STRETCH YOUR REAL ESTATE INVESTMENT > FORM A PARTNERSHIP

April 14, 2014 on 12:10 am | In Bravo, Fascinating Information, Funny...Money, Uncategorized | 2 Comments

by Naomi Shaw

A real estate partnership can be a lucrative venture for many individuals with a limited amount of money to invest. Forming a partnership will increase your working capital, and you’ll be able to buy properties you couldn’t afford on your own.

However, there are some significant risks that can come with forming a partnership. If you choose the wrong person or company to do business with, you could find that your investment quickly becomes a loss.

Before entering into any sort of real estate business partnership, make sure you do your homework on who you’ll be working with.

Knowing Your Partner

Entering into a real estate partnership with another person or company is something you should do only after you understand who you’re working with. While helpful to work with people you know and trust, there are some questions you should ask any person or company before considering a partnership.

●     How much money do you have to invest? How is your credit score?

●     How many properties do you currently own?

●     When do you expect to make a profit from your properties? Do you plan on holding properties for years or do you want a quick turnaround to leverage into other ventures?

●     Have you had other real estate partnerships in the past? Do you currently have other real estate partners? Do you have references to any past or current partners?

Understanding Your Partnership Agreement

Before you commit to any type of partnership, it’s essential that you come up with an agreement as to how the partnership is going to work. The most important things you need to discuss when setting up a real estate partnership include:

●     How partners will get paid and when. Do partners share profits or are profits tied to resale only?

●     What your responsibilities in the partnership are. Usually, one partner will manage properties while another is responsible for finding new properties. Of course, all partnerships differ. Defined roles are important.

●     Is the partnership going to be reviewed at certain times? Many partnerships review profits about once per year. After all, not all partnerships are worth maintaining if there’s no growth or profit.

Hire an Attorney

If you form a good partnership, chances are you won’t ever need to consult your attorney. However, you do need to hire a qualified attorney who will help you setup your partnership.

Trying to do it yourself will most likely leave big gaps in your contract, and unless you’re incredibly well versed in business partnerships, those gaps could create potential problems down the road when it becomes time to sell properties, split profits, or dissolve the partnership and its assets.

Hiring an attorney seems costly, but it’s going to cost you a lot less than a business partnership gone wrong.

A real estate partnership is often an excellent way to make more money than you ever could on your own while balancing the work that real estate investing takes. However, partner with the wrong person, and you could end up losing all of the money that you had to invest.

Do your homework and ask questions, and always set up a binding legal agreement that helps both partners understand how they’ll be working together and how they’ll be able to exit the partnership if needed.

Naomi Shaw is a freelance writer in Southern California. Real estate is something she is passionate about and she loves covering the many different facets of it in her writing. She works with Ovlix.com.

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http://www.socalindustrialrealestateblog.com/?p=2047

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NEW INDUSTRIAL REAL ESTATE / OLD INDUSTRIAL REAL ESTATE – A TALE OF TWO MARKETS

March 31, 2014 on 10:04 pm | In Charts + Statistics, Fascinating Information, Investment Opportunities, Market Snapshot, New Developments, Trends, Uncategorized | No Comments

by Jodi Summers

Why are industrial rents increasing while overall demand for purchasing properties remains comparatively soft and completions are rising? It’s a tale of two markets. Not warehousing vs. manufacturing – but big new performance warehousing vs. smaller, older properties.

The market for high-quality space in the Los Angeles area is already quite tight. Couple that fact with a dearth of available land and new construction, and voila, you have limited the market’s absorption capacity. Around town, the most desirable properties are already occupied. Leasing activity has become constrained as space-users shun less competitive and obsolescent facilities. As a result, net absorption has not been strong enough to push the vacancy rate down.

Smart developers are capitalizing on the tight market for high quality properties by introducing new product that satisfies the evolving requirements – just check out the chosen and speculation warehousing that’s gone up throughout the Inland Empire. In Los Angeles, custom construction as opposed to build-to-suit is yielding rising rents in existing, sought-after warehouse/distribution buildings and higher-than-average rents in newly constructed speculative space.

