Legal Advice Blog: Legal Advice, Case Insights, & Local Law Information

In a prior post, we highlighted the notion of “what’s old is new again” as a redevelopment plan in Los Angeles’ theatre district has revitalized that section of the city. However, making old new again may not be enough to accommodate the growing number of residents and transplants to the city. According to an estimate by UCLA’s Ziman Center for Real Estate, an estimated 300,000 people will move to the region in the next few decades. This has caused a new discussion over upzoning; the process and practice of changing the zoning rules in a particular area to accommodate higher population density. Upzoning typically involves zoning changes from strict residential use to mixed use (i.e. combinations of retail, office and residential use). Given the popularity of mixed use properties, and the burgeoning need for new housing, upzoning appears to be a good idea that would garner wide support. However, this support may not be universally shared. After all, higher population density may not be desired by everyone; especially those who have grown accustomed to having smaller numbers of neighbors. This presents a problem given how upzoning commonly occurs in areas with smaller shares of single family homes. More people commonly means more traffic, and a much more difficult time getting around. For those who already loathe traffic, upzoning would not be a welcome sight. As such, developers who have development plans that require upzoning could benefit from experienced real estate attorneys who understand the legal and political issues, as well as the environmental concerns that come with a project.

In a number of our posts, we have highlighted how the commercial real estate industry has shown signs of optimism, both in the construction of new facilities and the creation of mixed use facilities that incorporate retail, office and residential living spaces. Given this prospective, it would seem that any new mixed use project would be successful, but that simply is not the case. Indeed, developers and investors alike must consider several factors before moving forward with a proposed development. This post will highlight a few of them. Consider the retailer – The type of retailer is important in considering the development. The location must be conducive to the retailer needs and what residents expect in the retailer. For example, it residents expect a Starbucks to be close to where they live, but not necessarily a Sam’s Club. What type of traffic is expected – When the location is conducive to foot traffic, as opposed to vehicular traffic, smaller, boutique like retailers should be considered as tenants. Conversely, when customers will primarily be coming by car, a larger retailer could be considered. The type of community – The retailers included in a development must reflect the overall spending habits and culture of the community the retailers will serve. Essentially the retailers must be unique enough to offer a distinguishable shopping experience, but popular enough to attract a large clientele. Even in light of these factors, having the guidance of an experienced real estate attorney to create language within various agreements to protect your legal interests is critical to the success of such a project.

In a number of our posts, we have highlighted how the commercial real estate industry has shown signs of optimism, both in the construction of new facilities and the creation of mixed use facilities that incorporate retail, office and residential living spaces. Given this prospective, it would seem that any new mixed use project would be successful, but that simply is not the case. Indeed, developers and investors alike must consider several factors before moving forward with a proposed development. This post will highlight a few of them. Consider the retailer – The type of retailer is important in considering the development. The location must be conducive to the retailer needs and what residents expect in the retailer. For example, it residents expect a Starbucks to be close to where they live, but not necessarily a Sam’s Club. What type of traffic is expected – When the location is conducive to foot traffic, as opposed to vehicular traffic, smaller, boutique like retailers should be considered as tenants. Conversely, when customers will primarily be coming by car, a larger retailer could be considered. The type of community – The retailers included in a development must reflect the overall spending habits and culture of the community the retailers will serve. Essentially the retailers must be unique enough to offer a distinguishable shopping experience, but popular enough to attract a large clientele. Even in light of these factors, having the guidance of an experienced real estate attorney to create language within various agreements to protect your legal interests is critical to the success of such a project.

As we noted in our last post, the demand for multifamily residential housing is expected to continue through the next few years. However, open spaces in Los Angeles to construct such buildings is becoming increasingly difficult to come by. According to a recent globest.com report, there are only a few open spaces left, so many new projects are conceived to fit specific guidelines that have been instrumental for growth in urban metro areas. For instance, in Charlotte, North Carolina; Houston, Texas; Denver, Colorado and San Jose, California, new multifamily projects have been built on or near areas that exhibit these characteristics. This post will highlight them. Proximity to attractions – New developments in each of the cities mentioned were built in close proximity to attractive retail and entertainment venues. These included new outdoor shopping centers (as opposed to malls), movie theaters and restaurants. Easy access to major roadways – While the developments were not located on major thoroughfares, residents had easy access to freeways and expressways that would enable them to reach major employment centers in a reasonable amount of time. Driving distance to universities – In the same vein, successful new developments have been built in areas that provide easy access to university learning centers. Indeed, this has not caused a spike in new university housing, but it reflects a response to meet the need of millenials who are working towards degrees while working full time. As we have noted in a number of our posts, the keys to being successful in real estate are anticipating trends and meeting demand. A skilled real estate attorney can help investors develop projects that do just that.

