In California, a development company called Stirling Development recently announced its execution of an industrial lease with the consumer goods company Newell Brands for a distribution center. The lease is for a space spanning 195,508 square feet. Industrial or commercial leases such as this one continue to be a promising area of real estate in Los Angeles and other parts of the Golden State.

The facility where the lease was recently executed with Newell Brands is 370,023 square feet in size and is located at an airport. This transportation hub includes a huge industrial and commercial complex. The facility ended up being finished ahead of schedule despite the excess rains that occurred this year and the large size of the building.

Newell Brands has actually been a tenant at the airport since 2007. However, with the recently executed lease, Newell Brands will now take up more than a million square feet at the airport. The benefit of such big-box leases in this area of California is that they are about 66 percent of the cost of the facilities found in other regional markets. This cost savings is attractive to distribution and manufacturing users.

Although the process of executing the lease with Newell Brands appears to have gone smoothly, not all situations involving industrial or commercial leases are without major hurdles. Before signing a lease, understanding all of the terms of the lease is paramount. An attorney in Los Angeles can help with reviewing a lease document as well as negotiating a lease to ensure that the potential lessee’s best interests are protected.

Source: inlandempire.us, “Newell Brands Leases 195,508 sf Industrial Space At Southern California Logistics Airport“, June 27, 2017

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In Southern California, there are currently several more buyers than there are sellers. As a result, sellers have the upper hand. This may be helpful information for Los Angeles investors who own commercial properties and offer commercial leases but might be interested in selling their properties.

Selling a commercial property can be tricky, and those trying to sell their properties may experience hurdles for a number of reasons. First, their buildings may be overpriced. It can be helpful to view recently closed sales and compare them with what is currently available on the market, checking for upward and downward trends. This is essential in determining the value of a building to be sold.

Another reason selling a commercial building in California may be difficult is that it is lacking an important amenity. For instance, logistics buildings that have low ceilings, or spaces with challenged loadings, may be challenging to move. Another potentially difficult-to-move property is a service depot that does not have a storage area in which to keep trucks outside. Use restrictions are another important consideration when selling commercial property, as a buyer may not be able to use one’s for-sale property in the way he or she needs it to be used.

Having realistic expectations is paramount when it comes time to sell a commercial building, including one offering commercial leases, in Los Angeles. An attorney can help with navigating each step of a commercial real estate deal so that one’s needs and desires are met. The attorney’s ultimate goal is to ensure that one’s rights are protected and that a personally favorable outcome is attained, considering the circumstances surrounding the deal.

Source: ocregister.com, “Commercial real estate: 5 reasons your building isn’t sold yet“, Allen Buchanan, July 22, 2017

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Virtually all commercial real estate markets, including those in Los Angeles, have sites that appear to remain vacant no matter the curb appeal or location quality. In fact, these sites may stay vacant for several years and eventually develop a stigma among real estate buyers. However, savvy investors in real estate investment partnerships may be able to turn these sites into profitable treasures.

A little statistically strong data and imagination are all that real estate investors need. For instance, real estate professionals can use geospatial analyses to facilitate urban gentrification and revitalization. Revitalization is possible by pinpointing successful businesses that can take up vacant spaces rather than dealing with the hassle and cost of new construction.

When aiming to revitalize a struggling site, examining the marketplace locally to determine what might be missing in the way of services or products is critical. However, in addition to deciding on what is missing, considering the demand for these products or services is also important. For instance, in some areas, pet supply shops, specialty food stores and frozen yogurt shops are simply not in high demand compared with other locales.

Entering a real estate investment partnership to embark on a commercial project can be a daunting process. However, an attorney can provide guidance with the acquisition of commercial real estate and the formation of real estate investment partnerships. The attorney can additionally help with addressing partnership disputes so that one’s personal goals and best interests are ultimately protected in the potentially promising Los Angeles real estate market.

Source: bizjournals.com, “How real estate professionals can revitalize a failed site“, Alexander Martonik, June 15, 2017

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Investing in commercial real estate development often comes with enormous risk. The many variables, such as weather, the availability of materials and labor issues, may make any investor lose sleep over a project. If you have invested previously in a commercial real estate project, you may already have experience with the things that could go wrong, particularly when dealing with developers.

The more you know about a developer and the way that developer works, the better you will be able to anticipate potential issues and plan for contingencies. The most common factors many investors look for in a developer are transparency, communication and effective cost control. These factors will likely influence the success of your deal.

