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Across the United States in 2019, commercial real estate was considered a safe and reliable investment for developers and businesses seeking to grow their enterprises in business districts. However, the trend has sharply reversed in 2023, and now commercial real estate is considered a much riskier endeavor for builders and investors, as the return to office trend has tapered out and many companies are staying out of the Financial Core here in Los Angeles. Now, it is important for developers and commercial landlords to reconsider their holdings and prospective projects, taking into account the new reality and adapting to these new challenges. THE LANDSCAPE HAS CHANGED FOR COMMERCIAL REAL ESTATE There are few historic shifts in real estate that can compare with what has happened in commercial real estate over the last three years. Last month, Los Angeles’s Downtown hit a record of 30% vacancy rate for commercial real estate as many employers continue to use work-from-home models, and the value of the LA commercial real estate market has dropped nearly 40% in the past three years. How developers and landowners respond to these challenges is important, and there are several options that can be explored to help combat this trend. REINVEST The best option for property owners with high vacancy rates is to reinvest in the property, updating the facilities and amenities to create a more desirable property for commercial renters still in the market. New, and recently renovated properties are still performing well in most markets, and this can help turn the trend around for individual owners. RETROFIT Another option that commercial landowners can pursue is to retrofit their properties to attract a different type of client. Many office jobs are still remaining on the sidelines of the commercial market, so retrofitting the property into a flexible work environment may be a good opportunity to capture a growing market of commercial renters. REMODEL In some cases, a drastic change may be necessary to reinvigorate growth, and for that, a complete remodel of the building for a different purpose such as residential use may be appropriate. While not possible in all areas due to zoning and land use restrictions, it can open up an entirely new field of renters for the commercial landowner to target.

Across the United States in 2019, commercial real estate was considered a safe and reliable investment for developers and businesses seeking to grow their enterprises in business districts. However, the trend has sharply reversed in 2023, and now commercial real estate is considered a much riskier endeavor for builders and investors, as the return to office trend has tapered out and many companies are staying out of the Financial Core here in Los Angeles. Now, it is important for developers and commercial landlords to reconsider their holdings and prospective projects, taking into account the new reality and adapting to these new challenges. THE LANDSCAPE HAS CHANGED FOR COMMERCIAL REAL ESTATE There are few historic shifts in real estate that can compare with what has happened in commercial real estate over the last three years. Last month, Los Angeles’s Downtown hit a record of 30% vacancy rate for commercial real estate as many employers continue to use work-from-home models, and the value of the LA commercial real estate market has dropped nearly 40% in the past three years. How developers and landowners respond to these challenges is important, and there are several options that can be explored to help combat this trend. REINVEST The best option for property owners with high vacancy rates is to reinvest in the property, updating the facilities and amenities to create a more desirable property for commercial renters still in the market. New, and recently renovated properties are still performing well in most markets, and this can help turn the trend around for individual owners. RETROFIT Another option that commercial landowners can pursue is to retrofit their properties to attract a different type of client. Many office jobs are still remaining on the sidelines of the commercial market, so retrofitting the property into a flexible work environment may be a good opportunity to capture a growing market of commercial renters. REMODEL In some cases, a drastic change may be necessary to reinvigorate growth, and for that, a complete remodel of the building for a different purpose such as residential use may be appropriate. While not possible in all areas due to zoning and land use restrictions, it can open up an entirely new field of renters for the commercial landowner to target.

