New Los Angeles Rams Stadium Spurring Major New Los Angeles Triple Net Retail and Residential Development

The new Rams stadium at Hollywood Park in Inglewood is stimulating massive new development such as 3,000 new residential units and 620,000 square feet of new nnn retail and net leased Los Angeles restaurant space.

Talk about a way to keep Los Angeles commercial real estate agents happy! It’s nice to have addition new net leased retail and restaurant space available.

The Los Angeles area hasn’t had a NFL team for 20 years, but the new Rams arena is isn’t all that’s happening at the old Hollywood Park site. The residential and retail component of the development has been in the planning stages for over a decade.  Like most projects, it was delayed by the great recession due to the lack of construction financing.

The 238 acre Hollywood Park site was acquired by developers Wilson Meany and Stockridge back in 2005, but construction didn’t begin until 2014. The Rams arena is the newest addition to the project.  The project is expected to be completed in 2023 with a possible Super Bowl in 2020.

The development and arena will be mighty cool when flying into LA at night if you’re on one of those 1,500 flight coming into LAX daily, especially the giant billboard on top of the arena. The developers are doing everything they can to see that this will be a very special welcome into Los Angeles.

It’s likely a little early to be looking for Los Angeles net lease restaurant or retail space in the development, but if you’re interested, I’ll do what I can to get the process moving. Call me, Scott Harris Realtor, 310-473-4789 for more information.

What’s Going to Happen to the Old Ikea Retail Site in Burbank

Big plans are underway for the old site now that the new 458,000 Square feet Ikea retail store is under construction. The new store will be the largest in the United States.  They will leave the old site at the net lease retail site at Burbank Town Center at about this time in 2017. So what’s underway for the old site?

Developer, Crown Realty and Development and CAPREF LLC have big plans: http://www.iheartburbank.com/  .  The plans are to add 765 apartments at 600 N San Fernando Blvd. and 70 condos for sale at 800 N San Fernando Blvd to the Burbank net lease retail center.  The center will also feature an open air plaza and 40,000 square feet of net retail space for lease for fresh retail tenants and maybe a farmer’s market.

No new Burbank residential multiunit housing has been permitted or built in the last 15 years, which added to the housing availability crisis. Not that it’s not the same all over Southern California.  I’ll wager that all of these new apartment and condo units will be sold or rented long before the construction is complete.

Looks like another solid project and we sure need the housing and new Burbank triple net retail space. The new net leased reatil space will sure make Los Angeles commercial real estate agents and brokers happy.

We’re still a ways off, but if you’re looking for nnn retail or restaurant space for lease, I’ll do my best to help.  Contact me, Scott Harris Realtor at 310-473-4789

1031 Exchanges – The Four Basic Rules

1031 Exchanges

Given the glut of triple net retail, single tenant, S&P BBB rated or higher, replacement properties that have come on market over the last couple of weeks, we have plenty of net leased Walmarts, Walgreens, CVSs, 7-11s, etc. available, and at decent cap rates with long 10+ year leases.

These are as perfect a 1031 replacement (upleg) property as we find so I thought it might be a good time to go over the four primary 1031 rules.

  • Rule # 1 Both the relinquished property and replacement property must be held for investment purposes or used in a business and be ‘like kind’.
  • Rule # 2 The IRS requires the investor to identify the replacement property or properties within the 45 ‘identification period’. The identification period begins the day of closing of the relinquished property. The replacement properties must be properly identified by the Exchanger.

There are two more identification rules under Rule #2. The exchanger may identify up to three replacement properties regardless of market value (Three Property Rule). Or they may identify unlimited number of properties provided that the total value not exceed 200% of the relinquished property (200% Rule). The minimum requirement is 95% of the value of the relinquished property

  • Rule #3 You must close on the replacement property the earliest of within 180 days of the closing of the relinquished property or the due date of the tax return or file an extension. And this is 180 calendar days … no time off for weekends or holidays.
  • Rule #4 On a delayed exchange, you must work with an IRS approved Qualified Intermediary.

