Jodi Summers = Office Real Estate

LOS ANGELES TO GET THE NEXT TALLEST BUILDING IN THE WEST

May 20, 2013 on 9:56 pm | In Bravo, New Developments, Uncategorized, Winning Properties | No Comments

by Jodi Summers

It’s bigger in Los Angeles, thanks to the construction of the tallest office building west of Chicago. It was recently announced that the 73-story Wilshire Grand hotel and office building to be constructed in downtown Los Angeles. The $1-billion hotel and office skyscraper by developer Korean Airlines will live at Wilshire Boulevard and Figueroa Street. It will be a dramatic addition to the city skyline when it completed in 2017.

Designed by L.A.-based architect David Martin, a principal at AC Martin Partners, the 1,100-foot, glass-skin building will feature three floors of shops and restaurants at ground level, 400,000 square feet of office space, and a hotel with a “sky lobby” on the 70th floor. Guests will rise by high-speed elevators for check-in to one of the hotel’s 900 rooms. A restaurant will take over the 71st floor, and on the top floor, there will be an “infinity” pool and recreation area. The hotel brand has yet to be selected.

Martin designed the Figueroa-at-Wilshire high-rise across the street from the Wilshire Grand in 1990. The family firm was the primary architect of Los Angles City Hall in the 1920s.

The property is located just north of the STAPLES Center and The Ritz-Carlton Residences at L.A. LIVE, the luxury residential tower where residents enjoy access to the five-star lifestyle services of The Ritz-Carlton.

The 936-room Wilshire Grand, built in 1952, was originally known as Hotel Statler and later a Hilton. Before it closed at the end of 2011, the property was a mid-market hotel catering to conventioneers and tour groups from overseas.

Politically, the Wilshire Grand will be a symbol of South Korea’s growing status as a global economic powerhouse.

Korean Air is the flagship company for Hanjin Group, which has $20 billion in annual revenue from its interests in land, sea and air transportation as well as construction, heavy industry, finance and formation services.

“The new Wilshire Grand is an investment that makes sense and we are excited to continue our relationship with this great city,” Korean Air Chairman Y.H. Cho said in the L.A. Times.

The Wilshire Grand will slightly surpass in height the 72-story U.S. Bank Tower on Bunker Hill that has held the title of tallest west of Chicago since 1989.

http://www.latimes.com/business/money/la-fi-mo-downtown-skyscraper-20130207,0,295662.story

http://images.catholic.org/ins_news/2013020048wgtower-p.jpg

http://cdn.designbuildsource.com.au/wp-content/uploads/2013/02/Wilshire-Grand-wide.jpg

http://www.socalofficerealestateblog.com/?p=2332

http://altwire.utne.com/zine/neuroscience_v1/previous-story/7034714562334c6271444150514f4e513557742f51513d3d

http://www.theagencyre.com/2013/02/west-coasts-tallest-building-to-be-built-in-downtown-l-a/

http://www.socalgreenrealestateblog.com/?p=75

YOU CAN BUY THE GREEN NATIONAL OFFICE PORTFOLIO

May 10, 2013 on 8:45 pm | In Green, Investment Opportunities, Lights Camera Transaction, Office Fodder, Uncategorized, Winning Properties | 2 Comments

by Jodi Summers

You can buy the National Office Portfolio = six significant office assets have attained a level of LEED certification and the portfolio is available free and clear of existing debt.

Spread across the country in such desirable cities as Los Angeles, Dallas, Houston, Washington, D.C., and West Palm Beach, FL. all totaled, nearly 2 million square feet of office space.

Here’s what’s included in the deal:

• Los Angeles – 500 North Brand Ave. Located in the heart of Glendale’s Central Business District, this 22-story, 413,274-square-foot office building provides tenants with one of the area’s most exceptional office space alternatives. This premier high-rise is conveniently located adjacent to numerous retail, restaurants, and hotel amenities, including the Glendale Galleria, the to-be built Americana at Brand, and the Burbank-Glendale-Pasadena Airport (Bob Hope Airport).