As a real estate developer, you’ll be all too aware that every part of the building process comes with its own risks. You’re exposed to being liable for a claim from day one. To protect yourself, your employees and your business you know that it’s important you have the right insurance in place. What are the risks to you if you don’t? 1. YOU MAY FIND YOURSELF LIABLE FOR A NEGLIGENCE CLAIM As a developer, you’re responsible for the acts and omissions of everyone working for you. As humans, people make mistakes. If you don’t have the right professional liability insurance in place, you may find yourself facing a hefty claim against the company if the mistakes that were made are significant and caused damage or injury. 2. YOU MIGHT NOT BE COVERED FOR CONSTRUCTION DEFECTS After the development has been finished, a real estate developer’s worst nightmare is that issues come to light in the way properties have been constructed. It’s expensive, time-consuming and reputationally damaging. If you don’t have insurance in place to cover you in the event this happens, it can cost you a huge amount. Given that these defects may not be uncovered for many years, making sure you’re insured is even more important as it’s almost impossible to plan for financially. 3. EXTREME WEATHER MAY TOPPLE YOUR BUSINESS As a developer, weather can be your best friend and your worst enemy. If you don’t have the right level of construction insurance in place in the event that you face extreme weather you can face a number of consequences including damage to properties and machinery as well as paying financial penalties for not finishing a job on time. A careful and experienced review of your insurance requirements and policy documentation at the outset can help save you time, money and legal hassles later.

As a real estate developer, you’ll be all too aware that every part of the building process comes with its own risks. You’re exposed to being liable for a claim from day one. To protect yourself, your employees and your business you know that it’s important you have the right insurance in place. What are the risks to you if you don’t? 1. YOU MAY FIND YOURSELF LIABLE FOR A NEGLIGENCE CLAIM As a developer, you’re responsible for the acts and omissions of everyone working for you. As humans, people make mistakes. If you don’t have the right professional liability insurance in place, you may find yourself facing a hefty claim against the company if the mistakes that were made are significant and caused damage or injury. 2. YOU MIGHT NOT BE COVERED FOR CONSTRUCTION DEFECTS After the development has been finished, a real estate developer’s worst nightmare is that issues come to light in the way properties have been constructed. It’s expensive, time-consuming and reputationally damaging. If you don’t have insurance in place to cover you in the event this happens, it can cost you a huge amount. Given that these defects may not be uncovered for many years, making sure you’re insured is even more important as it’s almost impossible to plan for financially. 3. EXTREME WEATHER MAY TOPPLE YOUR BUSINESS As a developer, weather can be your best friend and your worst enemy. If you don’t have the right level of construction insurance in place in the event that you face extreme weather you can face a number of consequences including damage to properties and machinery as well as paying financial penalties for not finishing a job on time. A careful and experienced review of your insurance requirements and policy documentation at the outset can help save you time, money and legal hassles later.

Landlords often set policies for tenants. These policies are often in place to help reduce issues between tenants, which can be a tricky balancing act. A tenant may also be required to follow any policies to reduce difficulties as a resident. One common policy that many landlords put in place is a pet policy. Landlords may limit tenants from having pets. Why would they do that? Here’s what you should know: REDUCE NOISE COMPLAINTS Many pets can be noisy, dogs especially. Dogs will often bark at every unknown noise they hear. That could mean that a dog barks at another tenant walking down a hallway. Constant barking can create issues with other tenants. This can be especially troublesome if a tenant’s dog frequently barks at night. REDUCE PET SMELL Many animals leave behind unfavorable smells after a tenant moves out. Cat urine is a very difficult smell to get out of carpets. Landlords don’t always know how clean tenants can be and tenants can’t always control where animals do their business. Reducing pets can reduce these unwanted smells. REDUCE LIABILITY FOR ANIMAL ATTACKS Landlords can’t always expect tenant’s animals to be well-behaved or trained. If a tenant loses control of their animal, then another tenant’s health could be at risk — and there’s always a possibility that the landlord might be held partially responsible for allowing the animal on the premises. ENFORCING PET POLICIES Landlords may allow tenants to have pets. Tenants may only be allowed one to two pets and may be expected to pay one-time or regular pet fees. These fees can be useful for tenants if there happen to be issues or accidents to their properties caused by pets. Some tenants will disregard their renters’ agreements and bring a new pet into a property against their landlord’s knowledge. When this happens, landlords may take legal action against their tenants.

