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Los Angeles Real Estate Law Blog

Life science popularity impacts properties with commercial leases

Life science is an increasingly popular field throughout the United States, including in Los Angeles. Part of the reason for this is that pharmaceutical firms are increasingly pairing with incubator laboratories along with startup companies to drive research/development. This is great news for those who are interested in life science careers, but it is also welcome news for investors who are interested in purchasing properties featuring commercial leases.

From the years of 2014 to 2017, the number of people employed in biotech research skyrocketed 27 percent. Meanwhile, the overall growth rate for jobs during this period of four years was just 7 percent. Also, over $60 billion worth of venture capital went to biotechnology companies during this time period.

Sales of properties with commercial leases were high in 2018

Sales of nonresidential properties reached near-record heights in 2018, with many of the biggest portfolio deals coming from the managers of private funds. In addition, today's low interest rates may make for a strong 2019. This is good news for people who are interested in investing in properties featuring commercial leases in Los Angeles or the surrounding area this year.

The value of commercial properties that sold for at least $2.5 million in the United States reached a total of more than $562 billion in 2018. This was an increase of 15 percent compared with 2017. It was also not too far from the record amount of nearly $570 billion that was set back in 2015.

Investing in California real estate is tricky business

California's real estate market is unique. Market trends for the state can differ from anywhere else in the country, and this can make it tricky for people who invest in residential or commercial property. If you invested your financial resources into the California market, it is important for you to have the right information to protect your investment. 

It takes diligence, persistence and knowledge to effectively navigate the challenges of investing in real estate in California. This is especially true for residential investments, as some industry experts believe that home prices are approaching a bubble. Right now, residential real estate is quite expensive, and many people cannot afford homeownership in many areas.

Properties with commercial leases offer many benefits

Based on traditional wisdom, investing in nonresidential properties across the United States, including in Los Angeles, is generally a good idea. Still, does this remain true for 2019 -- specifically when it comes to investing in properties featuring commercial leases? Industry experts say that yes, commercial real estate investing is worthwhile this year for multiple reasons.

First, commercial properties always offer a return. As a result, it is not the same as shared ownership. With shared ownership, bad management decisions and undesirable market conditions can cause a rapid decline in share values. However, with commercial property investing, as long as investors are smart about their property purchases, they can continue to receive streams of income from rent and also have properties to sell as they wish.

AI may impact market for buildings with commercial leases

Artificial intelligence, or AI, is infiltrating nearly all sectors of today's economy in Los Angeles and elsewhere. Therefore, naturally, the market for properties featuring commercial leases may soon experience an AI-driven revolution. Why exactly? Because AI has the potential to make the real estate industry operate more efficiently and profitably and become more service oriented.

At this point, however, AI has not yet gained a strong foothold in the commercial real estate world. The reason for this is that real estate is an industry where the adoption of technology is not occurring at a rapid pace. Still, the technology could easily transform the process of completing commercial real estate transactions in the years ahead.

2019 market for properties with commercial leases looks promising

According to industry experts, the year of 2018 was a great one for the market of non-residential properties. This year should be another great one, too. Therefore, those who are interested in purchasing properties in Los Angeles and elsewhere featuring commercial leases may have a lot to look forward to in the months ahead.

According to commercial real estate experts, 2018 saw many increases in the interest rate. However, these rate hikes did not put a damper on the real estate market's activity. Industrial and multi-family properties were especially in demand, and it appears that they are continuing to steal the spotlight in 2019.

Stock market has bearing on properties with commercial leases

Research shows that December was the hardest month for the United States stock market in the past 10 years. Naturally, many consumers and investors may be wondering how the economy around the globe will fare in 2019. Investors in Los Angeles might also wonder how the market's current situation will impact deals involving properties featuring commercial leases.

The truth is, even though the stock market is often viewed as an indicator of the nation's economic status, the United States' economic situation is much more complicated. To get a complete picture of it, in addition to looking at stocks, one must also look at real estate. Stocks and real estate differ in that investors can trade stocks instantaneously, while a real estate transaction can take months and even years to finish.

Buying or selling in L.A. in 2019? Here's what you need to know

Buying or selling either commercial or residential property is a complex process, especially in the Los Angeles area. There are many factors to consider when preparing to move forward with this important decision, including how you can minimize your financial risks and reduce the chance of complications. It may be beneficial to look at expectations for real estate trends in the LA-metro area and throughout California for 2019.

In order to determine what both buyers and sellers should expect this year, industry experts looked at trends over the last few years, ages of buyers and other economic factors. Understanding trends and preparing before you list or buy can help you have realistic expectations as you navigate this potentially complex process. Buying or selling property is a major financial and legal transaction, and in a market like LA, you may find it beneficial to have support from the very beginning.

New tech to impact transactions involving commercial leases

In the property investing field in Los Angeles and elsewhere, there are plenty of myths and misunderstandings. This is particularly true, considering that the industry has many technology startups poised to drive changes in the industry. Here is a look at a couple of notable myths related to transactions involving buildings featuring commercial leases.

First, a common real estate myth is that the relationships fundamentally drive the industry, so technology cannot replace many aspects of the industry. The reality is that commercial real estate transactions and tasks, such as property management and office leasing, are quite unique and complex. New technology can easily help with streamlining transactions, as well as aggregating data and matching potential possible lessees with appropriate options, for example.

Factors that create vacancies of buildings with commercial leases

Areas of Southern California, including Los Angeles, have experienced nine consecutive years of economic gains. This has sparked a shortage of vacant buildings featuring commercial leases. However, the economy is currently cooling, which means more vacant properties are becoming available for investors to purchase. Here is a glimpse at a handful of situations that can lead to real estate property vacancies.

First, when a merger and acquisition takes place, a vacancy can quickly occur. During this type of transaction, it is common for the buyer and seller to share the same industry. Following the sale, either the buyer's or the seller's building is no longer needed, so it becomes a vacant property that the newly formed company ends up putting on the market.

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