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In a prior post, we noted how the commercial real estate market was expected to be strong through 2018, thanks to several positive economic factors. They include a strong job market, low interest rates and dwindling vacancies. The Los Angeles Times recently reported on another example of this trend. Rhode Island toy maker Hasbro recently decided to move its headquarters in Burbank to a larger space in the city’s media district. Specifically, Hasbro will now be located in the Media Studios North office park. The reasoning behind this move? It needed more room for its growing workforce. The 78,000 square footage of office space is nearly double the size of the previous building. And it reflects the ongoing opportunities in the Tri-Cities area of Pasadena, Glendale and Burbank. It is important to note that rents per square foot are increasing slightly, from $3.00 in the first few months of the year to $3.02 now. More importantly, vacancy rates have declined from 14.8 percent to 14 percent. The growing market is a departure from the first quarter of this year, as the job market suffered several months of declines and many were concerned about slowing economic growth overall. Nevertheless, commercial real estate opportunities should be undertaken with caution underscored with legal advice. An experienced real estate attorney can help investors understand the legal implications with acquiring property and forge creative financial deals. It remains to be seen whether these opportunities will continue as full employment may lead to slower commercial real estate growth.

In a prior post, we noted how the commercial real estate market was expected to be strong through 2018, thanks to several positive economic factors. They include a strong job market, low interest rates and dwindling vacancies. The Los Angeles Times recently reported on another example of this trend. Rhode Island toy maker Hasbro recently decided to move its headquarters in Burbank to a larger space in the city’s media district. Specifically, Hasbro will now be located in the Media Studios North office park. The reasoning behind this move? It needed more room for its growing workforce. The 78,000 square footage of office space is nearly double the size of the previous building. And it reflects the ongoing opportunities in the Tri-Cities area of Pasadena, Glendale and Burbank. It is important to note that rents per square foot are increasing slightly, from $3.00 in the first few months of the year to $3.02 now. More importantly, vacancy rates have declined from 14.8 percent to 14 percent. The growing market is a departure from the first quarter of this year, as the job market suffered several months of declines and many were concerned about slowing economic growth overall. Nevertheless, commercial real estate opportunities should be undertaken with caution underscored with legal advice. An experienced real estate attorney can help investors understand the legal implications with acquiring property and forge creative financial deals. It remains to be seen whether these opportunities will continue as full employment may lead to slower commercial real estate growth.

The real estate market in Southern California is enjoying healthy growth. That much is obvious given the number of cranes that are seen on a given day and how many more companies are vying for new and upgraded spaces. We noted in our last post how toy maker Hasbro will be moving into a new building that will accommodate its new and growing workforce. With such optimism about the commercial real estate market, the question must be posed: when will it end? For real estate investors, this is a critical question since the most common way to make money in real estate is to buy low and to sell high. If you have the misfortune of buying high in a hot market, it is less likely that your investment will appreciate. This is why the latest commercial real estate forecast from the UCLA Anderson School of Management is important. The forecast is a collection of views from real estate developers with respect to the market for the next three years, which is also essential given the amount of time it takes for a commercial project to be built. According to the latest survey, it appears that the commercial office market is topping out. This follows sentiments that rental rate growth and vacancy rates have already hit their apex. Because of this, developers and investors alike must be particularly careful with new projects, and the guidance of an experienced real estate attorney can guard against potential losses. The preceding is not legal advice.

The real estate market in Southern California is enjoying healthy growth. That much is obvious given the number of cranes that are seen on a given day and how many more companies are vying for new and upgraded spaces. We noted in our last post how toy maker Hasbro will be moving into a new building that will accommodate its new and growing workforce. With such optimism about the commercial real estate market, the question must be posed: when will it end? For real estate investors, this is a critical question since the most common way to make money in real estate is to buy low and to sell high. If you have the misfortune of buying high in a hot market, it is less likely that your investment will appreciate. This is why the latest commercial real estate forecast from the UCLA Anderson School of Management is important. The forecast is a collection of views from real estate developers with respect to the market for the next three years, which is also essential given the amount of time it takes for a commercial project to be built. According to the latest survey, it appears that the commercial office market is topping out. This follows sentiments that rental rate growth and vacancy rates have already hit their apex. Because of this, developers and investors alike must be particularly careful with new projects, and the guidance of an experienced real estate attorney can guard against potential losses. The preceding is not legal advice.