What to look for

Your relationship with your developer is critical. However, developers work with many contractors and subcontractors, and you certainly don’t want to lose control of your project with all those hands in the pot. Before you invest in a commercial real estate project, knowing the answers to important questions about your developer and operators is one way to minimize your risk. Some factors you will certainly want to investigate include:

• Accountability: How will your developer keep you apprised of project schedules and spending? When and how will operators or developers notify you if your project experiences an emergency setback?
• Bidding: What process does your developer use for evaluating competitive bids from subcontractors and keeping you informed of the progression of those bids?
• Documentation: How does your developer maintain the many records, notes and forms necessary for a large project, and how does he or she keep those documents secure yet accessible to you?
• Foresight: What are the physical and financial plans for property maintenance and inspections for the future, for example, three to five years?

Business experts recommend contacting clients who are currently working with your contractors, not a list of past customers. This will give you a better idea of how the contractor is working now and if there are any factors that may interfere with the company’s ability to perform well for your project.

Seeking professional advice

Minimizing risk is key to any investment, and the best way to ensure your risk is low is to investigate the parties who will be included in the project. Additionally, having appropriate and adequate insurance coverage will provide you with security and peace of mind.

With the many factors and contingencies involved in large projects like commercial real estate development, having the advice of an experienced attorney will be invaluable. Your attorney can answer your risk management questions and advise you on any aspect of your investment project. Additionally, if you should face legal issues regarding your commercial real estate investment, you will have an advocate to represent your interests.

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Television production is making its way back to Los Angeles, and with that, many producers are looking for soundstage space. However, there appears to be a shortage of commercial leases for this type of space, as cable channels and streaming companies are shooting throughout the year to meet the demand of viewers. In fact, at some studios, occupancy levels have reached brand-new highs.

Based on industry insiders, this real estate space crunch stems from many factors. First, many producers are claiming Los Angeles as their home again to take full advantage of the state’s expanded tax incentives. Second, these producers are facing strong competition from Amazon, Netflix and Buzzfeed. These companies have signed long-term leases and are producing more original shows.

Another factor in the shortage of real estate is that new construction is lacking for studios. This is occurring because the land value in Los Angeles is continuing to skyrocket, so developers are not viewing soundstages, which span acres, as a good investment. New studio lots simply are not keeping up with the increase in demand.

In light of the high demand for soundstage space, now may be a beneficial time for producers to quickly pursue available commercial leases while they can still find them, and before the cost of renting goes up even more over time. However, the negotiation process can be challenging, especially in today’s competitive real estate environment in Los Angeles. An attorney can help with the negotiation process so that a business owner’s needs and interests are considered in a lease before the lease is signed.

Source: latimes.com, “TV production is soaring in L.A. But that means more competition for soundstages“, David Ng, June 6, 2017

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The southern part of California, including Los Angeles, features some of the most-coveted real estate in the nation. Areas near the ocean are seeing significant activity bursts among real estate developers interested in creating properties and offering commercial leases. Among the challenges they face is the demand for a limited amount of space.

In the city of Marina Del Rey, the developer AMLI is currently finishing the construction of more than 580 residential units as part of a development valued at $165 million. This development, which resembles a boathouse, features a retail component as well. Another in-demand area near Los Angeles is Huntington Beach, where a luxury unit development recently started taking tenants this year. These units are part of a hospitality and retail project that spans more than 30 acres.

Many of those buying into these areas are wealthy baby boomers who are interested in second homes and retirement homes. In addition, the areas around Venice and Santa Monica are attracting young professionals who are interested in participating in the booming startup environment. Because of the lack of space available in Southern California, many developers have resorted to creating mixed-use development proposals that mix residential units with entertainment and retail options.

Getting into the prime business spots in Southern California is possible through commercial leases. However, failure to understand how leases work may result in a business owner getting the raw end of the deal, so to speak. An attorney in California can help business owners to review potential leases and negotiate them in a manner that protects their best interests in the long run.

Source: latimes.com, “New real estate developments abound up and down the coast, but challenges persist“, Tiffany Hsu, June 10, 2017

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Southern California currently is in a seller’s commercial real estate market. This is largely due to the imbalance between supply and demand — or the available buildings versus businesses that are interested in expanding. This current trend impacts those involved with commercial leases in Los Angeles.

One reason for the imbalance that exists between supply and demand is the fact that there is not much new construction. Part of the reason for this lack of brand-new construction is the lack of land that is still undeveloped in the southern part of the state. Most of the new building that has taken place during the past few years involved razing existing yet obsolete buildings to create new buildings.

In addition, new construction is lacking simply because it is expensive. Land prices remain a major element to consider in new construction. In fact, in some cases, the price of land makes up half of the cost, particularly when old buildings have to be demolished. Furthermore, local counties and cities have stringent regulatory requirements that drag out the time it takes to erect new buildings.

For those interested in selling their commercial properties, now appears to be an ideal time due to the growing demand for them. In light of this, businesses that wish to grow and are thus looking for commercial leases must be aggressive in order to claim them in the current market. An attorney in Los Angeles can help with the process of negotiating leases in a manner that ultimately protects business owners’ best interests so that they can avoid making mistakes that will end up costing them financially down the road.

