This beautiful 4th-story office space is a wonderful “class A” property, with nice ammenities and a very responsive management company.
For more listings in the Laguna Nigel area, or for any other Orange County or Los Angeles commercial real estate, please visit us at Monocle Real Estate Services.
5,000 SF Retail Space in Santa Ana — $2.45 / SF
July 31, 2008
This charming piece of Santa Ana retail property is set in busy downtown, with heavy office traffic, and wonderful signage. A real charming piece of property.
For more listings is the Santa Ana area, or for other Los Angeles commercial real estate listings, please visit our website.
Ok, it is obvious to even the most novice real estate investor that there is a difference between commercial and residential housing prices. But if phrases like “cap rate” and “NOI” make your head spin, let me take some time to explain it to you.
In housing, the pricing is typically determined by comparable sales in the area being used to get a sense of what buyers are “willing” to pay in the area. This is a very delicate art, where there is a lot of emotion and personal judgment involved in the pricing.
In commercial real estate, the approach is pricing is very different. It is called the “income approach” to value, which is based upon the income that the property yields on a yearly basis. The basic equation is this: Price = Net Operating Income (the total income less expenses)/ CAP RATE.
What is a cap rate? It is the “risk factor” applied to the property, expressed in a percentage, of the relative risk of the property. It can usually range anywhere between 1 and 15%, depending on the “riskiness” of the property’s income stream — the higher it is, the riskier it is, and therefore the greater return you should get on the property. In common terms, however, it is the rate of return per year that you get on your money, assuming you paid all cash. So a 10% CAP on a $1M property means you will make $100,000 of net income per year.
What governs cap rate? Market conditions and emotion, much like residential. In recent years, commercial real estate has been seen as a very stable and safe place to invest, and cap rates are usually based off of the typical money market returns — ranging more from 2-5%. But as times get more adverse to real estate, and the credit crunch reaches commercial real estate, we will see these numbers rise.
For more information, please visit our Los Angeles commercial real estate investing section at our website.
Another good point to make for those fledgling commercial real estate investors and purchasers is that closing a commercial property is VERY DIFFERENT from a residential one.
For starters, the average time frame is much longer. While a residential deal will blow through closing in a matter of weeks, most commercial real estate deals end up taking between 4-6 months. That means a long period of illiquidity, slow turn-around, and a LOT of work.
What takes so long? Well, for starters, commercial property inspections and commercial appraisal take exceptionally long periods of time. The reason for this is that they must not only check the structure (which is often times much more complex and large). but also do things like validate the income of the property across income taxes, rent rolls, and many other elements.
Due diligence also becomes a marathon for the buyer. This means doing large-scale site investigations with a geologist, surveyer, contractor, and many, many others. It means tracking down and validating all the property’s accounting for yourself, to check for inaccuracies or indiscretions. Commercial loans also take much longer to approve, and often times wait for all the due diligence to be complete and send to them to then ALSO validate.
You are also more frequently dealing with an out-of-state owner, which means slower correspondence, and often times a lot of miscommunication.
It also costs much more, and becomes a sizable negotiating element.
For more information on commercial real estate closing, or Los Angeles commercial real estate in general, visit us at Monocle Real Estate Services.
South Orange County Industrial Lease – $1.25 / SF
July 29, 2008
This gem of commercial real estate is right off the 5 Freeway, just south of the Irvine Spectrum, with great freeway visibility and excellent dock doors. Visit our Orange County and Los Angeles commercial real estate sites for more information this listing, and many other commercial property listings.
This rare opening in the Wilshire corridor gives the tenant immediate access to UCLA and Westwood Village, as well as top-notch facilities, and a view to die for! A bargain at $4.00 / SF. Act quickly, because this opportunity won’t last long!
For more listings in Los Angeles office space, please visit us at Monocle Real Estate Services.
5K SF Office Condo in West Hollywood — $4.2 M
July 29, 2008
Own this stunning piece of commercial property in West Hollywood — near both Sunset Blvd and the retail corridor of Santa Monica Blvd, with beautiful views, and unrivaled convenience! Visit our Los Angeles commercial real estate agents for more information at Monocle.
This prestigious “class A” office building is located right near the heart of Marina del Rey by the beach. Stunning beach views, and generous parking.
For all your Los Angeles commercial real estate and Office Spacee needs, think of Monocle Real Estate Services.
1,500 SF Malibu Retail — Sublease for $3.00 / SF
July 29, 2008
This available piece of prime Malibu real estate is a unique opportunity to be in one of Malibu’s prime shopping centers — for only $3,00 / SF! Close proximity to the beach, PCH signage, and sharing with many national tenants for good foot traffic.
For more information, please visit our Los Angeles commercial real estate site for more information.
This newly-rennovated piece of commercial real estate is minutes from the 405 freeway, in a beautiful business sector. Wonderful views, and a nice, quiet garden to get away from the hustle of the big city.
For more information, please contact our Los Angeles commercial real estate department. Monocle — experience the difference.