For more detail regarding a 1031 exchange replacement properties, or referral to a Qualified Intermediary, contact me, Scott Harris, 310.473.4789 or 614.905.6614

Los Angeles Convention Center to Get Redesign of the Redesign.

Los Angeles retail restaurant for leaseThe current Los Angeles Convention Center. although not that old compared to many in the country, is badly out of date. The convention business is big money and very competitive.

Plans to update the current convention center never seemed to work out in the past. The latest was an plan for LA Live developer, AEG, to do a massive remodel and expansion as part of the NFL stadium that was to built nearby.  When that failed, Los Angeles decided to hold a design competition to do it themselves.  They selected a design team headed by HMC Architects and Populous.  LA also approved a $470 Million bond funding plan.

Now they’re considering shelving that plan and going much bigger through a public / private partnership. The City of Los Angeles will hand over the project to a well qualified private developer to finish it off.

This will breed more Los Angeles downtown net lease retail and restaurant development. That’s where we Los Angeles commercial real estate agents and brokers come in.  It also means even more hotels and high rise multi unit development as if LA doesn’t have plenty of that in the pipeline already.

Los Angeles has turned into one great development after another. This is exciting stuff.

Los Angeles Ram’s New Stadium YouTube Fly through

On the LA Rams YouTube page is a video fly through of the new NFL stadium that I thought might be of interest to a few of my readers.

The new $2.5 billion stadium is supposedly the most expensive in the world. It features a see through roof and seats for over 70,000 plus standing room only for 100,000.

It will be another couple of years before the stadium is complete so the video will have to do for now. Stadium was scheduled for completion in 2018, but due to El Nino they are considering delaying construction until May or June of 2016, delaying completion until 2019.

A big benefit, in addition to the first NFL team in LA in a very long time, will be a major increase in commercial development in the area, from new single family residential to condos and apartments, and of course new Los Angeles triple net retail and restaurant space for lease.

It’s a little too early to start thinking about lease-up for retail or restaurant space at the stadium, but if there’s is anything else I can help you with near the future stadium, call me, Scott Harris Realtor at 310-473-4789.

Downtown Los Angeles South Park Car Wash to be 60 Story Mixed Use Tower

Los Angeles commercial real estate agentsLos Angeles South Park | 60 Story Mixed Use Tower

We’ve been hearing rumors for a very long time, and now that plans have been filed with the City of Los Angeles, we’re seeing the first illustrations of the planned 60 story mixed use monster. It’s to be built on the old car wash site across from LA Live and will include hotel, residential condos, office, retail and restaurants.

Although the building looks so thin that a good wind could blow it over, it will house 374 residential units, 373 hotel rooms, 33,000 square feet of office space and more than 65,000 square feet of downtown Los Angeles retail and restaurant space. Could there be a floor for some Los Angeles coworking space? Once again, making Los Angeles commercial real estate agents very happy to have new inventory available.

Car wash owner, Robert Bush, sold for $25 million in 2014 to developer Ben Neman who was the buyer and is the developer. Car wash owner paid $515,000 for the site back in the 80s.

Plans were just filed with the City of Los Angeles by architectural firm Nardi Associates.  Illustrations show how this is going to look.  Nardi describes it as a giant urban tree with its diagonal grid like design complete with open air atrium, LED signs and live plantings.

Preliminary lease up will begin as soon as they get final approval so if you’re interested in the retail or restaurant space, feel free to give me a call, Scott Harris Realtor, 310-473-4789.

http://urbanize.la/post/first-look-60-story-dtla-car-wash-killer

Massive Mixed Use Project Coming for Olympic and Bundy in West Los Angeles.

new west los angeles triple net retail restaurant space for leaseThe five acre Martin Cadillac GMC dealer that’s been on the corner of Olympic and Bundy for 40 years will soon be replaced by a big new seven story 516 residential unit, apartment and or condo complex, and 10 story office with 81,000 square feet of net lease retail restaurant space plus three levels of underground parking for 1,876 parking spaces.

