A real estate brokerage in California recently completed a property portfolio sale and leaseback. The transaction took place in Rancho Cucamonga and Carteret, less than an hour from Los Angeles. With these types of transactions, property owners may sell their commercial real estate assets for quick capital and then do commercial leases with these assets, essentially leasing them back from the buyers.

In the recent sale and leaseback, the company CBRE purchased an industrial portfolio featuring three properties. The company said the transaction was complex and highly coordinated, considering the short time frame with which it had to work. The three properties total more than 139,000 square feet.

According to CBRE, the solid interest in this offering proves that the demand for these types of industrial investments is robust in submarkets that serve Los Angeles and other similar gateway cities. The three-property portfolio is currently fully leased to a manufacturer of seafood products. The manufacturer specializes in providing products that are crab flavored to food service clients. The specific financial terms of the complex were not divulged.

Dealing with commercial leases can be both exciting and intimidating in the competitive real estate markets of Los Angeles and surrounding areas. In the same way, buying and selling real estate can be complicated, with one mistake having the potential to cost a buyer or seller money, time or the deal itself. An attorney in California can help with these types of transactions to make sure that one’s rights are protected with each step.

Source: njbiz.com, “CBRE completes purchase in Carteret, California“, Mario Marroquin, Sept. 7, 2017

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Nowadays, there is a push among the owners of office buildings and real estate developers to bridge the gap between urban life and suburban life. With this comes a new concept known as urb-suburban. By embracing this vibe, real estate investors in Los Angeles who are interested in offering commercial leases may experience levels of success they have never seen before.

The concept of urb-suburban describes the mixture of suburban offices in settings that are walkable and offer easy access to the types of amenities often seen in urban settings. These amenities include the likes of retail, restaurants, transit and housing. Industry experts said that developers and owners who do not embrace this concept may find it more difficult to justify brand-new projects or attract brand-new tenants.

An example of a submarket that provides many urb-suburban attributes in California is Santa Monica, a suburb of Los Angeles. Yet another one in California is the San Francisco Bay Area suburb known as Palo Alto. In another state, an established submarket is the New Jersey Hudson River waterfront.

Figuring out whether to focus on the urban setting, the suburban setting or both when offering commercial leases can be tricky. This is especially true in dynamic California, where the real estate industry continues to be bustling. However, another common challenge among investors is figuring out how to navigate their commercial real estate deals; after all, every deal is different. An attorney in Los Angeles can help to ensure that one’s unique goals are accomplished in each deal in the Golden State.

Source: nreionline.com, “Do Office Tenants Prefer the City or the Suburbs?“, John Egan, Aug. 16, 2017

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When purchasing, leasing or renting California property, it is essential to understand how any potential easement could impact your ability to use the property as you wish. Easements are a complex area of real estate law, and disputes can quickly end up in litigation when out-of-court settlements are not possible. Easements can affect both residential and commercial properties.

If you have an easement, it simply means that you have a legal interest in another party’s property without possessing the property. An easement grants only limited rights, such as the right to walk or drive through privately owned property to get to a public place. Whether you have easement rights or you wish to understand if an easement could affect a property you wish to buy, you would be wise to understand the two main types: express and implied.

The two main types of easements

When it comes to fully understanding your right to use a piece of property or determining if you can get rid of an easement, it must be clear if the easement in question is express or implied. The differences between the two are as follows:

• Implied easement: An implied easement is one understood or implied by the specific circumstances of the situation. These types of easements must be reasonably necessary, and there must be a division of the original parcel of land. Additionally, the use of the easement must have existed prior to the division or selling of subdivided pieces of the original property.
• Express easement: An express easement is one created by a will or a deed that passes ownership to another party. These are in writing, and the easement continues even after ownership changes hands.

An easement does not, however, give a person the right to use another person’s property in a disruptive or inappropriate way. Property owners with concerns about the well-being of their assets and the preservation of their land would be wise to address these concerns and any disputes as quickly as possible.

Navigating real estate disputes

Real estate disputes can be costly and difficult to navigate. If an easement is causing you concern, affecting your right to use property in a certain way or impacting the sale of a piece of property, you could benefit from experienced guidance and legal support.

These matters can impact both your personal rights and your financial well-being. You have the right to fully understand any implied or express easement that affects you, as well as how to effectively resolve any dispute impacting your property rights.

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Real estate in the Los Angeles area has been strong in past years and continues to be robust in 2017. One particular aspect of the commercial real estate market is logistics buildings. Thus, real estate investors interested in offering commercial leases may find a wellspring of opportunity in the City of Angels.

The Inland Empire area of Southern California features top-quality logistics buildings that experienced a rent jump of 4.7 percent year over year earlier this year. However, the Los Angeles market saw a jump of a whopping 9.2 percent. This information comes from CBRE, a commercial real estate investment firm.

