KNOW THE LIFE OF YOUR OFFICE BUILDING SYSTEMS THE BENEFITS OF A RISK MANAGEMENT ASSESSMENT

January 29, 2014 on 9:44 am | In Office Fodder, Property Maintenance, Solutions, Uncategorized | No Comments

by Jodi Summers

We meet a lot of inspectors in the day-to-day business of real estate. As we were inspecting a 12,000+ sq.ft. office building with a buyer, it was obvious the property had experienced some significant deferred maintenance. As the inspector was pointing out rust blossoms in the pipes, and homemade electrical upgrades, we got to talking about office building preventative maintenance.

“It’s good for all buildings to have a risk assessment,” the inspector shared. “That way you know what you’re getting, about how long it will last, and it will give you an idea of how much it will cost you.”

A risk assessment usually includes an evaluation the 5 major systems involved in the day-to-day operation of a commercial facility – plumbing, electrical, heating and air conditioning, structure and roofing. Add to that any gear required for business specialization as well as obvious deferred maintenance issues.

A risk assessment examines three aspects of each of the 5 systems:

  1. Expected useful life left in each system.

2. Maintenance/Repairs that are needed immediately for each system.

3. Total costs that are expected over the next five years for each system.

After your inspection, your company will understand your projected expenses for maintenance, and you will be able to fit them into the annual budget…and everything is hunky dory.

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http://www.commercialrealestateinspectors.com/risk-assessment/

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LOS ANGELES IS AN EXAMPLE FOR THE ADAPTIVE REUSE OF OFFICE BUILDINGS

November 15, 2013 on 2:10 pm | In Bravo, Fascinating Information, Green, Historic Properties, Investment Opportunities, New Developments, Property Maintenance, Solutions, Trends, Uncategorized, Winning Properties | 3 Comments

Edited by Jodi Summers

Bravo to the City of Los Angeles. Through innovative public policy and creative private development, L.A.is demonstrating how older buildings can be repurposed and repositioned for the new economy while reducing carbon emissions.

Believe it or not, Downtown Los Angeles contains one of the nation’s finest collections of early 20th century architecture. Most of these buildings sat vacant for decades, until a carefully targeted Adaptive Use Ordinance (ARO) removed regulatory barriers, provided incentives, and helped make it possible to repurpose more than 60 historic buildings over the past 14 years as new apartments, lofts, and hotels.

But many more buildings remain empty or underused in the downtown area and nearby commercial districts.

A recent report from the Urban Land Institute and the National Trust for Historic Preservation’s Green Lab concludes that more than 10 million square feet of space in the city’s urban core is currently vacant. The report, Learning from Los Angeles, was presented to Mayor Eric Garcetti this morning, at an event organized by the ULI Los Angeles District Council. It describes strategies that build on the success of the ARO to unlock the economic and community development potential of underused older buildings. The report documents demolition, building, and vacancy trends throughout the city and recommends strategies for removing regulatory barriers, streamlining approvals, and providing incentives to make building reuse easier to accomplish.

Conversations organized by the Preservation Green and ULI Los Angeles identified key barriers to building reuse and recommend solutions to overcome these obstacles. The Los Angeles Conservancy, a key partner in this effort, served on the project Advisory Committee along with practitioners in real estate development, planning, design, construction, community revitalization, and local government.

Learning from Los Angeles is the first in a new series of research and policy reports being developed by the Preservation Green Lab through the Partnership for Building Reuse, a joint effort of the National Trust and ULI. Launched in Los Angeles in 2012, the Partnership for Building Reuse is designed to foster market-driven building reuse in major U.S. cities through dialogues with community stakeholders about building reuse challenges and opportunities.

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http://blog.preservationleadershipforum.org/2013/10/10/learning-from-los-angeles/#comments

http://www.socalofficerealestateblog.com/?p=2458

http://www.socalgreenrealestateblog.com/?p=3018

http://www.socalmultiunitrealestateblog.com/?p=2592

SOCAL OFFICE REAL ESTATE BLOG NOVEMBER 2013 – THE ADAPTIVE REUSE OF OFFICE BUILDINGS

October 31, 2013 on 8:54 am | In Bravo, Fascinating Information, Green, Historic Properties, Investment Opportunities, Market Snapshot, Property Maintenance, Solutions, Trends, Uncategorized, Winning Properties | 2 Comments

by Jodi Summers

You’ve heard about all of those fabulous loft conversions in downtown Los Angeles – old office buildings and factories that have been renovated into apartments and condos. That’s what’s happening with a lot of that extra office space…that’s in cool buildings.

In 2012, nationwide, office stock shrunk in a third of the 54 top U.S. markets. Buildings worth saving are being converted, while lesser buildings are being demolished. The result is that the net inventory has dropped by about 21.6 million square feet > or 0.3% of inventory. In Los Angeles, available office space has declined by -16.2% according to Loopnet.

Over the next four quarters, approximately 11 of the top 54 U.S. metros and almost half of the 1,400 submarkets in those metros will have a net loss of inventory.

Conversion to residential usage is the most prominent reason that an office building is removed from inventory. Condo and apartment conversions comprise 34% of the lost office space, according to CoStar. Additionally another 13% of office space has been demolished to make way for new residential construction.

In high density urban areas where housing is needed, multifamily repositionings benefit both owner and user. The ideal conversion candidate – transit-accessible office structures built circa 1930 with 22,000-square-foot floor plates.

For more information 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.