Los Angeles and Santa Monica commercial real estate agents will be happy to have some new net leased retail and restaurant space for lease.

The south side of the property along Olympic will see a new ten story office tower with 192,000 square feet of office space and 26,000 square feet of retail at street level.

This will be one block from the Expo Line extension in West Los Angeles.

Current owner, Dana Martin and family, will be the developer.

The new Cadillac GMC dealer will occupy the southeast corner of the ten story office tower.   I bought five cars from them over the years so I’m happy to see that they’re continuing in the new building.

If you have interest, I’ll be happy to help. Call me, Scott Harris Realtor, 310-473-4789.

Los Angeles Apartment Occupancy Rates Driving Rent Increases

Los Angeles commercial real estate agentNot that it isn’t obvious enough already, but take a look at the article that I found today in Curb LA regarding Los Angeles metro apartment rent increases versus vacancy rates.

This is a big boom to Los Angeles commercial real estate agents and landlords and not so good for tenants.

Citywide, rents are up an average of 7.8% over last year to an average of $1,873 per month.  Northeast San Fernando Valley prices are up 15.1%.   Los Angeles single family homes prices have increased 5.2% and incomes 2.9%.

Take a look at vacancy rates.  That explains everything.  When you see vacancy rates down to the 1% and 2% range, the sky’s the limit on rent increases.

In spite of all the new multiunit residential construction, and there’s a bunch, we need more and denser.   Los Angeles has over 15,000 units under construction right now with half of all new supply is coming online downtown.  Notice that downtown has the second highest vacancy rates and one of the slower rates of rent growth so there’s obviously a connection there.  We’re going to need to out build the population increases to keep a lid on rents.

Great thing is that all of the new mixed use high rises that are going downtown, and along the Wilshire corridor, will include street level net leased retail and that’s where I come in.  Los Angeles and Santa Monica commercial realtors are happy folks right now.

http://la.curbed.com/archives/2015/11/los_angeles_rents_2015.php

As always, if anyone is looking for triple net retail or restaurant space to buy or lease, feel free to contact me, Scott Harris at 310-473-4789.

1031 Buyer Requirement – Triple Net Retail or Absolute Net Retail, National Credit, Single Tenant – $1.3 to $2.6 Million

California exchanger in day 4 of 45 day identification period looking for triple net retail properties for sale or absolute net retail investment.  $1.3 mil needs to be replaced to $2.6 mil under the 200% 1031 rule.

Must be credit tenant, preferably single tenant, NNN, triple net leased retail with at least seven years unexpired left on net lease.   Corporate net leased retail properties for sale such as single tenant 7 Eleven, Circle K, Get Go, Turkey Hill, KFC, Chipotle, Panera Bread, Taco Bell, Walgreen, CVS, Tractor Supply, Auto Zone, NAPA, Advanced Auto, etc. is fine.  Fast food and fast casual fine if corporate lease.

Again, relinquished property closed four days ago the clock is running and will have 41 days left in the 1031 45 day identification period.

California, Los Angeles or Santa Monica commercial real estate agent  / broker /principal with property  that meets above requirement call me, Scott Harris at 310-473-4789, 614-905-6614 or better yet, email to scottharrisrealtor@gmail.com.

Retail Lease Basics

I get questions from both proprietors starting a new concept and looking for a new space to lease and investment buyers looking for net leased retail properties to purchase so I thought it would be a good time to review the basic lease types. I’m certain that most Columbus commercial real estate agents get the same exact questions

The corporate backed, investment grade, single tenant, triple net retail lease has been one of the hottest segments of the market over the last four or five years. So hot in fact that cap rates have plummeted to record lows in just about every market in the country.   Los Angeles commercial real estate agents, buyers and tenants have seen cap rate plummet to sub 4%.   Columbus commercial real estate agents in what little we have to sell here that’s newer, single tenant, net leased, credit tenant are seeing asking caps in low to mid 5% range.

