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Factors that create vacancies of buildings with commercial leases

| Dec 27, 2018 | 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.

Second, vacancies might form if companies sell their larger spaces to take advantage of smaller rental spaces. Smaller spaces offer the benefit of being easier to manage and coming with cheaper rents, thus saving companies on costs. Modern technologies are making it increasingly easier for businesses to function with less room, such as automation and higher racks, as well as lift trucks. Logistics experts are also available to advise companies on how to maximize less space.

When vacancies are created in Los Angeles, investors would be wise to take advantage of them if they seem to be high-potential properties. The trick for many investors, though, is figuring out how to navigate real estate transactions involving commercial leases. Fortunately, an attorney can provide an investor with the direction he or she needs to seal the deal while making sure that his or her legal rights are safeguarded each step of the way.