• 6:37
  SPEAKER_00: What are your thoughts about that, or how would you address that?
• 6:40
  SPEAKER_01: So that's correct, Juan.
• 6:42
  SPEAKER_01: San Pedro is governed by City of LA uh rent control laws.
• 6:45
  SPEAKER_01: So basically, if your property was built 1978 and older, you have RSO, which uh the housing authority tells you tells the owners what they can raise their rents per year.
• 6:57
  SPEAKER_01: This year it's been 4%.
• 6:59
  SPEAKER_01: Um couple years ago we had a rent freeze and we were not allowed to uh increase rent.
• 7:03
  SPEAKER_01: Um anything built after that, it falls in the same thing as um Long Beach where or state of state rent control AB 1482.
• 7:12
  SPEAKER_01: So that is 5% plus CPI goes by the fall previous year's April CPI.
• 7:18
  SPEAKER_01: So this year, or currently last year's April CPI was 3.89% plus the 5%, which is 8.9%, which you can raise your rents.
• 7:27
  SPEAKER_01: Uh, we'll have our new CPI for this year come out next month, and we'll we'll see what that one is from there.
• 7:32
  SPEAKER_00: Yeah, so what Jack's trying to say is that not so quick, not all parts of San Pedro are are so restrictive, it depends on when it was built.
• 7:41
  SPEAKER_00: Right.
• 7:41
  SPEAKER_00: So in a 1978 or newer, um you're gonna be it's consider it like Long Beach type property, anyways, because it's really governed by the statewide rent control, which is a good thing.
• 7:53
  SPEAKER_00: And so for if you're an investor, don't be so quick to say, hey, I don't want to look in San Pedro.
• 7:57
  SPEAKER_00: What we're saying is there's not a lot of inventory, but there's a lot of opportunity.
• 8:02
  SPEAKER_00: The cap rates are still strong, and we're you know around six percent cap rate in some instances.
• 8:07
  SPEAKER_00: And here's what I would say about San Pedro there's a lot of activity going on.
• 8:13
  SPEAKER_00: There's a lot of activity going on, and and I would say, like a lot of times when we're investing, a lot of us for the most part, we're investing or we should be investing with long-term goals, okay?
• 8:23
  SPEAKER_00: Meaning we're in this for the long term.
• 8:25
  SPEAKER_00: This is not a quick flip, get in, get out, and that is too subjective, it's too volatile, and a lot of things could go wrong.
• 8:32
  SPEAKER_00: But if you're if you're gonna come and commit, whether whether it's Long Beach or San Pedro, and you're gonna own for the next 10-15 years, this is probably a really safe place because it's only gonna get better.
• 8:42
  SPEAKER_00: Would you I would agree?
• 8:44
  SPEAKER_01: I mean, and if you look around, there's all these new developments here.
• 8:46
  SPEAKER_01: If you see over there, one on our right-hand side.
• 8:48
  SPEAKER_01: They're from 2020 to 2025, right now.
• 8:52
  SPEAKER_01: Uh San Pedro or City of LA has um proposed 5,000 units to be built here.
• 8:57
  SPEAKER_01: So far, there's have almost been 35 units been built here, and you can see all of downtown is completely reshaped.
• 9:04
  SPEAKER_01: So, what is what is the old saying?
• 9:06
  SPEAKER_01: You follow the money, yeah.
• 9:07
  SPEAKER_01: So, if all these big developers are developing here, there is a reason why they're developing all these new units here.
• 9:12
  SPEAKER_01: There's gonna be a driving demand once this waterfront is done, once there's a the waterfront, so it's 500 million dollar waterfront.
• 9:20
  SPEAKER_01: They're going to have shops, restaurants, there's a amphitheater, and there's gonna be a Ferris wheel.
• 9:26
  SPEAKER_01: So, let me picture it to you Santa Monica Pier vibe over here in San Pedro.
• 9:32
  SPEAKER_01: And what if you look behind us, you see the St.
• 9:34
  SPEAKER_01: Vince's Bridge that goes straight to Long Beach, so you're basically a stone throwaway to Long Beach.
• 9:38
  SPEAKER_01: So, San Pedro, you know, a lot of people it has gotten a lot of negativity over the years.
• 9:44
  SPEAKER_01: But come down, take a look.
• 9:45
  SPEAKER_01: I think this is a great opportunity.
• 9:47
  SPEAKER_01: If you haven't, think about it.
• 9:49
  SPEAKER_00: Jack, all that sounds great, but yeah, I think our viewers are gonna say, but when's it gonna come?
• 9:53
  SPEAKER_00: I mean it's being built, but when can we expect it to be more walkable?
• 9:57
  SPEAKER_00: More when's it gonna be here?
• 9:59
  SPEAKER_01: So that's a great question, Juan.