And that is how you get rent growth despite slowing overall demand.

Strong 4Q 2013 growth of 3.2% indicates a moderately healthy trajectory for the U.S. economy for the first half 2014. The pace of recovery in the warehouse/distribution market is expected to quicken this year. Reis expects asking and effective rents to increase 2.3% between 2.8% in 2014.

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http://nreionline.com/industrial/industrial-improvements-modest-2013-signals-point-healthy-2014

http://www.socalindustrialrealestateblog.com/?p=2110

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THE ECONOMY IS A GO

March 20, 2014 on 4:37 pm | In Bravo, Charts + Statistics, Economy, Government, Market Snapshot, Problem Solving, Trends, Uncategorized | 4 Comments

edited by Jodi Summers

Optimism is the result of January’s coincident indexes for the 50 states. The coincident index, compiled by the Federal Reserve Bank of Philadelphia, combines four state-level indicators to summarize current economic conditions in a single statistic.

The four state-level variables in each coincident index are:

  1. nonfarm payroll employment,
  2. average hours worked in manufacturing,
  3. the unemployment rate,
  4. and wage and salary disbursements deflated by the consumer price index (U.S. city average).

The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

In January, 49 states had increasing activity(including minor increases). This measure has been and up down over the last few years …

This map was all red during the worst of the recession. Fortunately, it is all green again.

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http://www.calculatedriskblog.com/2014/03/philly-fed-state-coincident-indexes.html#863cuOCPU41o2Hd6.99

http://www.socalindustrialrealestateblog.com/?p=2127

http://www.socalofficerealestateblog.com/?p=2526

SOCAL INDUSTRIAL REAL ESTATE SNAPSHOT MARCH 2014 ~ OPTIMUM CONDITIONS

March 4, 2014 on 9:51 pm | In Charts + Statistics, Fascinating Information, Investment Opportunities, Market Snapshot, Trends, Uncategorized | No Comments

by Jodi Summers

This is the window of opportunity is Los Angeles’ industrial real estate market. Purchase prices as still down, and industrial lease rates are climbing. According to Loopnet, the average asking rental rate per sq ft/year for Industrial properties in Los Angeles, CA as of Jan 14 was $11.00 – representing an increase of +8.9% year-over-year. County-wide, average rental rates in Los Angeles are +0.3% higher at $9.05 per sq ft/year for Industrial properties currently for lease.

Around LAX, in industrial areas like Inglewood, El Segundo and Los Angeles 90045, the volume of available industrial properties was down more than 12% in January. Supply is down, demand is up. The latest Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey show that clear economic improvement is generating new opportunities for profitable investment in industrial space across the state. Industry leaders, developers in all areas (with the exception of the Bay Area’s industrial markets) expect to accelerate development activity, tightening the commercial real estate supply.

The increased optimism in many sectors can be tied to job growth in California, especially along the coast, where jobs are being generated at a rate faster than the national average. The current expansion of employment is expected to continue into 2016.

The seasonally adjusted unemployment rate in Los Angeles County decreased over the month to 9.2% in December 2013 from the rate of 10.3% one year ago, notes the Employment Development Department. The California seasonally adjusted unemployment rate was 8.3% in December 2013, down 9.8% from December 2012. The comparable estimates for the nation were 6.7% in December 2013 and 7.8% a year ago.

There is also a strong outlook in the industrial markets for manufacturing and warehousing facilities that support California manufacturing, exports to Asia and Mexico, and consumer goods imported from Asia. With the emergence of the Eurozone and Japan from their recessions and the economic growth in China, there is an increased volume of trade though Southern California ports in particular, which may create an increased demand for warehouse space.

