1,000 SF Industrial Space in Irvine — $2.45 PSF
February 10, 2009
This ideal location for a small industrial business in in the heart of the airport area, just minutes from the 405, 55 and 5 freeways. The location cannot be beat!
For more information on Los Angeles commercial Real Estate, visit our website.
2,000 SF Office Space in Costa Mesa — $3.50PSF
February 10, 2009
Looking for an attractive, well laid-out office space on the first floor with excellent parking in the heart of Costa Mesa? Then look no further! This charming space is perfect for an office that entertains clients and needs to impress!
For more information on Orange County and Los Angeles Commercial Real Estate, please visit our website.
2,150 SF Retail Space in Culver City — $4.50 PSF
February 5, 2009
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!
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4,000 SF Artists Industrial Space in Laguna Canyon — $3.00 PSF
February 4, 2009
Looking for an opportunity to move your business to the heart of the Laguna art community? This rare opening is the ideal fit for an artist’s studio where light manufacturing would take place.
For more information on this listing, or many others, pleas visit our Los Angeles Commercial Real Estate site.
The “Sticky Floor” of Real Estate Pricing
February 2, 2009
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.
Looking for an immaculate class “A” space in the highly-desirable airport area? Then look no further! Excellent ammenities — intelligent layout — perfect for most businesses! Great visibility / accessability. Contact for inquiries.
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2,000 SF Newly-Refurbished Office Space in Beverly Hills — $5.25PSF
February 2, 2009
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.
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