If you are a business owner looking for a new venue, you have probably learned about the trends shaping commercial real estate in Southern California. Essentially, the outlook is optimistic, meaning that construction of new buildings and renovations of older properties will continue at least until 2018 barring any major catastrophes. This may bring about a seminal question for business owners: whether to rent space or to buy property. Indeed, there are many who are not financially able to make a purchase right now, but given the desire for building owners to fill space, leasing may be an attractive option. Despite this, it is critical for business owners to closely scrutinize the terms of a lease, so that potential problems can be mitigated. This post will focus on a few important clauses to pay attention to. Sublease – It is important to have flexibility in the lease, given how business plans can change which could lead to your company relocating. So you should have the ability to rent the space to another tenant. After all, you should not be paying for space you are not doing business in. Co-tenancy clause – Part of the attraction of (and the cost for) a particular space is being next to a prime anchor tenant such as a Barnes & Noble or Best Buy. But if that tenant leaves, what will happen to your business? Because of this possibility, having a co-tenancy clause  that allows you to break the lease if the landlord does not replace an anchor tenant can be helpful. Exclusivity clause – In today’s competitive market, no one wants to be located next to a rival. As such, an exclusivity clause that bars a competitor to lease space near or next to your business should be considered. If you have additional questions about commercial leases, an experienced real estate attorney can help.

If you are a business owner looking for a new venue, you have probably learned about the trends shaping commercial real estate in Southern California. Essentially, the outlook is optimistic, meaning that construction of new buildings and renovations of older properties will continue at least until 2018 barring any major catastrophes. This may bring about a seminal question for business owners: whether to rent space or to buy property. Indeed, there are many who are not financially able to make a purchase right now, but given the desire for building owners to fill space, leasing may be an attractive option. Despite this, it is critical for business owners to closely scrutinize the terms of a lease, so that potential problems can be mitigated. This post will focus on a few important clauses to pay attention to. Sublease – It is important to have flexibility in the lease, given how business plans can change which could lead to your company relocating. So you should have the ability to rent the space to another tenant. After all, you should not be paying for space you are not doing business in. Co-tenancy clause – Part of the attraction of (and the cost for) a particular space is being next to a prime anchor tenant such as a Barnes & Noble or Best Buy. But if that tenant leaves, what will happen to your business? Because of this possibility, having a co-tenancy clause  that allows you to break the lease if the landlord does not replace an anchor tenant can be helpful. Exclusivity clause – In today’s competitive market, no one wants to be located next to a rival. As such, an exclusivity clause that bars a competitor to lease space near or next to your business should be considered. If you have additional questions about commercial leases, an experienced real estate attorney can help.

The Harvard Business Review (HBR) is a highly prestigious, often-cited source of information on leading trends and the prevailing views of business elites. As such, it is hardly an oracle of the future. And so, when HBR devotes significant space to a phenomenon such as coworking, it suggests that the phenomenon has already become influential among decision makers. In the case of coworking that is indeed the case. And as we will discuss in this post, the rising popularity of coworking has important implications for the commercial leasing market in Los Angeles. HBR on the benefits of coworking spaces Coworking spaces are workplaces in which members don’t all work for the same company yet share a communal setting. This setting often features lots of amenities, such as free beer on tap or the ability to bring your dog to work. It isn’t amenities such as free beer or gourmet coffee that are the real driver, however, behind the increasing popularity of such spaces. As the HBR noted in a recent issue, the popularity comes from the perception that a coworking setup offers a more meaningful way to work. Since the members don’t all work for the same employer, traditional office politics are downplayed. Instead, there is the opportunity to collaborate and have conversations with other professionals – some of whom are doing very different types of work. Harvard Business Review conducted surveys that identified other sources of satisfaction as well with the coworking setting. Another benefit is participants in coworking spaces often have the opportunity to help each other out, using their unique skills sets. And they get to do this in ways that don’t involve trying to climb the corporate ladder. Small wonder, then, that so many people have found coworking so meaningful – and that it is becoming so popular. This is reflected in the Coworking Manifesto, an online statement that has been signed by people in upwards of 1,700 workspaces. Implications for commercial leases in LA The popularity of coworking is also affecting the commercial leasing market in Los Angeles. As the LA Times reported this week, firms that offer coworking space are getting plenty of business from tenants looking for that space. As the Times pointed out, it used to be that coworking settings were associated mostly with startup companies (often in the tech industry) and with independent professionals looking for someplace other than or in addition to a home office. What’s happening now is that more and more companies in more and more industries are looking at the advantages of coworking spaces. It isn’t only the collaborative benefits of the shared space that are driving this, of course. The fact that leases for coworking space tend to be short-term is another. Many companies like the flexibility of such arrangements. After all, a company may seek to respond to an opportunity in its industry by adding contract jobs or perhaps expanding in a new city. Using a coworking space allows for such responsiveness, while also keeping costs down and allowing for a way of working that employees have enthusiastically embraced. What’s best for a particular company As with any other commercial lease, it’s important to get sound legal counsel before signing off on a lease for a coworking space. By doing so, you will be in position for the proverbial win-win: furthering your own interest while doing something that benefits others as well.