First, what does investment grade or national credit really mean when coupled with single tenant, triple net ? The commercial real estate flavor du jour is a retail, single tenant, single parcel with national credit – meaning S&P BBB or the Moody’s equivalent, Baa3 or higher, long, triple net (NNN) lease. What they are really asking for is an absolute net or bond lease where there are no landlord day to day responsibilities.

But what do these acronyms really mean – NN, double net, NNN, triple net, bond lease, absolute net, modified gross and etc.? Regardless of what the seller or listing agent labels the lease, it is imperative to read the lease thoroughly at the earliest opportunity and have a real estate attorney licensed in the state where the property is located, review the lease. Remember, the devil’s in the details. Also keep in mind that the perfect lease doesn’t exist.

Back to the flavor du jour that I mentioned in the third paragraph – approach the analysis of a triple net leased investment with the idea that the buyer is purchasing the lease rather than the building and land.

Because definition of triple net leases differs, be sure you understand what’s in and what’s not in the lease. Get your hands on the lease as early in the process as possible to save time and money later. If you can get it prior to making the offer or in the offer counter offer stage, that’s even better. Best to find that one paragraph that knocks the property out of contention before you start spending money on due diligence such as inspections, surveys and appraisals.

A net lease generally refers to an arrangement where the tenant pays all or almost all of the property’s operating costs in addition to rent. There are a number of gradations of a net lease so I’ll cover the broad categories from strongest to weakest.

Bond or Absolute Net Lease. The tenant is responsible for everything – all operating expenses, maintenance, repairs and replacements for the building and site without limitation without limitation.

Triple Net (NNN) Lease. These leases follow the above except that capital expenditures, especially toward the end of the lease, are the landlord’s responsibility. You commonly will see leases that are labeled triple net are in fact double net in that the landlord is responsible for roof and structure. As I’ve said above a few times, read the lease and have a real estate attorney licensed in the state where the property is located review the lease.

Double Net (NN) Lease. Follows the above except that landlord is responsible for structural components of the building such as roof and load bearing walls, but also could include parking lot, plumbing and electrical.

Modified Gross Lease. The tenant pays its own utilities, interior maintenance, janitorial, small repairs and insurance and the landlord pays everything else.

Big Retail and Apartment Development for Hollywood’s Donut Time District

Developer, AvalonBay, spent $100 million to buy six acres of land around Santa Monica and Las Palmas for a huge 695 unit apartment complex complete with another 25,000 square feet of ground floor net leased retail space according to Los Angeles Business Journal.

Los Angeles commercial real estate agents will be pleased to have some new triple net retail and restaurant space coming on market.

Expect the choice of tenants to create a bit of a self-contained community with the selection of retail and restaurant tenants. Plus a development this size should spur the gentrification of the Highland and Santa Monica area. It could use it.

Colliers International will be the landlord leasing agent for the triple net retail and restaurant space.

The project will be built on the site of two old Hollywood Nightclubs, Arena and Circus Disco. The owner, Gene La Pietra tried to develop the property himself, but couldn’t get the financing necessary to put it all together. I talked to him about this ten plus years ago. He did get the city approvals though so that will hugely reduce the amount of time it will take AvalonBay to get permits and start construction.

No one that I’m aware of has seen any architectural renderings yet, but I have little doubt that this will be a great project. Expect completion sometime in 2017.

Los Angeles Downtown’s Broadway Trade Center Revamp

los angeles net leased retailWow, look at this. A massive conversion of this massive 1908 property is on the way soon. Waterbridge Capital bought the property last year for $130 million

The 1.1 million square foot Broadway Trade Center opened in 1908 and even had a 1,000 seat theater and a rooftop garden, although much smaller than what is to come.

To be developed, will be a 200 room hotel, 500,000 square feet of office space and 200,000 square feet of high end, net leased Los Angeles retail and a bunch of polished casual restaurants and bars.

There will be a green multilevel rooftop with a pool, restaurants and bars. Pics brought to you by Urbanize LA and Los Angeles Building and Planning.