• Washington, D.C – One Washingtonian Center, a Class A, LEED, 14-story, 315,929-square-foot office building in the Gaithersburg submarket of Washington, D.C. that recently renewed a lease with Sodexo Inc. to keep its headquarters in the building. Sodexo, is on Fortune’s list of The World’s Most Admired Companies, has the ambition is to become the premier expert in Quality of Daily Life service solutions.

• Palm Beach – Esperante Corporate Center, a 20-story, 256,151-square-foot, and LEED Gold landmark located at the gateway to Palm Beach – Esperante Corporate Center commands spectacular views of the Atlantic, the Intracoastal Waterway and Downtown. Having recently completed a $4.5 million renovation, achieving status, this Class A asset offers WiFi-enabled common areas, a 24/7 lobby attendant, valet parking and a six-story atrium ideal for corporate events. Tenants automatically become members of 5-Star Worldwide, an exclusive program of tenant services that adds value to every square foot.

• Houston – 2603 Augusta, a 16-story, 243,348-square-foot office building located in the West Loop/Galleria area, described as “Houston’s premier submarket.” 2603 Augusta offers Class A, boutique office space and all the amenities of the Galleria at your doorstep.

• Dallas – Preston Commons, 8111-8117 Preston Rd., Dallas 75225 – an office complex totaling 427,800 square feet that includes a pair of eight-story buildings located in the Preston Center submarket of Dallas. The building description boasts, “A revolution in tenant service, 5-Star Worldwide is an uncommonly smart choice for tenants who need a wide array of business and personal amenities to include conference facilities, technical support, a cafe and 5-Star Worldwide personal attention.”

• Dallas – Sterling Plaza, a 302,747-square-foot building asset at 5949 Sherry Lane in the Preston Center submarket of Dallas. Sterling Plaza has one prime objective: To become North Dallas’s premiere office destination offering VALUE, SERVICE, and a fabulous package of AMENITIES. Here, tenants enjoy a one-of-a-kind 5-Star Worldwide amenities program featuring executive conference facilities and concierge services. Come see why Sterling Plaza is “Where Business Shines.”

Interested? Contact us. We’re here to help you with your real estate needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

http://www.esperantemgt.com/home.axis

http://www.costar.com/News/Article/CBRE-Shopping-US-Office-Portfolio/145922?ref=100&iid=324&cid=383F14EEE265B182474DA2442BACBBBF

http://www.socalgreenrealestateblog.com/?p=2646

http://www.loopnet.com/Listing/14598363/500-N-Brand-Blvd-Glendale-CA/

http://www.prestoncommonsdallas.com/home.axis

http://www.sterlingplazadallas.com/home.axis

http://2603augusta.com/PhotoGallery.axis

http://www.sodexousa.com/

SOCAL OFFICE REAL ESTATE SNAPSHOT ~ MAY 2013 ~ BROOKFIELD’S DOWNTOWN COUP

April 30, 2013 on 9:03 pm | In Bravo, Fascinating Information, Investment Opportunities, Lights Camera Transaction, Market Snapshot, New Developments, Office Fodder, Uncategorized, Winning Properties | 3 Comments

by Jodi Summers

The biggest news in L.A. office real estate is a changing of the guard. Brookfield Office Properties Inc., one of the biggest players in Manhattan real estate reached a deal valued at more than $2 billion, including debt, to become the largest office landlord in the Los Angeles downtown.

Brookfield and its partners agreed to pay $3.15 a share for MPG Office Trust Inc.’s (MPG) common stock, at a 21% premium, notes the Wall Street Journal. When the deal closes in 3Q, Brookfield will take control of four skyscrapers totaling five million square feet, including the Wells Fargo Tower and KPMG Tower, two of the five tallest buildings in Los Angeles. Taken with a purchase of preferred stock, the Brookfield-led group would pay more than $425 million in cash for the company, which has about $1.9 billion in debt.

Upon completion, Brookfield becomes the largest downtown office landlord, having 8.3 million square feet to rent in seven buildings.