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http://www.costar.com/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464?ref=/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464&src=rss

http://www.marcusmillichap.com/Services/Research/Default.aspx#2

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http://www.loopnet.com/Los-Angeles_California_Market-Trends?Trends=TotalSFAvailableFS&PropertyTypes=Office

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PARKING FOR APPOINTMENTS GETS EASIER

September 22, 2013 on 6:34 pm | In Fascinating Information, Funny...Money, New Developments, Office Fodder, Solutions, Uncategorized | 2 Comments

by Jodi Summers

Don’t you just hate driving around looking for parking when you’re supposed to be in a meeting? A new automated garage, the kind of the future, is now being tried in Santa Monica. The “West Coast’s first automated parking garage” is moving cars around the UCLA Santa Monica Outpatient Surgery Center. Drivers can leave their cars at six bays, where a movable platform takes the car to a crane. The 8,000-pound crane then lowers the car onto one of six levels. Employees swipe their driver’s license or a badge to retrieve their cars, while the public will use a credit or debit card (the garage will open to the public when all the kinks are worked out). Usually the cars can be retrieved in two minutes and people seem happy with the system. “It breaks down sometimes, but when it’s working it’s really great,” according to one nurse.

One of the best aspects of the robot garages, other than never losing your vehicle or dealing with break-ins, is they hold more cars than a typical garage and can be built smaller. West Hollywood and Chinatown both have automated parking garages in the works.

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http://la.curbed.com/archives/2013/01/behind_the_scenes_at_samos_slightly_buggy_first_robot_garage.php

http://santamonica.patch.com/articles/debugging-santa-monica-s-first-robo-garage#photo-13012295

http://www.santamonicapropertyblog.com/?p=4802

SOCAL OFFICE REAL ESTATE SNAPHOT – SEPTEMBER 2013 – OPPORTUNITY ABOUNDS

August 30, 2013 on 8:04 pm | In Investment Opportunities, Lease Rates, Market Snapshot, Office Fodder, Solutions, Statistics, Trends, Uncategorized | 4 Comments

by Jodi Summers

The late summer lull in the Los Angeles office real estate market offers options for nearly all office investors. Savvy entrepreneurs are reaching for value-added strategies, while distressed office property opportunities continue to evaporate. Marcus & Millichap’s Third Quarter Office Research Report reasons that buyers are appreciating assets with breakeven revenue on current rent rolls and the potential for a 10% return, while loan underwriters remain squarely focused on current operating revenues.

The Third Quarter Office Research Report also offers the following highlights.

■ During the most recent 12-month period, deal flow in the Westside Cities climbed by 28%, as activity in the Class A sector more than doubled. The average square feet per transaction rose by nearly 50%. The median sales price was $398 per square foot, representing a year-over-year price increase of 4%.

■ Healthy improvement in operations, along with rising prices, put downward pressure on cap rates. During the past year, average cap rates were in the low-6% range, down 30 basis points from the prior period.

Surprisingly, office rents in L.A.’s Westside Cities are more than 35% above the county’s other regions…

■ At midyear, average asking rents for available space were $39.69 per square foot. By year-end 2013, average asking rents in the Westside Cities will reach $40.36 per square foot, an annual climb of 2.4%.

■ Rents for available Class A space were $41.78 per square foot in the second quarter, a 1.6% gain from last year. Class B/C asking rents were quoted at $35.53 per square foot in the second quarter, up 3.6% from last year’s midpoint.

High prices in the Westside Cities encourages buyers to utilize leverage when acquiring properties. As a result, rising interest rates could have a more pronounced impact on sales in the region. This is a benefit to the owner-users marketplace, who are taking advantage of SBA loans with interest rates under 5%.

For more information 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.

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http://www.marcusmillichap.com/Services/Research/

http://www.socalofficerealestateblog.com/?p=2424

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CALIFORNIA’S ECONOMY > GROWIN’, GROWIN’, GROWIN’

July 15, 2013 on 7:38 pm | In Bravo, Fascinating Information, Investment Opportunities, Market Snapshot, Solutions, Statistics, Trends, Uncategorized | 5 Comments

Edited by Jodi Summers

Bravo to us! California rates 6th on the list of the states with the fastest growing economies. Countrywide, gross domestic product (GDP) grew by 2.5% in 2012 after growing 1.6% in 2011. This is the most the economy has grown since 2006. Bravo to us! Nationally, manufacturing, trade and the finance and insurance industry made some of the biggest contributions to growth.

California, has been one of the most depressed economies in the country for years, has seen growth in its telecom, tech, financial markets and banks. But life is getting easier. Here is an update on our progress courtesy of 24/7 Wall St….

6. California

> GDP growth: 3.5% (tied for 5th highest)

> Real 2012 GDP: $1.75 trillion (the largest)

> 1-yr. population change: 0.95% (18th highest)

> 1-yr. employment growth: 1.99% (7th highest)

California has the largest economy of any state in the nation, at $1.75 trillion in 2012. The state also was among the most damaged by the housing crisis during the Great Recession. In 2009, California’s economy contracted more than 5%, and grew only 0.3% and 1.2% in 2010 and 2011, respectively. According to the Federal Housing Finance Agency, as of the first quarter of 2013, home prices in the state were down by more than 16% in the past five years, compared to 9% for the nation overall. While still high, California’s unemployment rate has declined in recent years, from 12.4% in 2010 to 10.5% in 2012. Also, through a mixture of tax hikes and spending cuts, California recently recorded a budget surplus. Just three years earlier, the state had faced a deficit of nearly $60 billion.

North Dakota wins the 2012 award with > GDP growth: 13.4%.

Read more: States with the Fastest Growing Economies – 24/7 Wall St. http://247wallst.com/2013/06/12/states-with-the-fastest-growing-economies/#ixzz2WCl6TxRK

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