Nicholas Marine Talks Real Estate Investing in LA and Beyond (Interview)

The Los Angeles real estate market is kind of legendary at this point. Since its earliest years, LA has attracted eager investors in both commercial and residential real estate. 

That said, engaging in real estate investing in Southern California is intimidating and (typically) very expensive. 

But real estate investor Nicholas Marine provided us with some fantastic insights for anyone looking to explore investment options out here in the LA area. 

Marine is a seasoned investor who has been working with major real estate investment firms for years, such as Starwood Capital Group and Spear Street Capital. At the moment, Marine is working with a fast-growing real estate investment group in New York, with more than $1 billion in dedicated real estate capital. 

A big part of Marine's approach to real estate investing, and an important part of his advice to investors, which you'll find below, is diligent research and consideration of how each investment is going to affect the surrounding area. 

If you're still relatively new to real estate investing, our interview with Marine is a great way to gain a better understanding of what it takes to make moves that are going to sow the seeds of success.  

Real estate investment has been a popular investment opportunity here in LA for decades. Do you think LA still has a lot to offer in terms of real estate investing?

Marine: I like LA due to the diverse options it offers for real estate investors. There is a strong residential market, as well as a booming film industry driving up the demand for warehouse studio space, both on the institutional and boutique side. I'd like to see LA stabilize from a commercial perspective, especially Downtown. There are a lot of social issues including homelessness, crime, and lack of good public transport that place downward pressure on real estate prices.

Have you dealt directly with real estate investment in Los Angeles? 

Marine: I have been involved in a number of acquisition and financing opportunities in both DTLA and Santa Monica. However, I've never been part of a finalized transaction.

Do you foresee an increase in mixed-use buildings in the near future?  

Marine: I see a general increase in mixed-use across the US, and I don't believe LA will be an exception. There is a strong demand to integrate living with where people enjoy spending time on weekends, and when coupled with convenience, mixed-use will continue to see positive momentum.

Do you think real estate investment changes drastically from city to city? 

Marine: Yes. Each city, each submarket, each block within a submarket, has different characteristics that real estate investors need to be aware of. Some are controllable like retail offerings in the area, but many, like regulations and taxes, are not. Real estate investors need to be in sync with national market dynamics, as well as city and submarket and micro-location specific ones.

Should investors always consider the hyperlocal effects of each real estate investment? 

Marine: Yes. Investors need to be conscious of the projected impact an investment will have, if any, on the micro-location in which they're investing. For example, building a hotel with amenity offerings will cause congestion and noise on the block where it's built. How will this impact the community? Will the pollution and noise pollution be positively offset by economic activity? These are all questions good real estate investors will ask.

Can you comment on any challenges specific to real estate investing in Southern California? 

Marine: California has high taxes, strict laws, and has seen a lot of businesses move to Arizona and Texas where regulations are more relaxed and taxes are lower. Business environments challenge residential and commercial real estate tremendously. Southern California is also very expensive, which has stunted its recent growth when compared to areas with lower costs of living.

Do you have a message for first-time real estate investors? 

Marine: Get passionate about a city or location. Read local news, drive around, walk every block, and speak to people living there. Develop a granular knowledge for a location and you will have an ability to recognize relative value far greater than your competitors.