The deal marks the end of an era for one of Los Angeles’ most celebrated office developers, MPG Office Trust. Founded by Robert F. Maguire in the 1960s, MPG was the best-known builder of top-flight office space in Southern California during the construction boom of the 1980s and 1990s.

Brookfield has eyed MPG for years. The deal “provides the opportunity to combine and operate a sizable portfolio of the highest quality assets in a major U.S. gateway city,” shares Friedrich.

To buy the four MPG towers, Brookfield created a fund with unnamed institutional partners to buy and reinvest in Brookfield’s Los Angeles assets. In all, the institutional partners have committed $600 million to the fund, which said it was putting in an additional $140 million for the deal.

While the Westside has been dubbed Silicon Beach because of the recent influx of technology and entertainment companies, the downtown towers have been dependent on financial firms, which are contracting. According to the L.A. Times, overall vacancy in the business district was 21% at the end of the first quarter, almost two percentage points higher than it was a year ago,

“We are being realistic about the downtown market,” he said. “It’s going to be a slow, steady improvement,” offers Brookfield CEO Dennis Friedrich.

With MPG’s departure, Brookfield will become the dominant operator of prime office space in the city’s financial core and play a major role in setting rents in downtown Los Angeles.

Brookfield owns $23 billion worth of office properties in some of the largest cities in the United States, as well as Australia, Canada and the United Kingdom.

We’re here to help you with your real estate needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

http://www.latimes.com/business/money/la-fi-mo-mpg-to-sell-its-buildings-20130425,0,3897654.story?track=rss

http://www.latimes.com/business/money/la-fi-mo-brookfield-boss-20130426,0,2329482.story?track=rss

http://online.wsj.com/article/SB10001424127887323789704578444750509774718.html

http://www.socalofficerealestateblog.com/?p=2372

http://www.labormarketinfo.edd.ca.gov/

http://laedc.org/business-assistance/additional-resources/e-edge-newsletter/#1

http://assets.regus.com/images/2145/businesscentre/1_454x340.jpg

http://variantperceptions.files.wordpress.com/2010/03/untitled1.jpg

http://farm4.staticflickr.com/3096/2707736127_b72a645fa5.jpg

http://www.shelteringarms.org/calendar/images/BrookfieldOfficeProps.jpg

A LAWYER’S ADVICE ON LEASING OFFICE SPACE

April 20, 2013 on 4:50 pm | In Fascinating Information, Legal, Office Fodder, Uncategorized | 3 Comments

edited by Jodi Summers

We were poking around online, looking for interesting topics related to Southern California office real estate, and on the Remodeling website we found some interesting advice attorney Richard Feeley, president of Feeley Mediation and Business Law, in Marietta, Ga.

How long is a commercial lease?

Richard Feeley: It all depends on the location and the use. There can be a number of things involved in a commercial lease, especially since the space typically has to be built out for the tenant’s use. Some multi-year deals may include an allowance for those improvements. Thus, depending on the type of space and length of the lease, it may make good sense for the tenant looking to establish a commercial space to work with a commercial real estate agent to get the best deal and use needs.

Should leases have an Exit Clause?

RF: Some tenants might worry about getting out of their lease if their business activity doesn’t support the cost and they are reluctant to put their personal assets in jeopardy. Commercial leases, just like commercial credit accounts and other accounts, are highly connected to the ability of the business to cover the obligation.

For example, an established home builder with a good reputation in the community may have no problem obtaining a lease in the business name only that would not include personal guaranties. On the other hand, a tenant who is renting his first commercial space may very well have to personally guarantee the obligations under the lease if his company doesn’t have the assets or business history to support it.

What is the best way to establish business credibility?

RF: It is essential for the tenant to first establish his company as a legal entity (corporation, LLC, partnership, etc.). Then, it is essential that the tenant manage the financial and other aspects of that legal entity in a manner separate from his personal financial dealings. The longer and stronger credit and financial history the business entity has, the more likely a commercial landlord may lease a property without requiring personal guarantees.

