Brokerage Archives - Page 9 of 10 - Klein Commercial Real Estate

INFILL LAND

Posted on August 12, 2007April 29, 2021 by Jim Klein

In the competition for industrial real estate investments, more institutionally backed buyers are dabbling with infill land, but have not yet found the formula for success. Infill sites are considered non-traditional investments because they take more effort to understand and come with substantial risk. Large buyers can not make as big an investment in infill as when they purchase a portfolio of buildings. For this reason, and until institutions learn how to roll up these non-core properties, there is still a great opportunity for smaller entrepreneurial buyers to distinguish themselves as experts in the field.

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Inland Empire and Beyond the Basin

Posted on February 1, 2007April 29, 2021 by Jim Klein

Until recently my clients preferred to stay close to home and were satisfied with property offerings in the LA Basin. Now, I’m driving more, especially east. Many are recognizing that pricing for modern buildings in the Inland Empire is considerably less on a square foot basis. Employee housing in the region is currently ”on-sale” because of sub-prime loans. Communication has improved such that top management no longer needs to reside in the production facility on a daily basis. The Inland Empire can serve as a more functional location than being buried inside Los Angeles. Finally, developers are frustrated with the limited industrial opportunities in L.A. and need to follow the growth.
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Commodity Vs. Developer Property

Posted on January 2, 2007April 29, 2021 by Jim Klein

There are two types of property we sell. Commodity properties are typically found on the MLS and are generally offered to Users. Developer properties are land deals that will ultimately be developed into a commodity property. While it is a tidy distinction, owners of each make mistakes because they don’t understand the differences from a deal-making perspective. Each property type has its own logical steps to marketing, representation, legal, and negotiation.

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Added Value Property

Posted on October 27, 2006April 29, 2021 by Jim Klein

Creative solutions to problem real estate are the domain of value added deals. These are buildings that after they are redeveloped will increase cash flow and operability. The simplest examples are adding more square footage to an underutilized land area or subdividing the building for smaller tenants at a higher per foot rent. Because building new is so costly, there is more attention being paid to reconfiguring older property.
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Valuation

Posted on October 2, 2006April 29, 2021 by Jim Klein

In many cases traditional methods of valuation – comps, income, and replacement – are no longer guides for pricing property. Sale prices often exceed most traditional justifications. Properties sell with cap rates that are below mortgage rates so the buyer is already starting in a negative position.

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Expolding Land Values

Posted on January 7, 2006April 29, 2021 by Jim Klein

n my past few newsletters I discussed the enormous potential for land. These days, older property is being purchased for the underlying land value. The major impetus is the evolution from single story development to multi-story. Use of air rights increase the value of land in areas that have never experienced mid rise development. The proposition is obvious in dense urban areas like Pasadena, Downtown Los Angeles, Anaheim or West LA; however, mixed use is expanding throughout the entire region.

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Enterprise Buyers

Posted on October 12, 2005April 29, 2021 by Jim Klein

While many investors complain about a lack of deals and high pricing, others see nothing but opportunity. One difference in perception is risk tolerance. Another is a reluctance to embrace new development models. But I think the biggest factor in the vision discrepancy is the nature of their organizations.
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Post Industrial Land Use

Posted on October 1, 2005April 29, 2021 by Jim Klein

When the last few aircraft factories close, we will have witnessed the complete deindustrialization of major plants in Los Angeles. Big steel, auto, tires, and glass are all gone. In their place are retail centers, big box distribution, a smattering of public buildings, and new urbanist housing.
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Gardena In Crisis

Posted on March 27, 2005April 29, 2021 by Jim Klein

Gardena is on the brink of insolvency because of a failed insurance investment and poor governing. While desperate to right itself, Gardena’s effort points to a generation of bad decisions. As we enter a period of scarce State and Federal resources, cities like Gardena will be even more dependent on their own management abilities.

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Underutilized Sites

Posted on March 7, 2005April 29, 2021 by Jim Klein

The value proposition is overwhelming when comparing old, obsolete structures to developing say, a 3-story residential condominium. We often see redevelopment returns of 2 and 3 times compared to what is currently being generated at an older property. All industrial property with a decent location is open to reuse. A growing population, increased densification and worsening traffic mean there is continual opportunity in underutilized property.
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