The Harvard Business Review (HBR) is a highly prestigious, often-cited source of information on leading trends and the prevailing views of business elites. As such, it is hardly an oracle of the future. And so, when HBR devotes significant space to a phenomenon such as coworking, it suggests that the phenomenon has already become influential among decision makers. In the case of coworking that is indeed the case. And as we will discuss in this post, the rising popularity of coworking has important implications for the commercial leasing market in Los Angeles. HBR on the benefits of coworking spaces Coworking spaces are workplaces in which members don’t all work for the same company yet share a communal setting. This setting often features lots of amenities, such as free beer on tap or the ability to bring your dog to work. It isn’t amenities such as free beer or gourmet coffee that are the real driver, however, behind the increasing popularity of such spaces. As the HBR noted in a recent issue, the popularity comes from the perception that a coworking setup offers a more meaningful way to work. Since the members don’t all work for the same employer, traditional office politics are downplayed. Instead, there is the opportunity to collaborate and have conversations with other professionals – some of whom are doing very different types of work. Harvard Business Review conducted surveys that identified other sources of satisfaction as well with the coworking setting. Another benefit is participants in coworking spaces often have the opportunity to help each other out, using their unique skills sets. And they get to do this in ways that don’t involve trying to climb the corporate ladder. Small wonder, then, that so many people have found coworking so meaningful – and that it is becoming so popular. This is reflected in the Coworking Manifesto, an online statement that has been signed by people in upwards of 1,700 workspaces. Implications for commercial leases in LA The popularity of coworking is also affecting the commercial leasing market in Los Angeles. As the LA Times reported this week, firms that offer coworking space are getting plenty of business from tenants looking for that space. As the Times pointed out, it used to be that coworking settings were associated mostly with startup companies (often in the tech industry) and with independent professionals looking for someplace other than or in addition to a home office. What’s happening now is that more and more companies in more and more industries are looking at the advantages of coworking spaces. It isn’t only the collaborative benefits of the shared space that are driving this, of course. The fact that leases for coworking space tend to be short-term is another. Many companies like the flexibility of such arrangements. After all, a company may seek to respond to an opportunity in its industry by adding contract jobs or perhaps expanding in a new city. Using a coworking space allows for such responsiveness, while also keeping costs down and allowing for a way of working that employees have enthusiastically embraced. What’s best for a particular company As with any other commercial lease, it’s important to get sound legal counsel before signing off on a lease for a coworking space. By doing so, you will be in position for the proverbial win-win: furthering your own interest while doing something that benefits others as well.

Finding the right space for your business feels exciting. It marks growth and creates stability. The challenge is that commercial leases in California are long and detailed contracts. If you rush through them, small details can lead to major problems later. Knowing where many tenants stumble helps you sidestep the same mistakes. HIDDEN COSTS IN LEASE TERMS A lease that looks affordable on paper may hide expensive obligations. Triple net leases often pass along property taxes, insurance and maintenance. If those costs are not capped, they can rise faster than expected. Careful review keeps you from committing to payments that hurt your bottom line. UNCLEAR REPAIR AND MAINTENANCE DUTIES Another trap lies in repair language. Landlords sometimes expect tenants to handle repairs that go beyond day-to-day upkeep, even structural issues. Unless the lease states who is responsible, you could face bills that were never in your budget. Clarity up front protects you from these surprises. RESTRICTIONS THAT LIMIT GROWTH Your lease should fit your business today and in the future. Use clauses that limit operations or block subleasing can prevent growth. When your company changes direction or expands, these limits may stop you from making smart moves. Spotting restrictive language early preserves flexibility. OVERLOOKED DISPUTE RESOLUTION TERMS Most tenants skip over dispute resolution clauses yet they carry real weight. Some require arbitration, others force you to handle cases far from your property. Both options can add time and expense if conflict arises. Addressing this section before you sign can save you headaches later. PROTECTING YOUR BUSINESS A commercial lease is more than a rent check. It defines your rights and responsibilities for years. By catching hidden costs, unclear duties, restrictive clauses and unfair dispute rules, you safeguard your business. Speaking with a real estate attorney before signing helps ensure your lease supports your goals and keeps your investment secure.