As we noted in our last post, the demand for multifamily residential housing is expected to continue through the next few years. However, open spaces in Los Angeles to construct such buildings is becoming increasingly difficult to come by. According to a recent globest.com report, there are only a few open spaces left, so many new projects are conceived to fit specific guidelines that have been instrumental for growth in urban metro areas. For instance, in Charlotte, North Carolina; Houston, Texas; Denver, Colorado and San Jose, California, new multifamily projects have been built on or near areas that exhibit these characteristics. This post will highlight them. Proximity to attractions – New developments in each of the cities mentioned were built in close proximity to attractive retail and entertainment venues. These included new outdoor shopping centers (as opposed to malls), movie theaters and restaurants. Easy access to major roadways – While the developments were not located on major thoroughfares, residents had easy access to freeways and expressways that would enable them to reach major employment centers in a reasonable amount of time. Driving distance to universities – In the same vein, successful new developments have been built in areas that provide easy access to university learning centers. Indeed, this has not caused a spike in new university housing, but it reflects a response to meet the need of millenials who are working towards degrees while working full time. As we have noted in a number of our posts, the keys to being successful in real estate are anticipating trends and meeting demand. A skilled real estate attorney can help investors develop projects that do just that.

With the advancements in educational technology, it is common for colleges and universities to offer courses online rather than having students live on campus or commute to classes. Because of this, many institutions save money by minimizing their physical presence. This is the situation in which California’s Claremont School of Theology finds itself. However, the sale of institutional property is not always easy, and the school is currently embroiled in a real estate dispute with its affiliate, the Claremont Consortium. The Consortium sold the property to the seminary in 1957, but the deed included a provision that gave the Consortium first options for repurchasing the land. If the seminary ever decided to sell the property, it would be sold back to the Consortium at fair market value or using a formula that calculated taxes and depreciation. However, when the Consortium made its offer of $12.7 million for land the seminary valued at over $25 million, the seminary objected. According to the Consortium, its final offer of $14 million, which was also rejected by the seminary, was $10 million above the stipulation in the deed. While the seminary believes the deed’s provision for calculating the land value expired in 1987, the Consortium says it was renewed in 2001. Both sides claim they are acting in good faith, but negotiations broke down quickly. The seminary recently filed suit against the Consortium. The solution to their real estate dispute seems to hinge on the validity of a single clause in the original deed. If a California court finds that the clause is still valid, the seminary may have no choice but to accept the offer from the Consortium. However, even if the dispute is resolved, it is possible that the relationship between the two institutions may be irreparably damaged. Source: dailybulletin.com, “ Seminary sues Claremont Colleges over disputed land deal “, Lisa Marquez, Sept. 18, 2016

With the advancements in educational technology, it is common for colleges and universities to offer courses online rather than having students live on campus or commute to classes. Because of this, many institutions save money by minimizing their physical presence. This is the situation in which California’s Claremont School of Theology finds itself. However, the sale of institutional property is not always easy, and the school is currently embroiled in a real estate dispute with its affiliate, the Claremont Consortium. The Consortium sold the property to the seminary in 1957, but the deed included a provision that gave the Consortium first options for repurchasing the land. If the seminary ever decided to sell the property, it would be sold back to the Consortium at fair market value or using a formula that calculated taxes and depreciation. However, when the Consortium made its offer of $12.7 million for land the seminary valued at over $25 million, the seminary objected. According to the Consortium, its final offer of $14 million, which was also rejected by the seminary, was $10 million above the stipulation in the deed. While the seminary believes the deed’s provision for calculating the land value expired in 1987, the Consortium says it was renewed in 2001. Both sides claim they are acting in good faith, but negotiations broke down quickly. The seminary recently filed suit against the Consortium. The solution to their real estate dispute seems to hinge on the validity of a single clause in the original deed. If a California court finds that the clause is still valid, the seminary may have no choice but to accept the offer from the Consortium. However, even if the dispute is resolved, it is possible that the relationship between the two institutions may be irreparably damaged. Source: dailybulletin.com, “ Seminary sues Claremont Colleges over disputed land deal “, Lisa Marquez, Sept. 18, 2016

In our prior posts, we have noted how the near future is bright for construction of commercial projects in Southern California. Cheap money, job growth and population growth are all substantial drivers of this growth. But for investors and developers, the principal question is where to find appropriate deals. Indeed, there are many venues to consider for different needs. However, there are two that are drawing careful consideration from developers and investors. This post will highlight two popular cities. Long Beach – According to many real estate professionals, Long Beach is ripe with properties that are virtually bargains compared to other cities around the region. Additionally, it has many of the amenities that millenials and potential office tenants are looking for, including prime outdoor and indoor spaces, walkable amenities and proximity to the Pacific Ocean. With such favorable price points and new leadership committed to redevelopment, Long Beach is poised for a renaissance. Burbank – Like Long Beach, Burbank is working diligently to court millenials, as city leaders believe that this age group is the driver of economic growth. Burbank is home to more than 1000 entertainment related companies, making it the area with the highest concentration of such companies in Los Angeles County. Burbank is also going to be home to the largest IKEA in the United States, and several other high profile companies are building offices in the area, including Tesla Motors. The emerging opportunities call for the guidance of an experienced real estate attorney. If you have questions about how to protect your interests in the midst of a new development, we can help.