With its 9.2 percent jump, Los Angeles was listed as being in sixth place worldwide when it came to rent increases for prime logistics properties during 2017’s first quarter.  Meanwhile, the Inland Empire area of the state ranked 21st. In addition, the rent per square feet per year in Los Angeles was $8.52, much higher than that for the Inland Empire area at $5.40.

Part of the reason the demand for logistics centers is increasing is because electronic commerce operators need about triple the space that the users of traditional warehouses need, mostly because of how their items are packaged as well as how quantity of goods they handle. In light of this, these types of buildings may be worthwhile investments in today’s real estate climate for those interested in providing commercial leases. An attorney in Los Angeles can offer guidance during even the most complex of deals to ensure that one’s real estate goals are ultimately achieved in the Golden State.

Source: pe.com, “Why Inland area remains top bargain for logistics centers“, Richard Deatley, Aug. 8, 2017

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A retail property in the Los Angeles area recently sold for a whopping $22 million. The property was sold to a Los Angeles buyer, who was not immediately identified. Known as The Gardens, this retail property offers many opportunities for commercial leases.

CBRE ended up brokering the sale of the retail property. This particular property is more than 96 percent occupied and is near a casino and regional hospital. AU Zone Investments #2 LP was the seller, who reportedly sold the property because its portfolio includes heavy investments in retail, and it wanted to diversify its portfolio by branching out to other types of real estate assets.

Officials with CBRE said that the fact that the property is located in a relatively busy area with excellent demographics is a huge plus. The area not only features high traffic but also has a strong mixture of both regional and national tenants. Businesses that are currently tenants at The Gardens include Subway, 99 Cents Only and Wing Stop.

Investors who are interested in buying properties and offering commercial leases may find some promising opportunities in the bustling Los Angeles area. However, even though the purchase of The Gardens appears to have gone relatively smoothly, not all commercial real estate transactions are as easy to navigate. Even in the seemingly easy ones, a single mistake can end up being costly in a major way financially. A qualified attorney can help with commercial real estate deals featuring a wide range of complexity levels to ensure that one’s ultimate goals are achieved in today’s real estate industry.

Source: bisnow.com, “This Week’s LA Deal Sheet“, Karen Jordan, Aug. 15, 2017

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The state of California has the sixth-biggest economy in the world, with its gross domestic product being $2.5 million. The state’s economy grew by more than 3 percent back in 2016, more than two times the 1.5 percent growth that the nation as a whole experienced, and more than any other state’s growth rate. Owning real estate, which may also include offering commercial leases, is one area that is particularly hot right now economically in Los Angeles and other parts of California.

There are four commercial real estate sectors in California, all of which currently have varying outlooks. Right now, retail space is expected to see little net growth, if any. In fact, many retail properties may end up being redeveloped into mixed-use projects or enclosed shopping malls. Just like retail space, office space — the second commercial real estate sector — may not see much growth due to the abundance of these types of spaces at the moment.

The third sector is the industrial sector, which has been drawing increasing attention since e-commerce requires modern distribution building. As a result, new construction has taken place, but existing urban industrial properties have also been redeveloped to be able to accommodate better and higher uses. The fourth sector, special-use properties, is also drawing more attention; for instance, assisted-living facilities are growing in demand in light of today’s aging population.

When it comes to real estate, staying on top of the trends and being able to take advantage of buying and selling opportunities can be tricky. Even trickier may be the process of navigating a real estate deal when trying to buy or sell a property that can be used to provide commercial leases. An attorney in Los Angeles can help with each step of a commercial real estate deal to ensure that one’s wishes are met and rights are protected.

Source: uli.org, “Addressing California’s Greatest Real Estate Need“, Jan B. Brzeski, July 31, 2017

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Like other types of contracts, a commercial lease between oneself and a landlord may be negotiated. However, effective negotiation in Los Angeles starts with an understanding of the terms often included in commercial leases. These terms include destruction, enforcement and escalation clause.

An important clause to search for in a commercial lease is one that deals with destruction. This clause essentially makes it mandatory for a landlord to rebuild the property being leased if this property ends up being destroyed. The clause explains whether the tenant’s rate will end up being abated and if tenant has the option of terminating the lease in the event the building is either partially or totally destroyed.

Yet another aspect of a commercial lease to consider is enforcement. An enforcement clause specifies how the contract will be enforced. In addition, many businesses will negotiate into their leases a clause that requires all parties to resolve disputes that arise via arbitration or mediation.

Another important term to consider when dealing with leases is the escalation clause. This clause provides for rent increases during a specific amount of time. Tenants may benefit from ascertaining how exactly these increases are determined; for instance, they may be tied to a landlord’s operating costs or to an outside index.

