“People are in desperate need of land”: Newmark’s Kevin Shannon on LA office landscape

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Kevin Shannon worked on the $ 182 million sale of the Torrance Tech Campus.

Kevin shannon
Co-responsible for
capital markets

Newmark Group Inc.
Sales: Over $ 65 billion
Lecturer: He is a guest speaker and moderator at USC.
Philanthropy: Shannon is a member of the Board of Directors of Big Brothers Big Sisters Catholic.

Kevin Shannon of Newmark Group Inc. is one of the top investment brokers in the United States, with over $ 65 billion in sales over a career spanning more than 35 years.
He joined Newmark in 2015 where he leads a team of 33 people in 16 markets in the western United States.
He was previously with CBRE Group Inc. for approximately 10 years.

What interested you in capital markets?

My passion for real estate came from a course at USC, and I knew when I took Rocky Tarantello’s course, I knew I wanted to do real estate. I started out as a leasing broker, then in 1995 I decided I was fed up with leasing and wanted to sell. … I was at Colliers Seeley (now Colliers International Group Inc.) at the time and I went to the president and I said, “I’m going to leave the company” because I wanted to make sales and capital markets, and he said, ‘No, you stay here and start our investment sales division.’ I went into the capital markets because I was bored doing small leases and found the sales to be more interesting and exciting.

What are buyers looking for in LA now?
Today, investors are following their research, and the research tells them to buy multi-family and industrial medical and Sun Belt and life science offices, then tells them to buy in some office markets like Burbank and Culver City. , markets where there is growth in employment and rental growth rates. … Investors follow their research and look for markets and sectors with favorable growth prospects.

How important are media and entertainment companies to the LA office market?
They are the main engine, the main engine of growth. The pandemic has increased the demand for content creation. When you are at home, you want to watch your Netflix or Prime Plus or Hulu. These media channels need content, so the pandemic has increased what was already a favorable growth product. Their prospects for continued growth are excellent. It’s the # 1 engine in LA … and (it) will drive the recovery of the office market.

What will future office spaces look like?

Most of these content creation companies, HBO and Disney and Amazons and Netflix, they’re big tech companies, and the competition for talent between these companies is fierce. They gravitate towards the best-in-class environment to help with recruitment and branding. … (Class) One product did its best and led the recovery.
There’s a dynamic going on in LA, and a new trend is you’re starting to see a lot of land. People are desperate for the land. … You see industrial developers buying class B and C office buildings… with the intention of building a new industrial product, and that helps class B and C offices. You’re going to see a lot of office buildings where the new owner wants to move tenants and build new industrial premises. … Office projects will end up being put on the back burner for industrial reconversion, a new dynamic that began a few months ago.

For office buildings that remain office buildings, how are investors and developers working to meet the changing needs for office space?
You have to follow the Joneses. If you have an older product, you need to renovate it; you need to create attractive campus facilities and environments for tenants. … You have to have the bells and whistles that A products bring into their campuses. You see developers upgrading the product to Class B to be competitive and get higher rents.
– Hannah Madan

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