Landlords often set policies for tenants. These policies are often in place to help reduce issues between tenants, which can be a tricky balancing act. A tenant may also be required to follow any policies to reduce difficulties as a resident. One common policy that many landlords put in place is a pet policy. Landlords may limit tenants from having pets. Why would they do that? Here’s what you should know: REDUCE NOISE COMPLAINTS Many pets can be noisy, dogs especially. Dogs will often bark at every unknown noise they hear. That could mean that a dog barks at another tenant walking down a hallway. Constant barking can create issues with other tenants. This can be especially troublesome if a tenant’s dog frequently barks at night. REDUCE PET SMELL Many animals leave behind unfavorable smells after a tenant moves out. Cat urine is a very difficult smell to get out of carpets. Landlords don’t always know how clean tenants can be and tenants can’t always control where animals do their business. Reducing pets can reduce these unwanted smells. REDUCE LIABILITY FOR ANIMAL ATTACKS Landlords can’t always expect tenant’s animals to be well-behaved or trained. If a tenant loses control of their animal, then another tenant’s health could be at risk — and there’s always a possibility that the landlord might be held partially responsible for allowing the animal on the premises. ENFORCING PET POLICIES Landlords may allow tenants to have pets. Tenants may only be allowed one to two pets and may be expected to pay one-time or regular pet fees. These fees can be useful for tenants if there happen to be issues or accidents to their properties caused by pets. Some tenants will disregard their renters’ agreements and bring a new pet into a property against their landlord’s knowledge. When this happens, landlords may take legal action against their tenants.

You can earn a lucrative income in the real estate development industry, but most people who gravitate towards this career do so because they enjoy making deals or because they enjoy creating. That means they are prepared to take bold risks in all aspects of property development. Some business risks are to be expected, but you should never gamble on your good standing as a conscientious, law-abiding businessperson. Instead, look for ways to lower legal risks across all your real estate development projects. BUILD A TEAM Property development is a job best shared among industry professionals. While you remain in control of your development business, guidance and advice from others can minimize your legal risks and help your enterprise grow. Consider bringing in professionals like these: Financial advisor Real estate consultant Civil engineer Land surveyor Architect Environmental consultant Adding a legal representative experienced in real estate law to your team can also help you lower your risks as a real estate developer. USE TAILORED CONTRACTS A real estate development project means entering into contracts with several different parties. Instead of relying on one document for all your agreements, have them drafted for individual situations. Examples to consider are: Lender contracts Consultant agreements Construction contracts Of course, all purchase or sales contracts benefit from customization to protect your interests and prevent legal issues. KNOW THE LAW An ideal way to lower your risk and protect your company is to know what you can and cannot do under California law. For example, even a simple violation of California zoning regulations can cause problems for your operations. You can perform the necessary research yourself or partner with a legal representative sensitive to the issues property developers face. The latter helps ensure that your business practices remain lawful across all of your projects.

You can earn a lucrative income in the real estate development industry, but most people who gravitate towards this career do so because they enjoy making deals or because they enjoy creating. That means they are prepared to take bold risks in all aspects of property development. Some business risks are to be expected, but you should never gamble on your good standing as a conscientious, law-abiding businessperson. Instead, look for ways to lower legal risks across all your real estate development projects. BUILD A TEAM Property development is a job best shared among industry professionals. While you remain in control of your development business, guidance and advice from others can minimize your legal risks and help your enterprise grow. Consider bringing in professionals like these: Financial advisor Real estate consultant Civil engineer Land surveyor Architect Environmental consultant Adding a legal representative experienced in real estate law to your team can also help you lower your risks as a real estate developer. USE TAILORED CONTRACTS A real estate development project means entering into contracts with several different parties. Instead of relying on one document for all your agreements, have them drafted for individual situations. Examples to consider are: Lender contracts Consultant agreements Construction contracts Of course, all purchase or sales contracts benefit from customization to protect your interests and prevent legal issues. KNOW THE LAW An ideal way to lower your risk and protect your company is to know what you can and cannot do under California law. For example, even a simple violation of California zoning regulations can cause problems for your operations. You can perform the necessary research yourself or partner with a legal representative sensitive to the issues property developers face. The latter helps ensure that your business practices remain lawful across all of your projects.