Although, you didn’t need a lawyer or anyone else to tell you this, but if you’re running your business in an efficient, professional manner, you likely won’t have any issues finding the right commercial space for your company. Then again, if there are a number of foreclosures in your area, you might find a good deal on commercial property to purchase.

http://www.remodeling.hw.net/owner-issues/leasing-office-space-a-legal-opinion.aspx?utm_source=newsletter&utm_content=jump&utm_medium=email&utm_campaign=RDU_120512&day=2012-12-05

http://www.socalofficerealestateblog.com/?p=2323

http://www.aem.umn.edu/info/spotlight/construction312.shtml

http://www.builderonline.com/remodeling/victorian-victory-a-new-england-victorian-gets-a-stylish-and-sustainable-remodel.aspx

http://www.cds.org/News/Featured_Article.aspx

http://contentlead.com/news/consumers-use-the-web-for-legal-advice-are-attorneys-there-to-help

SOCAL OFFICE REAL ESTATE SNAPSHOT ~ APRIL 2013 ~ REASONS TO FEEL GOOD

April 1, 2013 on 6:20 am | In Market Snapshot, Office Fodder, Statistics, Trends, Uncategorized | 1 Comment

by Jodi Summers

1Q 2013 JOB STATISTICS

Job growth in the U.S. is accelerating. As of February, the U.S. had recovered 5.7 million – or 66% – of the 8.7 million jobs lost in the recession. Employment to its highest level in just over 4 years.

Reasons to feel good – In February 2013, employers added 236,000 jobs to their payrolls – the third time in the last four months that employment growth has exceeded 200,000. Over the last 12 months, the economy has added 2.1 million private sector jobs. At the rate of the last 12 months (165,000 per month), the economy will fully recover all the jobs lost in the recession in mid-2014.

Statewide, California’s unemployment rate held steady at 9.8% in January. A year ago, the unemployment rate was 11.0%. The Bureau Labor Statistics reported that the unemployment rate for Los Angeles in January 2013 had dropped 9.5%. Not so bad – our metro unemployment rate was 0.3% points lower than the state rate. (Try saying “state rate” 5x fast.) The unemployment rate in Los Angeles peaked in September 2010 at 11.9% and is now 2.4% points lower. Our post peak low was 9.4% in November 2012.

1Q 2013 OFFICE REAL ESTATE UPDATE

Jobs are not impacting office space as much as changing office trends. Tenants are downsizing their offices by adopting policies for sharing non-dedicated offices and implement technology to support their employees’ ability to work anywhere and anytime.

According to Norm G. Miller, PhD, a professor at the University of San Diego, Burnham-Moores, Center for Real Estate, four major trends are impacting the office market:

* Move to more standardized work space.

* Non-dedicated office space (sharing), along with more on-site amenities.

* Growing acceptance, even encouragement of telecommuting and working in third places, and

* More collaborative work spaces and functional project teams.

“Historically, under the old corporate hierarchy, everyone had their own assigned office or work desk and we saw utilization rates of 50% or so,” Miller observed. “Firms that have moved to sharing space are seeing much more efficient utilization rates of 80% to 95%, sometimes using conference space seats to handle unexpected overflow.”

“The average amount of leased space (per employee) has been shrinking,” continued Miller. “As of mid-2012 the average was 185 square feet per worker, well below the average space assumption in most office-demand models, and well below figures 10 years ago.”

“Ten years ago, 250 square feet per office employee was the gold standard in office real estate,” agreed Tim Wang, director and head of investment research for investor Clarion Partners “Today, that average has dropped to approximately 195 square feet…the long-term trend is clearly shifting towards efficient space usage.”

If office tenants used 20% less of the nation’s current office space < which has a total valuation of $1.25 trillion > that decrease in demand would represent $250 billion in excess office capacity. Although not imminent, current trends have many long-term implications for office building owners and investors.

Real Estate pundits feel optimistic about California’s office future. All six poled metro areas yielded index levels are above 50 and therefore are representative of an optimistic sentiment among developers.

As 1Q 2013 draws to a close, San Francisco has the highest composite sentiment index of 62. Silicon Valley and Orange County have the next highest index of 61. San Diego holds the fourth position with 59; Los Angeles and The East Bay follow with 57 and 56 respectively.