In our prior posts, we have noted how the near future is bright for construction of commercial projects in Southern California. Cheap money, job growth and population growth are all substantial drivers of this growth. But for investors and developers, the principal question is where to find appropriate deals. Indeed, there are many venues to consider for different needs. However, there are two that are drawing careful consideration from developers and investors. This post will highlight two popular cities. Long Beach – According to many real estate professionals, Long Beach is ripe with properties that are virtually bargains compared to other cities around the region. Additionally, it has many of the amenities that millenials and potential office tenants are looking for, including prime outdoor and indoor spaces, walkable amenities and proximity to the Pacific Ocean. With such favorable price points and new leadership committed to redevelopment, Long Beach is poised for a renaissance. Burbank – Like Long Beach, Burbank is working diligently to court millenials, as city leaders believe that this age group is the driver of economic growth. Burbank is home to more than 1000 entertainment related companies, making it the area with the highest concentration of such companies in Los Angeles County. Burbank is also going to be home to the largest IKEA in the United States, and several other high profile companies are building offices in the area, including Tesla Motors. The emerging opportunities call for the guidance of an experienced real estate attorney. If you have questions about how to protect your interests in the midst of a new development, we can help.

Investing in real estate is reputable for being profitable. Investors have a vast range of options, and one of them is commercial real estate (CRE), which is gaining a lot of attention as time goes by. This is because it has a higher income yield and low maintenance costs. However, you should consider crucial aspects when investing in CRE, including the property type. Here is what you should know about this factor. Decide a property type CRE includes offices, retail, industrial and multifamily units. With offices, you will rent office spaces to businesses like law and accounting firms. These are the typical corporate-style workspaces. Retail CRE is for retail purposes. Thus, your clients will be shopping centers, restaurants, coffee shops and healthcare facilities. With industrial spaces, you will rent to companies with heavy processes, such as manufacturing, storage (warehouses), assembly and production. Lastly, multifamily CRE defines the larger residential complexes with many units. They are for residential purposes but generate high rental income, hence commercial properties. You should know which property type to invest in to make your work more manageable. It can be challenging to look at all types, and the market can have hundreds of each. Thus, consider the pros and cons of each and choose a type you can manage. Decide occupied or empty When investing in CRE, you can purchase a building that’s already occupied or an empty one, in which you will market to find tenants. Further, you can buy land and build the property. It will be best to know which one you want from the beginning to make informed decisions. The property type you invest in is crucial. You should obtain adequate information about the industry to make the right moves.

Investing in real estate is reputable for being profitable. Investors have a vast range of options, and one of them is commercial real estate (CRE), which is gaining a lot of attention as time goes by. This is because it has a higher income yield and low maintenance costs. However, you should consider crucial aspects when investing in CRE, including the property type. Here is what you should know about this factor. Decide a property type CRE includes offices, retail, industrial and multifamily units. With offices, you will rent office spaces to businesses like law and accounting firms. These are the typical corporate-style workspaces. Retail CRE is for retail purposes. Thus, your clients will be shopping centers, restaurants, coffee shops and healthcare facilities. With industrial spaces, you will rent to companies with heavy processes, such as manufacturing, storage (warehouses), assembly and production. Lastly, multifamily CRE defines the larger residential complexes with many units. They are for residential purposes but generate high rental income, hence commercial properties. You should know which property type to invest in to make your work more manageable. It can be challenging to look at all types, and the market can have hundreds of each. Thus, consider the pros and cons of each and choose a type you can manage. Decide occupied or empty When investing in CRE, you can purchase a building that’s already occupied or an empty one, in which you will market to find tenants. Further, you can buy land and build the property. It will be best to know which one you want from the beginning to make informed decisions. The property type you invest in is crucial. You should obtain adequate information about the industry to make the right moves.

Our last few posts have focused on the state of the market and the growing opportunities with regard to commercial real estate and office locations. However, it is important for real estate investors and financiers to recognize the trends that could shape real estate development in the near future. Essentially, a recent globest.com article highlighted three related trends. We will describe what they are and how they may influence future projects. Generation specific housing – It’s no secret that the number of people reaching age 65 are growing each month. With that, the number of senior housing and assisted living facilities has to grow as well. Because of this, securing financing for these projects has become a critical aspect of development. Co-urbanism – Real estate development is changing with the changing population needs. This means that more multiuse projects that enable retail, office and living spaces to be in close proximity to each other have become important as working and shopping experiences continue to change. Cyber risk – With more developments touting intelligent technological benefits, including smart grids and automated retail operations, it is essential that these buildings be protected from cyber attacks. Ransomware and other attacks geared towards seizing private information cannot be ignored, and developers must include plans for cyber risk management. Indeed, the guidance and advice from experienced legal counsel can be very helpful as developers secure financing for future projects. But knowing how these three trends may shape future projects can give developers a better opportunity for success. The preceding is not legal advice.