Commercial Real Estate for Beginners — Signage
October 28, 2008
A frequent question I come across in this job is: “What sort of sign can I put on my building, and I can I make it 40′ x 40′ / rotate and shoot sparks / explode candy / be seen from the moon?” There is no doubt that signage is an important part of many businesses — it represents both a physical presence for the company, as well as a potentially very-powerful marketing tool. And the rules that govern them? The vary wider than any other restrictions I’ve seen.
Take L.A. A city plagued by billboards and uber-signage, where over the last 50 years, every corner (commercial or residential) has a giant advertisement. To compensate, the signage rules are incredibly strict, and limit big signs (larger than 1.5 sq-ft per linear foot of street frontage) to those that have been grandfathered in from previous owners. And so in L.A., you have to get creative, and see what is possible within the strict confines of those rules.
Where do you find those rules? Look with your local city planner (they should be online), or you can visit one of your local signage makers, who have the same information, and may be more up-to-date. Ask them that sort of restrictions exist, and what the various classifications and requirements for signage are (this code is normally 20+ pages of REALLY boring writing.) And don’t get too upset if your local broker doesn’t know the answer off-hand — that information changes frequently, and is typically handled by a third=party signage company.
For more information on Los Angeles commercial real estate agents, or Orange County commercial real estate investing, please visit one of our websites. Monocle Real Estate Services — Experience the Difference.
Wilshire Corridor Office Space — 2000 SF at $5.00 / SF
October 28, 2008
This charming piece of real estate is right in the middle of the bustling and historic “Wilshire Corridor” of Beverly Hills. This high-rise offers great ammenities, excellent visibility, and consistently one of the highest reviewed buildings in the area.
For more information on this listing, or other Los Angeles commercial real estate listings like it, please visit our Los Angeles website.
Newport Coast Duplex — Stunning — $3.5M
October 28, 2008
Own a rare part of the Newport Coast with this beautifully-updated and appointed duplex. The two units sit on top of one another, with plenty of parking for both. Stunning views, and a beautiful shared back yard. A real gem.
For information on this listings, or other listings throughout the Orange County commercial real estate market, please visit our website and use our “search” feature.
17,050 Industrial Building in Inglewood — $.99 / SF
October 28, 2008
This stand-alone manufacturing building is centrally-located near the 405 freeway, with 1 dock-high door, and 1 ground level door. A nice yard provides for easy truck access, and it is very well-maintained.
For more on this listings, or other Los Angeles commercial listings, please use the search feature on our website.
5,000 SF High Rise Office in Century City — $4.60 PSF
October 28, 2008
This gem of Century City is walking distance from local malls, restaurants, and central Century City. Spectacular views, and a smart lay-out. Contact us for more information.
For all your commercial real estate needs, please visit our Los Angeles commercial real estate site — Monocle Real Estate Services…experience the difference.
2,000 SF Industrial Space — Inglewood $.90 PSF
October 14, 2008
This warehouse space is perfect for a small-scale industrial operation, or an automotive-support company near downtown Inglewood. Recently remodelled, and with good street exposure.
For more information on Industrial Space in Los Angeles, visit our commercial real estate listing page.
For anyone looking to get involved in owning or runnign a mobile home park, it is very important to understand how they operate, where the money comes from, and what you do, and do not, own.
People wrongfully assume that owning a mobile home park is just like owning an apartment building — you own the land, the units, and charge rent, and the tenants pay for some or all of the tenant-generated expenses. Indeed, some parks are in fact run that way — where the park itself owns the units, but these parks charge much higher rent, and end up being less profitable.
Why? Because mobile home units tend to be cheaper construction, with shorter usable lives, and steep costs for demolition, removal, purchasing of new units, and installing them. The best comparison for how most parks are typically run are much more like a mini-housing development, where the individual owners are on leased land from the park.
Ideally, the park itself does not own any units — the units are instead owned by the tenants, who either come in with the unit already paid off, or else have it financed by the bank, or the park owner (current interest rates on mobile home mortages are 12%.) They are ideally separately metered for gas and electric, and pay a prorated share of the additional non-global expenses. The park when charges a “ground rent”, which is the basis for most of their income (though additional income may come in from laundry services, or the owner-carried loans.) The new units may be either brought on by the tenant, a mobile home park maunfacturer (who will pay rent), or by the park itself (who will initially own the unit until it is “sold” to a tenant.)
