The approximate 44,017 SF Orange County Industrial property sold in September 2020 according to public record.
5340 Argosy Ave in Huntington Beach, California traded for $8.71 million or $197.88 PSF according to public record. Details are forthcoming, for more information or to find out what your Huntington Beach Industrial property might sell or lease for contact Ron Mgrublian.
Proposition 15 proposes to remove the Prop 13 protection on commercial properties allowing for annual reassessment and potential drastic property tax increases.
The California Business Properties Association (CBPA) has developed a set of take action now resources on the Vote No on Prop 15 website. Included are social media resources, sample newsletters, letters to the editor guide, share your story, volunteer to text voters no on prop 15, and no on Prop 15 flyers in multiple languages. A few of the key points: Prop 15 increases the cost of living, threatens to make homeownership more expensive and increases rents on small businesses. The site also includes some in the flaws in the property tax hike initiative, ways to donate and a chance to read the initiative for yourself. See that and more at: Vote No On Prop 15.
With the possible passage of Proposition 15, would a Sale-Leaseback be good way to avoid paying a large property tax increase? With 1031 exchanges also possibly going away are Opportunity Zones the answer?
A new survey released points potential trouble for Proposition 15. An opinion survey by Probolosky Research shows 48.8% plan to vote against it, 41% for it and 10.3% are undecided.
Although this is goods news, there is still a lot of time between now and election day and a lot can change. Couple with that, Biden’s overtures that he might eliminate the tax deferred 1031 exchange, Commercial Real Estate Property owners still have a lot at stake this election.
One option to Commercial Property, Industrial and Warehouse owners who occupy their building is a sale-leaseback. A sale-leaseback not only allows the owner to enjoy an infusion of cash, but rental payments under the lease are usually fully tax deductible.
Aside from a 1031 exchange, another option to Commercial and Industrial Real Estate owners is deferring a capital gain to an opportunity zone fund. To learn more, see this post: Opportunity Zones: A Commercial Real Estate Capital Gains Tax Savings Instrument
To discuss further or anything else, Contact Me here.
Great 3 unit Industrial Commercial Real Estate Warehouse Building for Sale in Paramount, California that features individual fenced and paved yards.
INDUSTRIAL COMMERCIAL REAL ESTATE WAREHOUSE FOR SALE at 15343 ILLINOIS AVENUE, PARAMOUNT, CA 90723
PROPERTY FEATURES:
SIZE: ±9,400 SF Industrial Warehouse on ±15,001 SF Lot
PRICE: To Be Determined
ZONING: PAM2*
APN#: 6240-017-018
• Great Owner/User or Investment Property
• Multi-Tenant Industrial Building - 3 Individual Units With Private Fenced & Paved...
CLICK HERE FOR MORE INFORMATION
We will be voting on Prop 15 in November, if passed your commercial real estate property tax may go up and no longer have Proposition 13 protection.
As I mentioned back in April, we will be voting in California on the Split Roll Tax in November, now called Proposition 15. If you’re not sure what “Split Roll” refers to, see my post: Split Roll Tax And What It Means For California Commercial Real Estate.
A more recent update from AIR points out only a simple majority is required for the measure to pass. Recent polls indicate its likely to be a tight race, 53% of likely voters were in favor per the Public Policy Institute. Reassessments could begin 2022-2023 but a recent Press Telegram article indicated the assessor might not have the funds and resources necessary to implement it among other issues.
There is an exemption for properties less than $3 million, however owners who have multiple commercial buildings in excess of $3 million are not exempt. Properties would be reassessed at least once in every 3 years and the 1% base tax remains in place.
For more information, see the post on A.I.R Forms Practitioner: https://airpractitioner.com/2020/08/05/californias-controversial-split-roll-initiative-prop-15-the-basics/
Ron Mgrublian gets another Commercial Industrial Warehouse Real Estate deal done at 2148 W. 16th St. in Long Beach, CA.
Another Commercial Industrial Real Estate deal got done on a Ron Mgrublian - Lee & Associates listing at 2148 W. 16th St. in Long Beach, CA. The property a former food facility features floor drains and one ground level door. It also has a fenced and paved yard, close to the freeways & ports and is in the Cannabis Zone. If you have a commercial warehouse property you would like to sell or lease, please contact Ron at rmgrublian@leelalb.com. See brochure.
E-Commerce is one of the segments faring well in these times of COVID-19 as explained in the 2nd Quarter 2020 Long Beach - Los Angeles Industrial Real Estate Market Report.
While many parts of the economy are down right now, manufacturing, e-commerce and cold storage appear to be the segments doing well in Industrial Real Estate. Though vacancy rates remain at historic lows, there was a slight uptick from Q1 to Q2. Lease rates however remained unchanged, CLICK HERE FOR FULL REPORT
The COVID-19 pandemic has led to lower activity volumes and rates in the Orange County Industrial Market in the 2nd quarter of 2020.
