Why Real Estate Success Isn’t About Timing — It’s About Perspective
- Rich Arzaga
- Oct 19
- 3 min read
This article by Jonathan Lansner, business columnist for the Southern California News Group, explores the evolving California apartment market. Beyond the tactical moves and creative development strategies he highlights, there are a few broader lessons here for real estate investors everywhere.
First, the piece offers a fascinating look at how a large, single builder can thrive in a challenging business environment — one known for high costs, strict regulations, and a housing shortage. The article details how this developer continues to profit while contributing to much-needed housing solutions. I’d like to use it as a springboard to touch on a few concepts that apply broadly across property types and long real estate cycles.
Real estate, done well, typically moves in 20-year cycles. These cycles vary not only by geography but also by property type — apartments, warehouses, retail, office, and so on. Over time, the cycle of property types rarely align.
For example, in recent weeks, the same news group has reported several apartment foreclosures or discounted sales in the East Bay — from Berkeley to Emeryville to Walnut Creek — where property values fell 30–40% in just a few years, wiping out tens of millions of dollars. While those investors ride down their losses, another builder, a few hundred miles south, is seizing opportunity. The takeaway: even within one asset class, investments behave differently depending on timing, strategy, and submarket. Some investors retreat; others quietly reenter.
Another point worth noting is how this developer is repurposing obsolete commercial real estate — offices, warehouses, and retail centers — into new residential communities that integrate restaurants and shops. While this is not a brand-new formula, it’s an approach that helps keep these locations relevant for decades, until the next shift in consumer and worker preferences. So, the next time you pass a half-empty shopping center, consider what might be coming: an Amazon distribution hub, a multifamily development, or a vibrant mixed-use community. Transforming those spaces takes years — to wind down existing leases, navigate local zoning, raise capital, and build — but it’s how the next generation of neighborhoods begins.
Finally, a smaller but important point — especially for those who assume real estate market data works like stock data.
Most would agree that the stock market is a “perfect market” — nearly all information about a stock is public and accessible (excluding illegal insider data) before an investor makes a decision.
Real estate is an “imperfect market.” Even in residential sales, MLS data leaves out crucial details such as seller concessions, repair credits, or leasebacks. Roughly 10% of transactions occur off-market, never appearing in public records. And at the institutional level, transparency declines further — there’s no central database capturing all large property deals.
That’s why one line from the article stands out:
“Irvine Co. would rank 12th among the nation’s top U.S. apartment owners if it participated in the National Multifamily Housing Council scorecards.”
Because Irvine Co. is privately held and doesn’t report its data, much of its market activity — billions of dollars’ worth — isn’t included in national statistics. These unreported transactions make it difficult to benchmark the true scope or performance of the investment real estate market.
The takeaway: Unlike the stock market, real estate operates with incomplete information. Benchmarks are fragmented, private, and often lagging. That’s why professional investors and advisors must constantly question the data they rely on — and understand what might be missing from it.
Lastly, I’ve always found Jonathan Lansner’s columns interesting. He weaves together employment, population migration, real estate, and business themes — often through a California lens. I left the state three years ago, in part because of its difficult business climate and aggressive tax policy, but I still follow his work with interest. While his perspective leans slightly progressive and sometimes omits findings that might complicate that narrative (I’ve written to him about a few examples), his data-driven approach to one of the country’s most complex economies is always worth reading.
Comments