Multifamily Opportunity in Sherman Oaks — Three Units for $2.2M

This unique high-end Sherman Oaks multiunit home is an ideal choice for investor looking to take advantage the downturn in the market, and pick up this brilliant home at a competitive price!

For more listings in Los Angeles Commercial Real Estate, please visit our website and search with our company.

Signage Size Requirements in Los Angeles

Signage is an important element to many businesses, especially in Los Angeles, where street visibility can lead to hundreds of thousands of drivers each day. So it would follow that the laws governing signage are very important, in particular the size.

So how big can you make a sign? In Los Angeles city, you are allowed 1.5x the street frontage (in feet)– so, if for example, you have a 60-ft frontage, you will be able to have 90sq-ft of signage. This sign can be divided in any way you see fit, and will depend upon the type of construction you have. There are many good options when it comes to finding a sign contractor, so locate a respectable one in the area to help you out with a site visit to the location.

For more information about Los Angeles Commercial Real Estate for sale, please visit our website.

4,500 SF of Redondo Beach Industrial Space — $.80 PSF

This manufacturing space is built out for high-energy usage and excellent mezzanine office space. A real perfect choice for light manufacturing…close to the freeways and Long Beach Port!

For this listing, and many more, you can search our website for Los Angeles commercial real estate.

3,200 SF Office Space in Century City — $2.25 PSF!

This Century City low-rise is ideally situated near the Westfield mall, on a quiet street off of Santa Monica Blvd. This unit is priced to move, so act fast!

For all of your commercial real estate needs in Los Angeles, visit our website.

Carpet Removal in Industrial Spaces

As a word to the wise, be sure to include in any lease or sale of industrial property, that if they are removing the carpet in the unit, or any other form of flooring, that you include language that ensures that they return it to a fair and usable condition.

I cannot tell you how many of my clients have been so pleased that they had language in the agreement to cover that: most of the time, removing carpet leaves behind unsightly and problematic glue stains and other spots that may have been otherwise covered by the carpet — and those can really be costly to fix.

For more quick tid-bits of advice on commercial real estate in Los Angeles, please visit our website — Monocle: experience the difference.

4,000 SF Industrial Condo for Sale in Alhambra — $1.4M

Become the owner of one of the cleaniest industrial condos in all of Alhambra! Beautiful new development, with excellent build out, and 2 GL doors. An absolute steal at $1.4M!

For more information, please visit us at our Los Angeles Commercial Real Estate site.

2,150 SF Retail Space in Culver City — $4.50 PSF

This charming boutique-style retail space has great visibility on Sepulveda Blvd, ample parking in back, and a beautiful store front. Few listings come on the market as good as this — don’t miss out!

For more Los Angeles Commercial Real Estate Listings, visit our website.

The “Sticky Floor” of Real Estate Pricing

A lot of people are very concerned with timing their real estate purchases with the bottom of the market, and as a result, want to buy the moment the price has taken a blip down, only to continue to lose at an alarming rate. That game of “timing” is a concept brought over from other investment vehicles, like stocks, that operate on dynamic sin-curves, and the trick is to hit it right before the rapid upswing. Real Estate, however, is historically unqiue.

I will enter into your vocabulary the concept of the “sticky floor” of real estate pricing. If we look back in history to the major booms and downturns in real estate (the Great Depression, the mid-sixties, the mid-80’s, late 90’s, etc.) we see that the pattern of pricing is not that of a sin curve. Rather, it tends to have periods of rapid growth, followed closely by rapid falls, followed by extended periods of relatively flat pricing. After a boom, the “bottom” of the real estate market seems to be when the market has reached stability after the downturn, and lasts until the next upturn. So, rather than have a full sin curve-shape, real estate looks like the lower half of the curve has been lopped off — providing for only upturns, followed by downturns of near-equal proportions — hence the concept of the “sticky floor”; rather than dip down to new depths, real estate prices instead opt to have extended periods of relatively flat growth. In fact, despite the amazing swings in value, the average appreciation of a home is very little above that of true inflation rates in the U.S. (8.98% as compared to around 7.9%…depending on the resource.)

This seems to contradict the basic concepts of economics, but that is not the case — real estate is just a much more complicated model for supply and demand. Glossing over some of the more complicated smaller elements, here’s the easiest way to explain why it is: traditionally — frenzied upswings in value are usually brought on by an outside force on the markets, usually a severe loosening of lending requirements and underwriting (like the 9-11/loan repackaging of the last few years, or the S&L crisis before it, or even the exisitence of subprime mortgages) or a related boom in the US economy in general. The ease of getting money allows otherwise under-qualified potential buyers to become qualified, and demand (and price) are driven dramatically upward. People become very “house rich” and assume more debt, again raising prices further.