If you’re looking to lease up triple net retail or polished casual restaurant space, don’t be shy, give me a call, Scott Harris at 310-473-4789

los angeles net lease restaurant and bar

Another huge project for Los Angeles’ South Park

shenzhen%201This is just amazing. Another mega project for LA’s south Park with a newly announced multi tower project with high rises up to 42 stories to be located at Olympic and Figueroa all the way to Eleventh and Flower.

China’s developer, Shenzhen Hazens Real Estate Groupis currently in the ntotlement process on the Gensler designed project, which they estimate will take a year to 18 months.

The first phase of the project will be the 30 story, 250 room hotel, plus another 30 story condo building. They anticipate that construction should begin in 2017.

The second phase will start immediately after with a 42 story condo tower plus an 80,000 square foot shopping plaza complete with Los Angeles net leased high end retail boutique shops.

Total cost of the project is expected to be in the range of $700mil.

Although it’s probably a little early to inquire about leasing some of the retail space, feel free to contact me, Scott Harris Realtor at 310-473-4789 with any questions.

 

 

 

 

Los Angeles’ South Park New Developments in Progress

In my 30 years in LA, never did I think I would see something like the following happening.

South Park, roughly defined as southwest of the Arts District, south of downtown Los Angeles, east of the 110 and north of the 10, has 28 new developments in progress.

Historically, what is now known as South Park got its start after the opening of Staples Arena 15 years ago at Figueroa and Eleventh, but most of the this got started less than five years ago.

This is remarkable in what used to be parking lots and run down 80 year old warehouses.  Take a look at the following link:

http://la.curbed.com/archives/2015/04/south_park_development_map.php

And remember, any questions regarding leasing some of that ground floor retail space, please call, Scott Harris Realtor at 310-473-4789.

 

Another Mixed Use High Rise For Los Angeles Core

Los Angeles downtown retail space for leaseThis one at 33 stories in the Los Angeles historic core will contain 320 market rate apartments plus 22 very low income units and 86 workforce housing units. Still not sure what ‘workforce’ means in terms of rent.

TCA Architects did the design work.  Pretty nice for Pershing Square.

The studios range in size from 407 square feet up to 602. The one bedroom run from 607 square feet up to 846 and the two bedroom from 1,085 up to 1,326 square feet. so it sounds like pretty decent sized units. Rents haven’t been released yet.

As always, there will be ground floor Los Angeles net leased retail. I believe it’s going to be right around 28,000 square feet in triple net retail space.

Parking is going to be an 8 story garage with two of that underground.

Developers are hoping for an improvement this year so work can begin in 2016.

Application filed with Los Angeles at the link.

http://dlanc.org/sites/dlancd7.localhost/files/4th%20Hill%20-%20Entitlement%20set.pdf

Los Angeles Downtown – Fig Central Breaks Ground

Los Angeles downtown commercial real estate developmentThe South Park mega billion dollar project, Fig Central, just broke ground on the 4.6 acre lot that’s adjacent to LA Live.

The project will have a five star Robert Cavalli hotel, luxury condos and 200,000 square feet of net leased Los Angeles retail space that will feature a covered open air shopping mall.  The hotel will be gloriously gaudy according to its designer Robert Cavalli.

Renderings were just released on official site (via Building LA) and I’ll post a few of them here to add a little color to my post.

The hotel and 164 condos will be in the 49 story north tower, which will also feature a Cavalli Club similar to the one begun in Dubai and is also in MIami, Milan, and Ibiza.  The two 40 story south towers will house 170 condos each with pool decks and sky lobbies in each.

The first two floors will be the open air mall with triple net retail and polished casual restaurants.  Next up on floors 3 through 7 will be 990 parking spaces for residents and shoppers.

The entire building will be wrapped in a enormous 23,000 square foot LED sign to make South Park look a bit like Las Vegas

Los Angeles Fig Central SkylineLos Angeles Fig Central

 

Los Angeles – Hollywood Park NFL Stadium Moving Fast

There just might be a new 80,000 NFL stadium on the site of the old Hollywood Park under construction by the end of the year.