COVID-19 drastically slowed Orange County Industrial Real Estate Market activity in the 2nd quarter of 2020. Vacancy rates ticked up and a slight decrease in lease rates was experienced. CLICK HERE FOR FULL REPORT
The San Gabriel Valley Industrial Real Estate Market still saw an increase in lease rates in the 2nd Quarter of 2020.
Despite the situation with COVID-19, the San Gabriel Valley Industrial Real Estate Market saw a decrease in vacancy rates and an increase in lease rates with Industrial Properties in the 2nd Quarter of 2020. The upward trend in rates is expected to continue as the effects of the virus subsides, but some re-trading is expected in the 3rd Quarter with Industrial Users. CLICK HERE FOR FULL REPORT
A Simple Example of How Leasing Commissions Are Paid to a Listing Commercial Real Estate Broker for Renting Your Property.
In regard to Leasing Commissions often get asked by landlords, “how do I pay you for leasing my commercial real estate property?” The short answer is a percentage of the rent consideration”. If you’re not sure what that means, I’ll give one simplistic example to explain.
Say I rent your property for 5 years for $10,000 a month. To determine the rent consideration, you multiply the total number of months by the amount due per month. In this case it would be 60 months (5 years x 12 months) times $10,000 rent a month which would give us a rent consideration of $600,000. You then take the rent consideration and multiply by the previously agreed to rate in the listing agreement. We’ll use 5% for simplicity’s sake in this example which would give you a total commission of $30,000.00 ($600,000.00 rent consideration x a 5% fee).
Typically, then the $30,000 would then be split by the broker representing tenant and the broker representing the landlord or $15,000 to each broker. The fee is an important sales tool as a low fee can discourage tenant brokers from presenting and encouraging your property as an option for their clients.
A good broker should also list your property on all the major listing services here in Southern California including, AIR, CoStar and LoopNet Premium. Additionally, marketing efforts should include mailers, cold calling, canvassing, email blasts, broker meetings, company website listing, intercompany communication systems blast, social media, the web, signs and 3D (Matterport) Virtual Tours.
Ron Mgrublian is a commercial real estate broker specializing in Industrial and Warehouse Properties with the Lee & Associates Los Angeles – Long Beach Southern California office.
These are some of the options a commercial real estate owner has when considering selling (including sale-leaseback) or leasing their property.
You have a few options when it comes to selling or leasing your commercial property. The most common options would be selling it, leasing it or doing a sale leaseback. There are positives and negatives to each option, lets run through a few:
Selling: When selling a commercial property, you will primarily come across two types of buyers, users and investors. The good news is investors are usually well capitalized, often are cash buyers, highly qualified and can close quickly. The downside is investors typically must pay less to make the investment numbers pencil. Additionally, investors are usually a lower risk buyer to the seller (high chance of closing and lower risk of falling out of escrow) and for that they get a discount (less risk less reward). Some industrial investors will start considering assets at the $5 million level and over and more at $10 million and over.
Users are buyers who intend to use the commercial property for their business. Due to the many benefits of owning your own property and typically being less qualified users can pay a higher price. The downside is users typically are less sophisticated and take longer to complete the transaction. You also run a higher risk of falling out of escrow with a user buyer (higher risk/higher reward).
One of the things to consider when selling is capital gains. You can defer your real estate capital gains through a 1031 exchange but there are some rules you must follow. You have up to 45 days to identify 3 potential replacement properties and 180 days to complete the purchase.
Leasing: Leasing your property is another option. The upside is collecting passive income, avoiding potential costly environment remediation issues and/or capital gains a sale may trigger. The downside is you must play landlord and deal with the many issues that brings. A few examples could be legal, maintenance and/or vacancy issues.
Sale-leaseback: Sale-leaseback could be another option if you would like to sell your property and continue to occupy all or a portion of it. A typical reason for this could be a cash infusion for the business, pulling equity out to deploy in other areas and more recently a way to avoid tax risk due to the potential passage of the split tax roll. A buyer for a sale leaseback would typically be an investor, so many of the advantages and disadvantages listed above apply. An investor for a sale-leaseback will typically want a longer term, however if the investor is primarily buying the property as an investment to lease to other tenants, they might grant a short-term sale-leaseback if you just need extra time to wind down your business or move it. The price of the sale is mostly driven by the rent you agree upon for a longer-term deal, so the higher the rent, the higher the sale price and vice versa.
SB 939 failed to advance through the Appropriations Committee today.
Just got word from A.I.R. SB 939 failed to forge ahead. During the Appropriations Committee hearing to today, the measure failed to advance. CLICK HERE FOR MORE DETAIL