Various types of commercial leases are available to those who need office or retail spaces as well as those who need space for manufacturing or other industrial uses. All of these types of leases can be challenging to work whether one is a potential tenant or a landlord. However, an attorney in Los Angeles can help with negotiating and drafting as well as reviewing these essential documents.

Source: findlaw.com, “Commercial Lease Provisons“, Accessed on Aug. 23, 2017

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The process of preparing for a complicated building project may be more intense than the construction itself. With countless unknowns, it is difficult to assess your risk and prepare for every contingency. Your contractors have the responsibility of ensuring they meet their obligations with as little negative impact as possible.

Unfortunately, many contractors you deal with may be facing a shortage of skilled and trained workers. This alone may increase the likelihood of defective workmanship. However, it is not the only factor for which you have to prepare.

Common construction defects

As California draws closer to the deadline for net-zero energy conservation, contractors should be applying more rigid standards to installing insulation. The newer high-efficiency exterior insulation requires more time and skill to install in conjunction with interior batt insulation. If done incorrectly, the results include higher energy use and more expense for you.

One of the most common and damaging results of construction defects is water intrusion. Whether it is poorly constructed roofs, windows, doors, exteriors or foundation, any source that allows water to enter your structure can result in mold, warping and rot. Water intrusion can come from any of the following:

• Insufficient flashing
• Poorly installed building wrap
• Improperly completed architectural plan
• Inappropriate choice of materials
• Inadequately trained laborers

These are only a few of the issues that may lead you to consider construction defect litigation. It is important to note that water intrusion is only one result of defective construction. You certainly would not want to take the risk of a poorly executed construction plan resulting in tragedy when an unsound structure collapses or fails to hold up under common California conditions, such as heavy rains or earthquakes.

How do I protect myself from risk?

You can make sure all the entities involved in your project carry the appropriate insurance to protect against construction issues that may arise. But how do you know if the certificates your contractors hold truly provide coverage? And how do you know if the coverage is adequate for the risk involved?

Seeking the advice of an attorney with years of experience reviewing and evaluating the insurance requirements for your project may help you avoid many of the negative consequences possible in a major construction project. Many builders and property owners find it is better to take these steps as early as possible rather than discover in the midst of a challenge that the risk is not covered.

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Those interested in commercial leases in Los Angeles may understandably be overwhelmed by the various types of terms of agreements available. Unfortunately, entering the wrong types of agreements for commercial leases can be financially devastating long term. Comparing the many options and the possible expenses, beyond just monthly rental amounts, is paramount.

One type of commercial lease is a fixed or flat lease, where a particular rent is established for a certain time period. A gross lease is another option for a small business owner. With this option, the tenant will pay a flat amount each month, and the landlord will pay for any building operating costs. In some situations, the tenant will also pay for air conditioning, electricity and heat. Such a lease typically features an escalation clause, which lets the landlord boost the rent each year to make up for increasing expenses.

A third lease option is a step lease. With such a lease, the rent rises by a particular amount each year during the agreement’s life. This increase is helpful for covering the expected expense increases that the landlord will incur. The increase, however, is based not on actual costs but on estimated costs.

With the many options for commercial leases available, an attorney can provide business owners with much-needed insight into potential lease agreements. Then, the attorney can negotiate leases on their behalf. The attorney’s ultimate goal is to ensure that a Los Angeles business owner’s best interests are represented at all stages of the process.

Source: Findlaw, “Types of Leases“, Accessed on July 13, 2017

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Even as real estate values in Los Angeles continue to skyrocket this year, the assessed value of property in Napa County has gone up. Specifically, the value has jumped by a whopping $2.4 billion for the tax year of 2017 to 2018. Those interested in investing in commercial properties and offering commercial leases in this part of California are certainly happy to hear this news.

The $2.4 billion increase is the biggest in Napa County history. In fact, the county’s value went up more in a single year than the total value of the county’s property was 37 years ago. Right now, the county’s property is valued at more than $37 billion, versus a little over $2.3 billion in 1980.

The roll for 2017 to 2018 was up nearly 7 percent, reflecting significant nonresidential construction as well as rising residential values. Nonresidential new construction, in particular, added nearly $240 million in assessed value. This is the third-biggest increase since the year of 1990.  All cities in Napa County showed assessed-value increases, with assessed values providing property tax revenue.

Those interested in purchasing commercial buildings and making commercial leases available to businesses in Los Angeles or other parts of the state of California, where property values are going strong, certainly have great potential for enjoying profits in the long run. However, navigating a transaction can be stressful and can end up being costly from a financial standpoint if not handled properly. An attorney can help ensure that one’s desires and best interests are upheld when engaged in real estate transactions in the Golden State.

Source: napavalleyregister.com, “Napa County’s property assessment roll soars to new heights“, July 18, 2017

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