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Buildings with commercial leases in high demand

Southern California currently is in a seller's commercial real estate market. This is largely due to the imbalance between supply and demand -- or the available buildings versus businesses that are interested in expanding. This current trend impacts those involved with commercial leases in Los Angeles.

One reason for the imbalance that exists between supply and demand is the fact that there is not much new construction. Part of the reason for this lack of brand-new construction is the lack of land that is still undeveloped in the southern part of the state. Most of the new building that has taken place during the past few years involved razing existing yet obsolete buildings to create new buildings.

In addition, new construction is lacking simply because it is expensive. Land prices remain a major element to consider in new construction. In fact, in some cases, the price of land makes up half of the cost, particularly when old buildings have to be demolished. Furthermore, local counties and cities have stringent regulatory requirements that drag out the time it takes to erect new buildings.

For those interested in selling their commercial properties, now appears to be an ideal time due to the growing demand for them. In light of this, businesses that wish to grow and are thus looking for commercial leases must be aggressive in order to claim them in the current market. An attorney in Los Angeles can help with the process of negotiating leases in a manner that ultimately protects business owners' best interests so that they can avoid making mistakes that will end up costing them financially down the road.

Source:, "A shortage of commercial real estate -- Why?", Allen Buchanan, June 10, 2017

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