USC Trustee Rick Caruso headlines Price real estate talk spanning homelessness, self-driving cars, retail
USC Trustee Rick Caruso, left, with Lewis C. Horne, president of global commercial real estate services provider CBRE, at a discussion hosted by the USC Price Real Estate Alumni & Affiliates (Photo by David Giannamore)
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By Matthew Kredell
Visionary real estate developer and USC Trustee Rick Caruso was joined by Lewis C. Horne, president of global commercial real estate services provider CBRE, for a discussion covering the future of retail, potential impact of automated vehicles and the homeless issue in Los Angeles.
The May 1 event at Caruso’s signature property, The Grove, helped launch the new USC Price Real Estate Alumni & Affiliates (PREAA) network. Roger Vincent, who covers commercial real estate for the Los Angeles Times, facilitated the conversation.
USC Price School of Public Policy Dean Jack H. Knott opened the talk by noting that these two giants of real estate are both Trojans, who met at USC and have been best friends ever since.
“Lew Horne and Rick Caruso are both longtime dedicated Trojans who have risen to the very top of the real estate industry,” Knott said. “They make an impact in Southern California and beyond really every day. Over the years, both have influenced our programs in real estate by hiring our students and alumni, and being involved in various Price School advisory boards.”
Coincidentally, neither began their careers in real estate. Caruso, founder and CEO of Caruso Affiliated, began as a lawyer, while Horne started at IBM.
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Helping solve homelessness
Caruso, whose portfolio of 13 properties around Southern California also includes The Americana at Brand in Glendale, admitted that he feels somewhat guilty that he doesn’t have a property downtown, given his love for Los Angeles.
He indicated that the neighborhood’s growing challenge related to homelessness could hurt investment downtown. One-fifth of the nation’s homeless population resides in California, including 58,000 in Los Angeles County.
However, Caruso doesn’t believe the situation is hopeless.
He called on local officials “to be bold, make some decisions and don’t worry about getting re-elected — just do the right thing.”
He also proposed that the broader public should take a stand to ensure that clear actions are taken to help remedy the homelessness crisis. “We all as residents and investors in L.A. should demand that this homeless issue get fixed… People shouldn’t be living like this, and we shouldn’t allow it,” said Caruso, a Price School alum who now serves on its Board of Councilors.
Horne commented that homelessness isn’t just a public problem for governments to solve. It needs attention from the private sector.
“We’ve got the most creative and financially sound economy in Los Angeles, and we haven’t been able to figure this out,” Horne said. “It’s something we’ve got to fix, and it’s got to be this combination of not just our elected officials, but part of the private world, that is helping to get this done.”
The ripple effect of automated vehicles
Caruso asserted that automated vehicles are going to be a “game changer” for retail properties and the city in general. He is beginning to plan for a future of less parking revenue at The Grove and other properties, which could eventually be a huge benefit as parking structures are no longer needed, freeing up valuable real estate.
He also said that city transportation planning needs to consider the impact automated vehicles will have on public transit.
“As a city government, you’ve got to ask yourself, ‘do you continue to invest billions of dollars into rail when you’re going to have a driverless system that will probably convert to buses that don’t need that kind of capital investment and can be running all over the place?’” Caruso said.
What’s next for retailers?
Caruso rebutted the theory that online shopping is killing brick-and-mortar business, pointing out that retailers that started online such as Amazon and Warby Parker are now adding storefronts.
“What’s killing brick and mortar is bad brick and mortar,” Caruso said. “Bad retailers are dying. Amazon is the best thing to happen to brick and mortars. People find that horrifying to say, but it’s not. All the smart online retailers realize they need to have a physical presence.”
The “Evening with Rick Caruso” event was the first event offered by the Price Real Estate Alumni & Affiliates. Sonia Savoulian, associate director for programs in real estate at USC Price, explained that there has long been a strong informal alumni network among Dollinger MRED graduates, but it was important to create an official network ahead of the first graduating class from the Bachelor of Science in Real Estate Development (BRED) program.
“We wanted to make sure we had a strong alumni association in place so when those students become alumni, they will automatically be part of an established real estate network,” Savoulian said. “Today was an important inaugural event to get our alumni association launched and ready for our BRED students as they start to graduate. I expect our alumni association, PREAA, will really be there to help our students as they go off into the professional world of real estate.”