Editor’s note: New Year’s Outlook

At The Real Deal, we’re ushering in the new year with a sprinkling of hope tempered by a smattering of caution. Looking at it one way, we see blue skies ahead, thanks to a constant infusion of real estate investment and the flood of creative companies expanding in Los Angeles. Peered at from another direction, uncertainty clouds the horizon — a long-in-the-tooth economic recovery, a tighter lending environment, new constraints on much-ballyhooed Chinese buyers and, the most unpredictable of all, the whims of the new Oval Office incumbent.

Our January issue greets the new year by zooming in on one of L.A.’s most spectacular comebacks: Hollywood. From a gritty, crime-infested corner of the city at the end of the last century, the neighborhood has emerged as a hive of creative offices and urban living. Our series of stories beginning on page 26 delves into the backstory of this real estate revival.

Hollywood is also where the anti-development ballot measure that is rattling real estate investors, known alternately as the Neighborhood Integrity Initiative or Measure S, came to life. The battle began when the AIDS Healthcare Foundation sued to block a large residential development across the street from its international headquarters on Sunset Boulevard. Get the lowdown in the series of stories beginning on page 12.

Opponents say the measure could worsen the city’s well-known housing shortage. Yet no one knows for certain if the spate of luxury sky-high condominiums (with equally lofty asking prices) currently on the drawing boards will ease the housing crisis. Who can say if Angelenos will want to live in glassy boxes in the sky, or if instead, developers will be dependent on foreign buyers to move the new supply? The story on page 20 takes a look at how the condo craze may pan out.

Although much of the new development is centered around Downtown L.A. and trendy neighborhoods like Hollywood or the Arts District, we highlight new buildings that are rising in Santa Monica, on page 40, and in Anaheim, on page 50, both traditionally low-rise communities where millennial tastes are pushing more urban development.

Although the outlook for luxury retailers is soft nationwide, L.A.’s high streets are commanding top dollar for leases and investment sales. Rodeo Drive has preserved its perch as the second-priciest U.S. retail high street to lease a storefront on, after New York’s Fifth Avenue. Learn more about Rodeo Drive, Abbot Kinney Boulevard and Melrose Avenue in our block-by-block look at retail deals beginning on page 44.

We also sat down with two newsmakers to hear their thoughts on the real estate market. Beverly Hills Mayor John Mirisch, who grew up in the exclusive enclave, talked about why he took a different approach with two powerful developers. Get to know him better in our story on page 10. And we chatted with prolific developer Nelson Rising about his switch to renovating historic buildings on page 18.

We bookend the issue by peaking inside some record-breaking, über-luxury home deals on page 8, and by looking at how some current and former celebrity homes are being marketed for their land value on page 52.

Finally, it is worth re-emphasizing the two most important political factors about to influence L.A. At the local level, the March ballot measure could put the brakes on most large L.A. projects. At the national level, a maverick will be moving into the White House with no track record in public office. The fact that Trump will be the first developer to hold the awesome powers of the presidency does not remove the uncertainty that hangs over the real estate industry as he takes office.

Enjoy the issue.