Those risky loans to risky people, however, do turn bad when inflated housing prices reach ciritical mass (or loan rates start resetting) and new buyers cannot afford to enter the market (as only “trade-in” buyers can), and those with those homes cannot afford the payments. Once people can no longer afford the homes, banks begin to forclose, and housing prices plummit as it is impossible for banks to not have large real estate holdings, and they have to sell them at steep losses. Swift policy needs to be reformed, and lending requirements tighten back to the point that they were before the boom (or worse), and demand plummets. General panic and pessimism sets in, and homes continue to fall in value until around the time that actual new buyers can afford the homes at the now-stricter lending requirements.

And once that equilirium is met, things go quiet. Why? It is simple: most homeowners are not investors or banks: they live there. And the amount of people who “must” sell is relatively small — and instead the market reacts to the downturn in demand by having a large downturn in supply. People who are financially solvent and don’t have to sell, simply stop trying to sell their homes, and instead hold on to them. What happens is that instead of the price point shifting farther down past the point that it originially was, the volume of transactions goes way down. In that way, the decrease in value is absorbed by a lowering of supply and turnover. Stability is reached in the market, and prices “go flat.”

These flat periods are proportionate to the severity of the uptun and downturn, and tend to last anywhere from 8 months to 5 years. What finally brings the real estate market out of that stability is another “frenzy” induced by ouside forces, which tends to cycle through various forms every 10 or so years.

The author is a residential and Commercial Real Estate Broker in Los Angeles, and has been working in the industry for many years. If you are looking to buy or sell commercial property, please visit his website.

2,000 SF Newly-Refurbished Office Space in Beverly Hills — $5.25PSF

Looking for a sharp new location for your business? This North Robertson charmer has its own private parking, excellent visibility, and an immaculate setting! Worth taking a look at for anyone looking for a great new location to set up shop.

For more information on this listing, or to search Los Angeles Commercial Real Estate, please visit our website.

Why No One Should Be in a Hurry To Buy a House

It’s tempting to look at the free-falling prices in real estate right now, and start salivating — visions of seeing those prices blip back to their values from two years ago, and realize a 100% profit in a few short years. I only have one bit of advice: wait — it is going to go a lot farther.

Everyone has said that “the other shoe” has dropped on residential real estate, and it is a great time to buy, but in actuality, we are waiting on three more to drop — escalated interest rates, reflected median household incomes, and simple supply and demand.

Interest rates are great right now — in fact, unprecedented…one of the best rates we have seen. Shouldn’t that mean its a great time to buy, since money is cheap and you can get more house for your dollar? In an isolated experiement, yes. And certainly, the rate will deifintely increase. However, in a market in which “value” is tied to the actual and current availability of money, home prices are HEAVILY tied to interest rates, and as rates rise, home values drop significantly. As an example, let’s say a buyer can afford $2,000/mo. in mortgage expenses. If the interest rate (like current) is 5%, he could afford up to a $480,000 house, depending on how much financing he could secure. Now, let’s say available interest rates jump to a historically-normal level of 10% — all of a sudden, that same buyer can only afford up to $240,000 of house — halving his buying pwoer, and thereby, the value of any home he would have been considering. Rising interest rates is not a chance event — it is a certainty. And anyone buying now will have to realize that every point the interest rate rises, the effect will be huge on value.

The second consideration is median household incomes. Though the numbers have not come out for 2008, median incomes are projected to be around $62,000, which is in great contrast to the $255,000 median home price. Traditionally, people can afford to borrow up two times their income, and the disproportionate growth of home values have left this scale still very off-set. And with the general economy on its downturn, it is only likely to greaten the divide. Expect prices to adjust downward to come back into relation to income.

The third is simple supply and demand. Traditionally, a residential property was valued at a point in which the monthly expenses of owning were in equilibrium with renting a comparable building, less a dividend to account for the difficulty of acquiring a down payment. So, the idea would be that a house would cost the same as renting, less a 6-10% return on the total value of a down payment. For the last few years, however, there was no necessary down payment, and therefore no dividend applied to value, and due to the appreciate rates, fell way out of line with renting, because the assumed increase in value would far outweigh the additional monthly costs, which would often be paid by cash pulled from the home’s “equity.” But now that appreciation rates, housing must prove itself once again to be a competitive investment vehicle compared to other elements, or else people will rent.

And so when is a good time to buy? Well, expect this year to be a hard one (30% further drops in value will not be unheard of), and then start leveling off once values are back within reason on the above rules. The nice thing is that after a big boom and bust in real estate, prices tend to level out for several years, which means you can afford to be patient, and wait until things cool down (you can read my article on “sticky-floor” real estate pricing) coming i nthe coming days.

The author is a professional in both residential and commercial real estate in Los Angeles. Please visit his website for more information.