• 10:01
  SPEAKER_01: Um, I've I I've known uh since I've invested started investing in San Pedro that this waterfront has been proposed for many times and has never kind of got here, and the money's been here, but it's never there.
• 10:13
  SPEAKER_01: Well, I've never seen it this much developed right now.
• 10:16
  SPEAKER_01: Um, if you guys when we'll see in our video, you'll see what's coming up, where the construction is started.
• 10:25
  SPEAKER_01: We're right here.
• 10:26
  SPEAKER_01: So this is coming.
• 10:27
  SPEAKER_01: There is there's latent for 2026 to be built.
• 10:31
  SPEAKER_01: So hopefully we're here soon and walking and at the fish market.
• 10:36
  SPEAKER_00: So um if you're an owner and you have a property in San Pedro, I would I would recommend you reach out to Jack, just get a uh property valuation.
• 10:45
  SPEAKER_00: Hey, where does my property stand?
• 10:47
  SPEAKER_00: Where was it a couple years ago?
• 10:48
  SPEAKER_00: Where do you think it's at now?
• 10:50
  SPEAKER_00: What kind of demand do you think I'm gonna say?
• 10:52
  SPEAKER_00: I mean, 40 days on the market, that's what it takes to sell a house.
• 10:55
  SPEAKER_00: So the fact that multifamily is moving on average that quickly says a lot about where the market's headed, the demand.
• 11:02
  SPEAKER_00: And listen, we're in April, right now it's April 2025.
• 11:08
  SPEAKER_00: The market has shifted, there's a lot of uncertainty.
• 11:11
  SPEAKER_00: The stock, the stock market talk, the tariff talks.
• 11:13
  SPEAKER_00: A lot of people, some people that I'm dealing with are saying, you know what, let's let's pull our money out and let's put into real estate.
• 11:19
  SPEAKER_00: That's the one thing we trust.
• 11:20
  SPEAKER_00: So whether it's Long Beach, whether it's San Pedro, those are two markets that we definitely cover here at Sage Real Estate.
• 11:25
  SPEAKER_00: And so just want to let you know, if you're a seller, please reach out to us.
• 11:29
  SPEAKER_00: You should know.
• 11:30
  SPEAKER_00: Well, what's my property word?
• 11:31
  SPEAKER_00: That's one part.
• 11:32
  SPEAKER_00: The other part is if you're a buyer, buyers call us all the time and they say, you know, I'm kind of up in the air.
• 11:38
  SPEAKER_00: Should I go Long Beach?
• 11:38
  SPEAKER_00: Should I go to San Pedro?
• 11:40
  SPEAKER_00: Let us show you options in both cities and then you decide what you think is best.
• 11:44
  SPEAKER_00: Jack, I'm gonna give you the final word.
• 11:46
  SPEAKER_00: What would you like to finish up with?
• 11:47
  SPEAKER_01: So, you know, final thoughts.
• 11:49
  SPEAKER_01: Uh, I've owned property here in San Pedro since uh 2015.
• 11:53
  SPEAKER_01: I've been here, been seeing it turn around.
• 11:55
  SPEAKER_01: So if you're interested in San Pedro, hey, feel free to give me a call, DM, DM me, or find me on uh Instagram, broker Jack Patel.
• 12:03
  SPEAKER_01: And if you're a seller, give me a quick call.
• 12:06
  SPEAKER_01: We'll we can do a strategy session for your property if you're thinking of selling or even actually thinking of buying some more property here in San Pedro.
• 12:13
  SPEAKER_00: Um see you on the next video.
• 12:16
  SPEAKER_00: One thing I want to note, and and I'm just kind of proud, is that the the people that were that are partnering with us here at Sage Real Estate, we're not just talking the talk, we're walking the walk.
• 12:29
  SPEAKER_00: I mean, uh Jack has owned a lot of properties throughout San Pedro and other cities, and he's invested in it.
• 12:35
  SPEAKER_00: So he's someone, yes, is he gonna try to provide you value whether you're buying or selling?
• 12:39
  SPEAKER_00: Absolutely, but is he someone that's that's actually uh doing the investments?
• 12:44
  SPEAKER_00: Absolutely, and that's and that was one of the reasons why I was I was excited and proud that Jack would join Sage Real Estate because he has the experience, he believes in investing.
• 12:52
  SPEAKER_00: He talk about building wealth through real estate investment.
• 12:55
  SPEAKER_00: Jack's story is it, and so make sure you you follow Jack.
• 12:58
  SPEAKER_00: We're gonna have his information um in the description.
• 13:02
  SPEAKER_00: You're gonna be seeing more of them.
• 13:03
  SPEAKER_00: We're gonna be continuing to cover more San Pedro as we expand as a company.
• 13:08
  SPEAKER_00: Make sure to like, comment, and subscribe.
• 13:10
  SPEAKER_00: Until next time.