Even the surest business venture comes with unforeseeable risks. Disruption in the supply chain might leave production facilities idle for months and push a company to the brink of insolvency. A few poor hiring choices could lead to a substantial drop in quality and expensive product liability claims could lead to the closure of the company. Creditors, employees and unhappy clients could all pursue expensive lawsuits against a company. Yet, entrepreneurs and investors do not have to blindly accept risk simply because they want to run a business. They can proactively address known risk factors to limit their exposure. They can also purchase insurance. Numerous types of insurance are available to help organizations limit their risk. 1. GENERAL LIABILITY COVERAGE Any time someone gets hurt or there is an incident that causes property damage, a business could be at risk of a lawsuit. General liability coverage is a great starting point for protecting the organization and its leadership from injury claims. 2. PREMISES LIABILITY COVERAGE Any business with a physical location that employees or members of the public visit could end up subject to claims when people get hurt at that property. Premises liability coverage is an important addition to a general business policy for most organizations with offices or retail spaces open to the public. 3. PRODUCT LIABILITY COVERAGE Any company producing products either for retail sale or used by other businesses will have the risk of product failures causing injury or property damage. Product liability coverage helps protect businesses against financial claims if one of their products causes a fighter or electrocutes someone. 4. ERRORS AND OMISSIONS COVERAGE Businesses that provide professional services may need to carry insurance that protects them against mistakes when working with clients that would be comparable in many ways to product liability coverage for businesses that sell goods. Lawyers, doctors and similar professionals may need to carry specialized malpractice coverage. 5. BUSINESS INTERRUPTION INSURANCE Any organization with substantial facility expenses or multiple staff members may need to consider investing in business Interruption coverage. Such insurance can cover rent and even staffing expenses when a business cannot operate due to extenuating circumstances, like a natural disaster. Organizations that carry appropriate kinds of insurance can benefit from the knowledge that their daily operations have invested in protection from the uncertainties of an ever-shifting market and legal climate. Learning more about business insurance and securing the right coverage with the assistance of an experienced legal professional can help entrepreneurs and business owners who are worried about liability risks.

Even the surest business venture comes with unforeseeable risks. Disruption in the supply chain might leave production facilities idle for months and push a company to the brink of insolvency. A few poor hiring choices could lead to a substantial drop in quality and expensive product liability claims could lead to the closure of the company. Creditors, employees and unhappy clients could all pursue expensive lawsuits against a company. Yet, entrepreneurs and investors do not have to blindly accept risk simply because they want to run a business. They can proactively address known risk factors to limit their exposure. They can also purchase insurance. Numerous types of insurance are available to help organizations limit their risk. 1. GENERAL LIABILITY COVERAGE Any time someone gets hurt or there is an incident that causes property damage, a business could be at risk of a lawsuit. General liability coverage is a great starting point for protecting the organization and its leadership from injury claims. 2. PREMISES LIABILITY COVERAGE Any business with a physical location that employees or members of the public visit could end up subject to claims when people get hurt at that property. Premises liability coverage is an important addition to a general business policy for most organizations with offices or retail spaces open to the public. 3. PRODUCT LIABILITY COVERAGE Any company producing products either for retail sale or used by other businesses will have the risk of product failures causing injury or property damage. Product liability coverage helps protect businesses against financial claims if one of their products causes a fighter or electrocutes someone. 4. ERRORS AND OMISSIONS COVERAGE Businesses that provide professional services may need to carry insurance that protects them against mistakes when working with clients that would be comparable in many ways to product liability coverage for businesses that sell goods. Lawyers, doctors and similar professionals may need to carry specialized malpractice coverage. 5. BUSINESS INTERRUPTION INSURANCE Any organization with substantial facility expenses or multiple staff members may need to consider investing in business Interruption coverage. Such insurance can cover rent and even staffing expenses when a business cannot operate due to extenuating circumstances, like a natural disaster. Organizations that carry appropriate kinds of insurance can benefit from the knowledge that their daily operations have invested in protection from the uncertainties of an ever-shifting market and legal climate. Learning more about business insurance and securing the right coverage with the assistance of an experienced legal professional can help entrepreneurs and business owners who are worried about liability risks.

