We’re starting off the year with good listings including a 58,000 SF building in Paramount (lease), a 7500 SF Building in Gardena (sale), a 9 acre development site in Compton (sale), and a 2 Acre Truck Yard in Gardena (lease). I also have deals working in Riverside, CA; Houston, TX; Long Island, NY and of course, Gardena, CA.
Continue reading “What’s New at Klein Commercial – March 2014”
In Los Angeles, older buildings continue to be valued unlike in many other post-industrial cities. Although these buildings have lower ceilings, poor loading, and limited parking, there have many types of occupants. The main advantages to older buildings are their low rents and central locations. One significant downside is since older buildings compete on low rents, owners can’t afford a lot of improvements. This condition creates blight and despite good occupancy rates, neighborhoods decline. Taxes and planning laws exacerbate the situation.
Tenants have underappreciated power especially in cases of new development and investment projects. Most tenants don’t realize their own worth because they are rarely in the market, don’t experience the development cycle and are oriented towards functionality. Conversely, lease terms and tenant credit are essential to the developer. The capital impact of the lease is well understood by the developer but is often neglected by the tenant.
Continue reading “Tenant Power”
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The world of big industrial has evolved with fewer and better capitalized buyers. It’s a core group of 15 or 20 nationwide owners that know the markets, have talented principals and to the delight of most sellers, they close for all cash. In contrast, the entrepreneurial developer who played such an important development role in past buying cycles has almost completely vanished from the scene. High Net Worth Funds, REITS, Pension Plans, and the Insurance Companies dominate the ranks of primary industrial investors. Occasionally, developer partners, seek out capital from the large institutions, but control still reverts to the same dominant group of investors.
Continue reading “Concentration Continues at the Top Tier of Industrial Buildings”
New California state law that starts taking effect August 1, 2013. All Sellers and Landlords will need to disclose the energy efficiency of their buildings in any sale or lease of an entire building. The goal is to have an Energy Star rating of 75 or better. However disclosure of any score is a requirement. Here is the handout I received from Greenberg Glusker who provided the legal overview and Green Econome who will help you with the filing and disclosure. Handout
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This diagram from RREEF shows we are in a classic upswing on the real estate cycle. Lots of money in play, rising property values, and local business is improving. It looks like we have a long way to go excepting some huge policy mistake and that’s unlikely.
Good technology can improve real estate deal making. This article describes my experience with Geographical Information Systems (GIS) and how it has become a fundamental tool for my business. At its simplest, GIS programs are a visual adjunct to database and contact management programs. However, if used to its fullest, GIS can crystalize multiple property relationships to monetize real estate information by traditional forms of deal making, solve complicated problems and create new business models.
Continue reading “Real Estate Deals in the GIS and Data Universe”
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2012 was a very steady year and the best since 2007. I sold land in New York and North Carolina; A $3MM warehouse sale in Savannah, Georgia and a $9MM apartment community in Central Los Angeles. My Gardena/South Bay Industrial core was very solid with over 175,000 SF of building sales and leases. Several things are coming togeth er at the same time. My 30-year presence in Industrial Los Angeles has given me trusting relationships and extensive market knowledge. The investment in a sophisticated GIS database (MAPP) helps to locate property with exacting criteria. The New York State Real Estate License gives me another large market to tap. Strong national and international ties through SIOR substantially widen my geographical scope. As the economy continues to rebound, we will experience a Golden Age of Real Estate.
One of his (Warren Buffet) big worries these days is about what’s going to happen to all the pension money that is being invested in the markets, often with little success, in part because investors are constantly buying and selling securities on the advice of brokers and advisers, rather than holding them for the long term. “Most institutional investors, whoever is in charge — whether it’s the college treasurer or the trustees of the pension fund of some state — they’re buying what they’re sold.”
For More: http://dealbook.nytimes.com/2012/12/03/for-buffett-the-long-run-still-trumps-the-quick-return/?ref=todayspaper
Deal Book – Anfrew Ross Dorkin
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