THE GOOD NEWS IS

The UCLA Anderson Forecast for each of these regions in California over the next three years is for a period is for economic and employment growth at rates which exceed the U.S. employment growth rate. California should have less excess demand in 2015 due to new projects just getting underway and adding space to the market. To be sure, the expectation generally remains for markets to be tightening.

http://www.labormarketinfo.edd.ca.gov/

http://laedc.org/business-assistance/additional-resources/e-edge-newsletter/#1

http://www.costar.com/News/Article/Changing-Office-Trends-Hold-Major-Implications-for-Future-Office-Demand/146580?ref=100&iid=327&cid=383F14EEE265B182474DA2442BACBBBF

http://www.socalofficerealestateblog.com/?p=2360

http://www.bizjournals.com/phoenix/print-edition/2013/03/29/real-estate-office-industrial.html?s=image_gallery

http://www.deptofnumbers.com/unemployment/california/los-angeles/

NEGOTIATING YOUR COMMERCIAL REAL ESTATE LEASE

March 20, 2013 on 11:51 pm | In Fascinating Information, Funny...Money, Investment Opportunities, Lenders + Vendors, Office Fodder, Statistics, Trends, Uncategorized | 1 Comment

By Rieva Lesonsky

Are you thinking of moving or expanding your business? Data from commercial real estate listing site LoopNet shows commercial real estate prices in the Los Angeles area are slowly starting to rise. While the economic recovery is still uncertain, market research firm IBISWorld predicts competition for commercial space will grow in the next five years. Follow these 10 tips for negotiating a commercial real estate lease.

1. Do your homework. Know the average cost of the type of commercial space you’re seeking-retail, office or industrial. A commercial real estate broker can show you historical data for the region, and you can research prices on websites such as CIMLS.com, CityFeet.com or LoopNet.com.

2. Determine your needs. Consider space, utilities, infrastructure, parking, storage, accessibility to major highways and more. Create a checklist of your needs and wants, specifying which are “nice to have” and which are essential.

3. Get professional help. Real estate brokers work for landlords and receive commission on the lease’s value, so while they can offer a lot of useful information, it’s also important to consult a lawyer. Get an attorney experienced in commercial real estate who can explain terms, advise you and help you negotiate.

4. Ask what the total cost covers. Cost per square foot is just the beginning. There may also be Common Area Maintenance (CAM) costs, property taxes, insurance, trash collection, repairs and utilities. Depending on lease terms, you may be expected to pay some or all of these costs directly, pay them to the landlord, or have them built into your rent.

5. Know what is permitted. Make sure you understand what uses the property is permitted for and that there are no zoning regulations or laws that could adversely affect your business.

6. Discuss improvements. If you need to remodel the property to suit your business (known as a “build-out”), be sure you understand what improvements can be made, who will pay for them, who will oversee the work and whether you’re expected to restore the space to its original state if you move.

7. Ask about subleasing. Getting the rights to sublease part or all of your space to another tenant protects you from breaking the lease if you must move unexpectedly. It also helps you cover costs if you’re leasing more space than you currently need in anticipation of growth.

8. Consider timing. You can generally negotiate better terms by signing a longer lease, but what if your business grows faster than expected and you need to move before the lease is up? A short lease with options to renew and a cap on future rent increases may offer the greatest flexibility.

9. Put it in writing. Before viewing properties, make a list of questions to ask the broker and landlord. Never negotiate based on a verbal offer. Get terms in writing and have your attorney review them. Commercial landlords generally expect you to make a written counter-offer, too.

10. Ask for what you want. In today’s economy, tenants still hold the bargaining power-so now is the time to ask for the extras you want. Who knows? You just might get them.

Rieva Lesonsky is founder and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Before launching her business, she was Editorial Director of Entrepreneur Magazine. Follow Rieva at Twitter.com/Rieva, read her blog at SmallBizDaily.com, and visit her website SmallBizTrendCast to get the scoop on business trends and sign up for free TrendCast reports.