Finding the right space for your business feels exciting. It marks growth and creates stability. The challenge is that commercial leases in California are long and detailed contracts. If you rush through them, small details can lead to major problems later. Knowing where many tenants stumble helps you sidestep the same mistakes. HIDDEN COSTS IN LEASE TERMS A lease that looks affordable on paper may hide expensive obligations. Triple net leases often pass along property taxes, insurance and maintenance. If those costs are not capped, they can rise faster than expected. Careful review keeps you from committing to payments that hurt your bottom line. UNCLEAR REPAIR AND MAINTENANCE DUTIES Another trap lies in repair language. Landlords sometimes expect tenants to handle repairs that go beyond day-to-day upkeep, even structural issues. Unless the lease states who is responsible, you could face bills that were never in your budget. Clarity up front protects you from these surprises. RESTRICTIONS THAT LIMIT GROWTH Your lease should fit your business today and in the future. Use clauses that limit operations or block subleasing can prevent growth. When your company changes direction or expands, these limits may stop you from making smart moves. Spotting restrictive language early preserves flexibility. OVERLOOKED DISPUTE RESOLUTION TERMS Most tenants skip over dispute resolution clauses yet they carry real weight. Some require arbitration, others force you to handle cases far from your property. Both options can add time and expense if conflict arises. Addressing this section before you sign can save you headaches later. PROTECTING YOUR BUSINESS A commercial lease is more than a rent check. It defines your rights and responsibilities for years. By catching hidden costs, unclear duties, restrictive clauses and unfair dispute rules, you safeguard your business. Speaking with a real estate attorney before signing helps ensure your lease supports your goals and keeps your investment secure.

A commercial lease generally involves a long-term commitment. Most standard commercial leases last for at least two years, if not longer. The language included in standard commercial leases usually makes a tenant responsible for rent amounts even if the business fails or the tenant ceases operating the business at the rental property. In scenarios where a commercial tenant must relocate to a bigger space or goes out of business, landlords can demand that the tenants pay the full amount of the remaining rent due. In some cases, either the landlord or the tenant may propose special inclusions in the lease agreement that could allow for the early termination of the rental arrangement in some cases. A force majeure clause can end a lease early when there are unusual and uncontrollable circumstances. WHAT IS A FORCE MAJEURE CLAUSE? The phrase force majeure is a French term that means greater power or superior force. In the world of commercial leases, a force majeure clause generally only takes effect in highly unusual circumstances. People sometimes refer to force majeure clauses as “act of God clauses.” When there are unforeseeable and uncontrollable circumstances that prevent a landlord or tenant from fulfilling their lease obligations, a force majeure clause may absolve them of legal and financial culpability. Circumstances that could trigger force majeure clauses include war, natural disasters and acts of terrorism. Sometimes, that means damage to the rental space. It could also relate to an inability to do business due to extreme and uncontrollable circumstances. Landlords may also benefit from force majeure clauses. Tenants may not be able to hold them legally responsible for a failure to maintain the facilities or provide certain services in accordance with the lease. Such clauses can be mutually beneficial. They can also potentially lay the groundwork for a complex legal dispute. If the two parties do not agree about whether the situation justifies implementing the force majeure clause, then the matter may need to go to court. Learning more about unique inclusions intended to enhance the protection of commercial leases can help both landlords and tenants. Professionals who know the purpose of specific lease clauses may be able to use that knowledge to negotiate appropriate lease terms.

A commercial lease generally involves a long-term commitment. Most standard commercial leases last for at least two years, if not longer. The language included in standard commercial leases usually makes a tenant responsible for rent amounts even if the business fails or the tenant ceases operating the business at the rental property. In scenarios where a commercial tenant must relocate to a bigger space or goes out of business, landlords can demand that the tenants pay the full amount of the remaining rent due. In some cases, either the landlord or the tenant may propose special inclusions in the lease agreement that could allow for the early termination of the rental arrangement in some cases. A force majeure clause can end a lease early when there are unusual and uncontrollable circumstances. WHAT IS A FORCE MAJEURE CLAUSE? The phrase force majeure is a French term that means greater power or superior force. In the world of commercial leases, a force majeure clause generally only takes effect in highly unusual circumstances. People sometimes refer to force majeure clauses as “act of God clauses.” When there are unforeseeable and uncontrollable circumstances that prevent a landlord or tenant from fulfilling their lease obligations, a force majeure clause may absolve them of legal and financial culpability. Circumstances that could trigger force majeure clauses include war, natural disasters and acts of terrorism. Sometimes, that means damage to the rental space. It could also relate to an inability to do business due to extreme and uncontrollable circumstances. Landlords may also benefit from force majeure clauses. Tenants may not be able to hold them legally responsible for a failure to maintain the facilities or provide certain services in accordance with the lease. Such clauses can be mutually beneficial. They can also potentially lay the groundwork for a complex legal dispute. If the two parties do not agree about whether the situation justifies implementing the force majeure clause, then the matter may need to go to court. Learning more about unique inclusions intended to enhance the protection of commercial leases can help both landlords and tenants. Professionals who know the purpose of specific lease clauses may be able to use that knowledge to negotiate appropriate lease terms.