The reason most parks are run this way is several-fold. For one, the fact that the tenants own the units mean that they will likely keep better care of it, and increase the usable life and appearance of the unit. If the park carries a loan for the unit, it also gives the park leverage over the tenant who is behind on payments to get his act together, or get foreclosed and lose his equity in the unit.
The big reason, though, it that 90% of the time, mobile-home ownership is illusionary. The concept is that in 10-15 years, they will “own” their own unit, which they can then move to any other place they may want to move. The problem with that logic, however, is that the costs of removal, transport, and reinstallation will often be greater than the remaining value in the unit after 10-15 years, and they will end up doing better to just walk away, and (if it is still habitable) try to sell it back to the park owner at a steep discount. Plus, if a person stays in a unit long enough to have spent a decade there, they are likely to have developed roots in the area, and become a rather captive tenant base, that will less likely to leave in the case of rent increases.
Certainly mobile home parks can be a lucrative investment. But if it sounds a little underhanded and capital intensive, it is. I will continue on this in part 3 — the downside.
For more information on mobile home park investment or to search Los Angeles commercial real estate listings, please visit our website.
Of course, mobile home park ownership is not fo everyone, and all those “Get Rich Quick” gurus are claiming that with mobile home parks, you cannot lose. I hate to burst everyone’s bubble, but mobile home park ownership is work-intensive, capital-heavy, and very risky, and requires hiring a skilled staff of individuals to help run and oversee the park. Here is a list of the downsides to consider when you are looking buying a mobile home park:
1. Everyone Else is Doing It.
Mobile home park investing has been in an absolute bust over the last few years, primarily due to the otherwise low cap rates that the rest of the commercial real estate market has been traditing at. Common investment knowledge is that “when eveyone zigs, you zag.” More interested buyers means higher competition, and higher prices at lower rates of return. And considering the risky nature of mobile home park investment, those numbers can be worrisome if there is no security blanket for a bad stretch of ownership.
2. It takes lots of money:
Besides the purchasing of the park, consider that you will have to demolish, remove, move in, purchase, and sell new units on a fairly regular frequency. And while ultimately you will (hopefully) see that money back once you sell the units, and with a heathy return, it all requires a lot of additional capital on hand.
3. Would you lend $20 to a mobile home park tenant?
Now there are many good, honest, hard-working people in mobile home parks, so I do not want to generalize, but I will say this: in general, mobile home park tenants are the lowest level of income-producers that are not homeless, and mobile home parks are notorious for delinquent renters, frequent evictions, and sometimes very ugly eviction battles. And a large park of your economic model is based upon lending them the money to buy a mobile home park unit, with the hope that if you have to evict them and foreclose on their home, they won’t burn it to the ground.
The problem is that unlike major corporations, high-income individuals, or small businesses, your tenants in a mobile home park have very little, and even less to lose. There is a reason why mobile home parks trade on higher cap rates on average than other forms of commercial real estate investment: the ability to collect your rent is far riskier.
Now, that’s not to say that money cannot be made on mobile home parks — many have done so, and will continue to do so for many years. However, given the current frenzy over it, and the very high prices, I would advice you to employ a bit of caveat emptor when looking to buy.
Still want to buy a mobile home park? We have agents who specialize in mobile home park sales in California, and would be happy to guide you to finding the right investment for you. Just viist our Los Angeles commercial real estate page, and clikc on the “contact” page.
3,000 SF South Orange County office space — $2.55 PSF
October 14, 2008
This class-A office building in Lake Forest is conveniently located right off the 5 freeway. Beautifully-remodelled. Huge windows, and great view.
For more information on this, and many other listings in South Orange county, Visit our Orange County commercial real estate site.
2,000 SF Office Space — for rent in West L.A. $2.80 PSF
October 9, 2008
This beautiful low-rise office building is centrally-located and ideal for a small business looking for a professional location with good parking and excelelnt ammenities.
For more information about this listing, or to search Los Angeles Commercial Real Estate, please visit our website.