St. Louis Rams owner Stan Kroenke announced last month that he’s joining Stockbridge Capital who was already building a mega project on the site with single family and multiunit residential, retail, hotels on the site of the old Hollywood Park racetrack. Kroenke will add a football stadium and entertainment venue to the site.  The area could use some new, fresh net leased retail. What’s stunning though is that they intend on beginning construction by the end of the year, and I presume they mean 2015.

How on earth is this going to happen that fast in Southern California? Kroenke and Stockbridge Capital are going to try to avoid the usual predevelopment process of a lengthy environment report and years’ worth of lawsuit from NIMBYs by putting the issue on the ballot in Inglewood for the required zoning change. They also are going to do an end run around the FAA by sinking the stadium 100′ into the ground to make it low enough to avoid the FAA scrutiny.

The developers do seem to have community support , which in the location, I don’t find surprising. They only need 8,400 signatures to put this one the June Ballot and they collected 20,000. My opinion is that they’re going to pull this off.

Santa Monica’s No Growth is Forcing Tech Firms Out

Santa Monica has a very active bunch of NIMBYs who will shut your new project down if they don’t like it, and that’s generally the case.

Tech industry has become the source for 25% of Santa Monica’s jobs and they’re doing their best to drive them out.

Google and Yahoo have already given up and are moving on to ‘greener pastures’ in Venice, Culver City and Playa Vista.   Santa Monica growth has stalled out as high tech firms search for rare office space and housing for their workers. As a result, rents have shot up.

In the past decade or so, the city has only approved 67,000 square feet on non-residential space and 230 multifamily units. Santa Monica’s NIMBYs are quite proud that they’ve shut down the long debated Bergamot Transit Village which would have brought 375,000 square feet of office space and 427 badly needed apartment units adjacent to the new Expo Line.

How long have they been working on the 2010 Zoning Code Update? They’re saying that they are going to wrap up discussions in February, but didn’t say what year.

Just keep it up folks until you’re back in decline as you were 30 years ago or so before the rousing success of Third Street Promenade.

 

 

Rick Caruso does Pacific Palisades

Pacific Palisades

The reimagining of Pacific Palisades’ Palisades Village has been underway for years by Rick Caruso, developer of The Grove and Americana at Brand.   Now the actual work is about to begin and is expected to be completed in 2017.

Palisades is one of if not my favorite Southern California suburbs, but had become a little stale over the last 30 years or so.  I figured the redo would end up looking much like the retail section of Montana Avenue in Santa Monica.  I had no idea that the remake was going to be this extensive.

Caruso plans for Swarthmore to become more pedestrian friendly, reducing it from four lanes to two with wider sidewalks and change parking from parallel to angled plus a new garage to increase parking from two per thousand to four places per thousand square foot of retail and office commercial space.

He also plans a modern remake of the 1948 Bay Theater and to create new storefronts for ground floor net leased retail with second floor office all around the village.  Also planned is considerable more community green space.

See the video below for more detail.

Pacific PalisadesPacific PalisadesPacific Palisades

 

 

New Six Story Culver City / Palms Mixed Use

West Los Angeles net leased retail and apartmentsBetter late than never is the story with this new ground floor net leased retail mixed use building with 131 apartment units above.  It’s on the northwest corner of Washington Blvd and Hughes Avenue in Palms, bordering Palms and Culver City.

Developed by NMS Properties with Architects Killefer Flammang in Santa Monica.  The building will feature 12,500 square feet of ground floor retail with a 131 market rate one, two and three bedroom luxury units above complete with fitness center, community lounge and theater, just like all the rest of what’s getting built.

This West Los Angeles mixed use retail / residential building was approved back in 2012 and was originally to be completed in spring of 2014, but that slipped to just opening in 2014.  Now it’s sometime in 2015.

They’re likely very busy given that they have 38 apartment communities in Southern California http://www.nmsproperties.com/Apartments/module/properties/

It’s all good though because the one thing we desperately need in Los Angeles, and especially West Los Angeles, is more apartments to keep a bit of a lid on rents.