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.globest.com/news/12_796/sanfrancisco/industrial/Industrial-Lease-Rates-Continue-to-Climb-342759.html

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http://www.calmis.ca.gov/file/lfmonth/la$pds.pdf

IS IT THE RETURN OF FOOTBALL TO LOS ANGELES? RAMS OWNER BUYS 60 ACRES IN INGLEWOOD

February 22, 2014 on 9:49 pm | In Bravo, Fascinating Information, Lights…Camera…Transaction, New Developments, Property Wish List, Uncategorized | 2 Comments

by Jodi Summers

Here’s a great story of optimism, the revitalization of Inglewood and football in Los Angeles….Stan Kroenke, owner of the St. Louis Rams football team, has purchased land in Inglewood large enough for a new stadium.

The 60-acre piece of land between Hollywood Park and the Forum was previously owned by Wal-Mart, who sold it after being unable to get public approval to build a superstore on the site. Madison Square Garden Co., which owns the Forum, had planned to buy the lot for an estimated $90 million in order to acquire more space for parking and possibly additional development. However, rumor has it that MSG was informed by Wal-Mart at the end of 2013 that the land had already been sold to an unnamed party. (For the record, Kroenke, a former Wal-Mart board member and husband of Ann Walton Kroenke, daughter of Wal-Mart co-founder Bud Walton.) For years, Kroenke has owned a substantial amount of land in Southern California.

“It would not surprise me at all that there would be interest in a football stadium,” offers Inglewood Mayor James T. Butts. “We have been the home of sports teams before, and we have experience working with sports franchises.”

Some say Kroenke is merely using the land purchase in Southern California as leverage in negotiations with St. Louis officials over proposed improvements to the Edward Jones Dome, the team’s current stadium.

The Rams have been unable to work out a stadium deal in St. Louis, and, according to the terms of their lease, are able to move after the 2014 season. Last February, the Rams won an arbitration case against the St. Louis Convention and Visitors Commission concerning upgrades to the Edward Jones Dome. The commission proposed spending $124 million to bring the venue up to date, but the Rams said the necessary renovations would cost about $700 million.

Kroenke’s purchase of the L.A.-area land puts additional pressure on St. Louis to come to the bargaining table or risk losing its NFL team.

The Los Angeles Times notes that the plot isn’t enough to build both a stadium and adequate parking. An adjacent 238-acre site is owned by Stockbridge Capital Partners, which intends to transform the recently closed Hollywood Park Racetrack into a modern residential community named Hollywood Park Tomorrow, with development beginning this spring.

Inglewood is centrally situated near multiple freeways and the Los Angeles International Airport, he said. “If there is to be interest by the NFL, we have the most desirable location,” shares Mayor Butts.

A recent story in the Pasadena Star-News emphasized how the Rose Bowl might  temporarily host an NFL team, offering a buffer for any team looking to move to the Los Angeles area, allowing them play in Pasadena at The Rose Bowl while a stadium is built elsewhere.

The Rams began play in the NFL as the Cleveland Rams in 1937, then moved to Southern California and became the Los Angeles Rams in 1946, playing at the Los Angeles Coliseum and later in Anaheim until after the 1994 season, when the team moved to St. Louis.

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http://www.bizjournals.com/stlouis/morning_call/2014/01/has-kroenke-bought-a-new-home-for-the.html

http://www.bizjournals.com/losangeles/news/2014/01/31/st-louis-rams-owner-bought-inglewood-land-is-it.html?ana=loopnet

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THE PARKING GARAGE OF THE FUTURE

February 15, 2014 on 6:48 pm | In Fascinating Information, New Developments, Problem Solving, Property Wish List, Uncategorized | 1 Comment

by Jodi Summers

It may look like a Disneyland attraction, but this new automated garage, will allow you to store a lot more vehicles in a lot less space. The parking garage of the future, is now being tried in Santa Monica. It allows you to park a lot more cars in a lot less space because no driving is involved. 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.socalindustrialrealestateblog.com/?p=1665

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