Serving Bel Air, Benedict Canyon, Beverly Hills. Brentwood, Laurel Canyon, Los Feliz, Malibu, Pacific Palisades, Melrose, Santa Monica, Sherman Oaks, Studio City, Topanga, Canyon, Westwood & Hollywood Hills.

Name

E-mail

facebook Canyon News twitter Canyon News

Canyon News

Bel Air News

Beverly Hills News

Brentwood News

Hollywood Hills News

Laurel Canyon News

Los Angeles News

Los Feliz News

Malibu News

Melrose News

Pacific Palisades News

Santa Monica News

Sherman Oaks News

Studio City News

Topanga Canyon News

West Hollywood News

Westwood News

Woodland Hills

Celebrity News

State News

National News

World Headlines

Deaf News

Entertainment

Film

Television

Music

On the Industry

Star Gazing

St. John's Confidential File

Theatrical Musings

Life & Style

Event Listings

Tech Talk

Looking Good For Lots Less

Spirit & Creativity

Miller Time

Books

View from the Hill

NY WEST

Chrystal's Recipe Corner

Career and Life Coaching

Gardening With Tony

Life According To Lenson

Real Estate Realities

Food

Sports

Marathon Running

Keeping It Bruin: A Look Into UCLA Athletics

Baseball

Basketball

Football

Hockey

Pets

Vi's Corner

Pet Tips

Point of View

John Armor

Message to America

Critic At Large... Ruta Lee

Labor Week

Ramblings

10 Degrees Cooler

McConnors corner

Edge of the west

The Physics Wizard

Auto

Kyle's Kars

Travel

Susan Michelle's Compass

Advice

Ask Deanna

Dear Lily

Ask Oona

Features

Dancing with Earthquakes

Archives

Sports Schedules

Traveling Beyond the Canyon

Edge of the West

Law Man

Ask Us

Nathan Tabor

The Angry Economist

Truth Probe

As I See It

Columnists

Truth Conquers

The Live Wire

Notes from Exile

Letters to the Editor

Dog Training by Anthony

Canyon Mews

Speak!

Sponsors

America's Most Wanted Dogs

World Recipes

Vegetarian Lifestyle

Humor

News Briefs

Local News

Books

News

Canyon Fodder

Bad Movie Night

Critical Projection

Ed's on the Town

Fitness Quests

Flashback Films

Stories of the Strange

Gourmet Grandma

He Said/She Said

Home Matters with Yvonne

L.A. Etch-a-Sketch

L.A. Ruminations

McConnor's Corner

Mommy Minute

Musically Speaking

My Back Pages

Publisher's Pages

ResourceINK

Scene and Heard in L.A.

Silly...But Wise!

Sunset Diaries

Table Options

The Paws Cause

TV Stuff

Cartoon of the Week



Real Estate Realities

It's A Good Time To Buy Commercial Property
Posted by David Rosenfeld on Feb 15, 2013 - 6:06:12 PM

LOS ANGELESA recession has its up sides and down sides. So when it comes to investing in real estate, there’s definitely an upside for the potential buyer. And for those seeking commercial real estate, whether it’s an apartment building, retail or office space, now is the time to buy.

CommercialProp_2_2.jpg

Finding a suitable commercial building is no easy task, but the fact that there are some areas with high inventory in that segment with motivated sellers, gives you, the buyer, an opportunity to make a solid investment for your future.  Commercial real estate can be especially profitable, but not for the squeamish so do your research and if you already own commercial real estate, you know the drill, so to speak. And if you’re a novice, find someone who has gone through the process and is experienced enough to offer you advice and help guide you.

It’s often said that commercial real estate is made for the sophisticated investor. And it’s true so do as much research as possible to help you determine whether it is right for you. Location is very important, as we all know, so be mindful of that when you visit a property. If a building is located too close to a freeway on ramp, for instance, where traffic gridlocks during rush hour, leaving potential customers unable to access the building, it can be a deal breaker since it cuts into potential revenue for your tenants and for you if they go under or leave altogether.

As part of your research you’ll get a lot of useful information from the seller, especially about revenue, taxes, expenses and so on. So it’s important to ask for the actual numbers or a Schedule E from last year’s income tax report where the figures are broken down into their proper categories.

Financing requirements for commercial properties is also a little different than if you were to buy a home. A buyer is required to put a minimum of 35 percent down instead of 3.5 percent required to buy a single family home. The reason is that the loans tend to be much larger and the risk is higher for banks who want to ensure their investment will be sound.

On a given day, you may drive around any main drag and you’ll see lots of retail buildings sitting vacant and seemingly for sale. While many are in the market, many others are not as part of a greater strategy by their owners who are betting on an upturn in real estate. In Santa Monica, for instance, there are a number of commercial buildings along a major street that are vacant since their owners are unwilling to lower the rents to attract tenants. By lowering rents, they would be forced to lower rents on their other properties resulting in an overall revenue drop for the building owner.  So it makes sense to keep the buildings vacant even if they are losing money.

It also makes sense to find out if a property has a revolving door of tenants coming and going. It’s often a sign that the rents are too high and that the location may also be an issue.

Refurbishing and upgrading costs are also higher for commercial properties since building and safety codes are more stringent for commercial buildings versus single family homes due to the fact the general public would be using the facility in large numbers.  So if major repairs are required, be sure to find out just how much they will cost before taking the plunge.

Oftentimes, you can add value to a building with a needed facade repair, upgrade or some cosmetic changes that will draw tenants and customers alike. In these instances, the upgrade will work wonders for your bottom line.

These days with bad news coming out of many segments of the economy, it’s good to know that real estate can still offer great value and a great investment opportunity.

David Rosenfeld is a Real Estate broker and president of Advantage Real Estate, a Real Estate and investment firm in Santa Monica, and a Rotary Club member. He has more than 20 years experience in commercial and residential property investments and financial counseling. He can be reached at 310 450-4488 and at dr@advantage-realestate.com.



 

Cliffside Malibu

-------------------------

-------------------------

 

Serving Bel Air, Benedict Canyon, Beverly Hills. Brentwood, Laurel Canyon, Los Feliz, Malibu, Pacific Palisades, Melrose, Santa Monica, Sherman Oaks, Studio City, Topanga, Canyon, Westwood & Hollywood Hills.