San Fernando Valley 3rd Quarter Office and Industrial Market Report

All-around improvements show stability, but growht still elusive

Office - Full Report

Market sees little change as leasing remains constant

Industrial - Full Report

Commerical Real Estate Debt Maturity A Huge Problem

An estimated $1.4 trillion in commercial real estate debt is set to come due between 2010 and 2014. As the maturity dates come closer to being due, lenders are trying to work out extention plans for borrowers, thus "amend and extend".

The Loyal And Wise Commercial Real Estate Investor

There is a difference you know between the loyal and wise investor. I just finished a conversation with an older gentleman, probably in his 80's and owns about 5 industrial properties in the valley.  But before the conversation could develop much further he said, "I work with x#$%^, in fact Eric I can't even give you my middle name without x#$%^ being involved.  He was probably too old to want to do anything in real estate anyways. So I moved on... 

I once heard from a very successful real estate investor in Los Angeles say (Portfolio of an excess of $500 million), "You want to know as many brokers you possibly can."   It's pretty simple; you never know when they will bring you the next bet opportunity FIRST. Should I remind you it's the broker who's on the frontline looking to uncover the property with the right story.  You always hope that when they find an interesting deal, they will immediately think of you first.

The best deals never hit the market and that's a fact! 

There are occasions when you find that one investors who will not do a deal without their own Broker and believe me they are far and few between. And most of the time there is something mentally wrong with them. There is however, a successful investor I know out there (Owns in excess of 50K multi-housing units) who has loyalty to a broker.  He's in a category by himself, and like I said mentally wrong.  But most of the deals that are executed by that one loyal investor would have already been shopped around by everyone else by the time it came to them.  They start to get that reputation. "The guy who's married to so and so". Oh, and please don't remind me of the investor who says his relative has a real estate licenses and wants a piece of the pie. Are you kidding me....

I truly believe loyalty if acted upon correctly is vital to succeed in the business, but any investor looking to grow their portfolio needs to be the wise about it.

San Fernando Valley Commercial Real Estate Thinks Out Of The Box

 "It's all about timing and luck".  Being persistent and when you make the next call, you hope to find your nut which is probably going to be disguised as a white elephant.  The question becomes, how are you going to crack it so that makes economic sense to the next investor? 

Industrial buildings in the west valley with 60's construction were built to suite the infrastructure of that era.  As you can imagine, office laboratory build out, development and testing quarters, and unique mezzanine space with double doors that drop off from the second floor and not to mention the clear height that changes from 12' 16' 14' 10.5' 21'.

Functionality is key in bringing in the right tenant to occupy a building.  So how do we take a vacant concrete box erected in the 60's and bring it to functioning standards of today?  "Land value son", that's what I keep hearing.  Or can an investor think outside of the box and reinvent the way to look at these buildings keeping with functionality and return on investment?  How about from the tenant representative angle, can they conjure up some ideal and unique functioning work space for those archaic build outs to tenants from around the world? I'm sure they can.

Industrial Live-Work Spaces (Downtown LA Brewery -http://www.the-brewery.net/),

Time and money always determine all the answers.  With the choices tenants have these days, most are looking for the bread and butter tilt-up 18'+ clear height with dock high loading and plenty of parking. Fresh carpet and new paint seems to always grab the eye of those on looking tenants.  And when tenants look, investors see that too.

Thank goodness for challenging times, it brings the best ideas to the table for the rest to follow.

Eric Nishimoto

Eric K. Nishimoto, an associate at Lee & Associates-LA North/Ventura Inc., a full-service commercial real estate company and member of the Lee & Associates group of companies, specializes in investment brokerage throughout the Los Angeles area with a focus in the San Fernando and Conejo valleys. A seasoned sales and marketing professional, Mr. Nishimoto’s real estate expertise includes the pricing, underwriting, leasing and sales of retail, industrial and office properties as well as the development of long-term investment strategies for his clients.