It’s exciting to start your own business – whether it’s something that you’ve been planning for ages or something that happened after a sudden spark of inspiration. However, operating your own business does carry some potential risks. You can end up in a legal dispute with an unhappy customer, fighting over a contract obligation with a supplier or distributor and more. This is why every entrepreneur needs to consider the different types of business insurance they need to mitigate their potential liabilities. What insurance is most important for your small business? Every situation is a little different, so exactly what you need may depend partially on the type of business you’re operating. A home kitchen, for example, may have vastly different insurance needs than a website design consulting firm. Just the same, here are some insurances that may be the most important for everyone: General liability policies: This is the kind of insurance that you need if your customer claims that they fell over the unsecured doormat inside your store or your competitor alleges that you stole their product. Key person insurance: Are you launching your business with a partner or two? What happens to the business if one of you suddenly dies or disappears? You can give potential investors some security through key person insurance. This offers a safety net that can help you stay afloat. Business income insurance: Everything from a natural disaster to social upheaval can cause an interruption in your normal operations. Most small businesses simply cannot afford to be closed for even a few days – let alone weeks or months. This kind of insurance can provide some necessary relief. It’s good to remember that some insurance policies don’t just provide a check – they also provide defense services if you’re facing a lawsuit. That’s an additional value, since it means you don’t have to handle things yourself while still trying to keep up your operations. Like many other start-ups, you’re probably operating on a thin budget – so you want to stretch your dollars the furthest. That means making careful choices about your risk management strategies. Experienced legal guidance can often make it easier to understand where your biggest liabilities lie. It can also help you make sure you negotiate the right insurance coverage.

It’s exciting to start your own business – whether it’s something that you’ve been planning for ages or something that happened after a sudden spark of inspiration. However, operating your own business does carry some potential risks. You can end up in a legal dispute with an unhappy customer, fighting over a contract obligation with a supplier or distributor and more. This is why every entrepreneur needs to consider the different types of business insurance they need to mitigate their potential liabilities. What insurance is most important for your small business? Every situation is a little different, so exactly what you need may depend partially on the type of business you’re operating. A home kitchen, for example, may have vastly different insurance needs than a website design consulting firm. Just the same, here are some insurances that may be the most important for everyone: General liability policies: This is the kind of insurance that you need if your customer claims that they fell over the unsecured doormat inside your store or your competitor alleges that you stole their product. Key person insurance: Are you launching your business with a partner or two? What happens to the business if one of you suddenly dies or disappears? You can give potential investors some security through key person insurance. This offers a safety net that can help you stay afloat. Business income insurance: Everything from a natural disaster to social upheaval can cause an interruption in your normal operations. Most small businesses simply cannot afford to be closed for even a few days – let alone weeks or months. This kind of insurance can provide some necessary relief. It’s good to remember that some insurance policies don’t just provide a check – they also provide defense services if you’re facing a lawsuit. That’s an additional value, since it means you don’t have to handle things yourself while still trying to keep up your operations. Like many other start-ups, you’re probably operating on a thin budget – so you want to stretch your dollars the furthest. That means making careful choices about your risk management strategies. Experienced legal guidance can often make it easier to understand where your biggest liabilities lie. It can also help you make sure you negotiate the right insurance coverage.