Source: ocregister.com, “A shortage of commercial real estate — Why?“, Allen Buchanan, June 10, 2017

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The world of construction is changing rapidly. Gone are the days of townspeople coming together to raise a building in a day. California building projects are increasingly demanding, and contractors face many challenges. Owners want their projects completed quickly and cost-effectively while contractors must be aware of local codes, environmental concerns and labor issues.

As a contractor, you understand how devastating to a project any setback can be. Whether it is a natural disaster, a shortage of supplies or change in idea direction, delays affect your reputation and your bottom line. A jobsite accident that leaves a worker injured is the worst-case scenario. Preparing for and avoiding these risks is crucial.

The changing face of risk management

More often, contractors like you bear the brunt of risk management responsibilities. You probably don’t need experts to tell you that the most urgent item on your list is completing the project on time. However, studies show that contractors are finding it harder to meet their deadlines because of a number of factors, including:

• Projects are becoming more complex.
• Changing margins may require you to adjust your business model.
• You are facing a shortage of skilled workforce.

Probably the most challenging roadblock to meeting deadlines is the shortage of labor, particularly in specialty trades such as masons, electricians and plumbers. Having a limited pool of workers may jeopardize your ability to complete projects on time, and, as you know, meeting deadlines is crucial.

Assuming and managing risks

While many project owners may want you to assume full risk management responsibilities, some experts believe that doing so may be good for your business. If you promote the fact that you are willing to take on complete risk management for projects, you may attract more business and more lucrative projects. However, in order to succeed at this, you will certainly need to have a thorough risk management program in place.

Without a doubt, your budget is tight, so risk management is essential for your business to be successful. You may benefit from having a legal advocate to work with you as you review contracts and determine the level of coverage necessary for your circumstances. An attorney with experience helping business owners with a wide range of insurance and risk management issues will provide you with assistance every step of the way.

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Purchasing a home can understandably be an exciting process for all parties involved, but fraudulent activity can quickly cast a dark cloud over this process. Specifically, mortgage fraud may occur, leading to real estate litigation. Those who are negatively impacted by mortgage fraud in Los Angeles, such as mortgage lenders and brokers, have the right to pursue justice through the civil court system.

Mortgage fraud refers to a variety of illegal schemes that involve misstatement or misrepresentation on mortgage documents. For instance, a home buyer or a mortgage broker might submit false W-2 forms. In addition, a real estate professional might obtain a property appraisal that is inflated.

Two chief types of mortgage fraud exist. One is called fraud for profit, where a real estate appraiser or a mortgage broker, for example, engage in fraudulent activity to extract funds from a transaction or property. The other type is called fraud for housing, which is where a home borrower provides inaccurate, false or incomplete information to qualify for a home loan or to enjoy more personally favorable terms when purchasing a house.

Those involved in mortgage fraud may be charged and end up being convicted in the criminal justice system. However, they might also be held financially responsible for the monetary damages that lenders incur as a result of the fraud. A civil claim filed with the help of an attorney in Los Angeles who focuses on real estate litigation might be based on deceit and/or misrepresentation, contractual theories, a breach of trust or conspiring to defraud a lender. Appraisers and mortgage brokers are third parties who may also be liable for monetary damages in a civil mortgage fraud lawsuit.

Source: findlaw.com, “Mortgage Fraud“, Accessed on May 15, 2017

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Throughout the United States, including in Los Angeles, lease rates for commercial properties are astonishing. When the market took a plunge during the Great Recession of 2008, the country lost between 40 and 50 percent of its values during in just six months to one year. Now, commercial leases are gaining steam.

Back in the recession days, many real estate experts wondered if the market for commercial property would recover at some point. Finally, an increase in sales prices was witnessed following changes to the country’s tax law in 2012. During the following three years of 2013 to 2015, selling prices immensely appreciated.

During this period, real estate experts expected commercial lease rates to go up, too. However, the increase in the rates is far greater than many imagined. The rates for Class A industrial leases started to approach a dollar per square foot by 2017. In addition, sales prices have surpassed even the highs of 2007 and are currently eclipsing 2016’s numbers.

Obsolete buildings are surprisingly drawing more attention than ever before. In the past, contemporary buildings were in demand, but in light of the shortage of buildings available, even the oldest buildings are becoming prime property — in other words, these ugly ducklings have transformed into beautiful swans. Thus, historic prices have been witnessed. For business owners who are interested in taking advantage of commercial leases while opportunities can still be found, an attorney in Los Angeles can help with looking over and even negotiating lease agreements to ensure business owners and investors avoid costly pitfalls in their effort to secure today’s in-demand spaces for lease.

Source: ocregister.com, “6 random commercial real estate thoughts“, Allen Buchanan, May 6, 2017

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