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Commercial leases may become more popular in submarkets

| Nov 30, 2017 | Commercial Leases

In Orange County, California, office rent over the past two years has grown at the highest rate seen in the United States — 23 percent. A major reason for this growth is that technology firms are being forced to expand into downtown areas and submarkets near core markets due to a lack of space in the core markets. This may spell good news for those offering commercial leases in downtown Los Angeles.

Submarkets as well as downtown areas featuring skylines are becoming more in-demand among tech companies versus the traditional brick buildings that they have historically preferred. This is quickly creating new opportunities for investors in commercial real estate in these downtown areas and submarkets. The best part about this trend is that tech companies are willing to pay premium prices for office spaces in these locations.

From the perspective of an investor, technology markets that are appealing to occupiers by offering growing high-technology labor pools and low rents for office space are the ones most likely to grow in the immediate future. Still, the business cycle naturally experiences swings. As a result, firms that have realistic projections for growth and realistic valuations, along with practical exit strategies, will help to guard investors against losses.

The commercial real estate world throughout the United States is constantly changing, but right now, real estate investors interested in offering commercial leases in submarkets and downtown areas may want to take advantage of deals in these areas while they are still available. Still, navigating the purchase of commercial real estate can understandably be tricky. An attorney in Los Angeles can provide the guidance necessary to seal the deal in a manner that should benefit an investor’s bottom line long term.

Source:, “Orange County California Enjoys Highest Office Rent Growth in U.S. Over Last Two Years at 23 Percent“, Michael Gerrity, Nov. 16, 2017