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Commercial leases on the rise as marijuana growing grows

On Behalf of | Oct 19, 2017 | Commercial Leases

Legal marijuana growers in California, including in Los Angeles, are causing rents and prices for industrial properties to increase exponentially. In fact, in some parts of Sacramento, prices are jumping to never-before-seen heights. This may be good news for those interested in selling commercial real estate or offering commercial leases.

According to commercial real estate brokers, light-industrial buildings and warehouses are selling for double the typical asking prices. In addition, rents have jumped to four to five times the normal rent prices in a particular area on the southeastern part of Sacramento. The heating up of this market is leading up to recreational marijuana’s legalization next year in California.

Voters in California approved marijuana’s legalization in 2016 with Proposition 64. However, counties and cities are retaining a lot of say in where and how legal marijuana may be grown. Sacramento’s adoption of marijuana-growing ordinances makes it a unique major urban area in California — one that is drawing a large number of businesspeople, even those from other states who want to own legitimate marijuana-growing businesses. A real estate bubble may occur in several years, but the value of properties may be sustained.

The idea of higher rents and prices may be appealing for property owners who are interested in selling their properties or offering commercial leases. However, navigating commercial real estate transactions can be tricky, with mistakes potentially costing a property owner or investor a deal. An attorney in Los Angeles can strive to ensure that one’s goals are ultimately achieved in today’s high-demand, competitive real estate market.

Source:, “Pot growers take over warehouse space in Sacramento”, Hudson Sangree, Oct. 9, 2017