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San Francisco Real Estate Law Blog

A commercial landlord’s motto: Be prepared!

The life of a commercial landlord can be financially rewarding as long as you are prepared, know what you’re doing, and have solid relationships with tenants.

Always, always anticipate problems. This strategy can help you avoid them. You don’t want any problems to surface as a result of an oversight on your part. There are so many issues for which a commercial landlord must be on the alert.

Commercial real estate property purchased for $138 million

A new office building that only Visa currently occupies was recently purchased in California. The piece of commercial real estate was bought with all cash in Palo Alto, not far from San Francisco. The recent real estate transaction is an indicator that investors are hungrier now than ever before for commercial properties in the Silicon Valley area.

Investors purchased the facility for a whopping $138 million, a rate of $2,165 per square foot. It appears that this purchase is the costliest deal in the Santa Clara County area so far this year. The building, which spans 64,000 square feet, was constructed in 2016.

Residential real estate market poised to grow in 2018

The year 2018 is expected to be a positive one for home buyers in California and other parts of the United States. Residential real estate experts said they expect more moderate increases in the prices of homes this year combined with increasing inventory levels. At the same time, unemployment is low, and consumer confidence is high, which translates to potentially more buyers who feel financially secure.

These are all signs that now might be as good of a time as any to make a home purchase. Particularly regarding home prices, they have increased during the past several years, thus pricing many buyers out of expensive areas. In fact, some experts warned that the United States was headed toward another housing bubble.

Residential real estate ownership may be impacted by new tax plan

The current landmark tax legislation has already passed through the Senate and Congress. Now, it is on its way to be signed by the president. A recent survey indicated that many Americans across the United States, including several in California, are nervous about how the law will impact the ownership of residential real estate. Even so, they plan to continue buying in the new year.

According to the survey, more than 53 percent of respondents said they had concerns about home ownership. In other words, under 25 percent of the respondents felt positive about being homeowners thanks to the new law. Those particularly concerned about the new law are the wealthiest of buyers, as their incomes will rise after taxes, which will make the currently competitive residential real estate market more competitive. The increased demand very well may cause prices to rise even higher in the near future.

Selling residential real estate along busy street is possible

Those who have homes near busy roads may naturally view their locations as a detriment during the home-selling process. However, selling a residential real estate property on a high-traffic street offers several benefits. In addition, selling such a house is indeed possible in California.  

One of the major benefits of marketing a house along a busy road is that the home will get plenty of exposure. In addition, some buyers may want the home because it may provide them with easier commutes to work. Furthermore, being along a busy street means having easier access to attractions such as restaurants and stores nearby. This may be particularly appealing to buyers who enjoy being able to take a stroll to a yoga studio or café a block away.

When a sale is not a sale

When real estate owners fail to pay taxes over an extended period of time, they risk losing that property to a government auction. That appeared to be what happened when a homeowner's association failed to pay the bill for the common areas on Presidio Terrace. Residents of the street were alarmed to discover that The city of San Francisco had auctioned off the street to a San Jose couple for the low, low price of $90,000. Rather than accept the sale as the result of not paying your taxes for 30 years, the association filed a lawsuit and asked the San Francisco Board of Examiners to intervene. A majority of the Board found their claims compelling.

Can you buy property from the city?

$50 million commercial real estate makeover involves Sears

An empty Sears store in California is bracing for a major makeover that will transform it from a general merchandise retailer to a luxurious place to drink, eat and work. This piece of commercial real estate in Santa Monica will therefore soon feature offices available for rent. In addition, a garden will be created atop the building's roof, and a new market hall will allow vendors to sell items such as clothing, books, food, drinks and more.

This new development will be called Mark 302. The renovation will cost $50 million and is an example of developers' eagerness to repurpose large stores left vacant by a retailer's insolvency. These sorts of renovations seem to be happening more in particularly desirable locations.

Residential real estate market different today from 2006

Ten years ago, the Great Recession took place after the real estate market crashed. Fast-forward to today, and data show that the current residential real estate market looks a lot like the one that triggered the recession. Still, there are many differences between the pre-recession market and the modern market in California and other parts of the United States.

First, unlike in the 2000s, lending standards are much more stringent. In fact, they are the strictest they have been in two decades. As a result, the median FICO score for home loans is 734 this year compared with only 700 back in 2006. These standards are in place because they play a major role in the real estate market's health.

Commercial real estate demand drives up prices

As California draws closer to legalizing marijuana, commercial land remains a premium item. In fact, commercial real estate that is cannabis friendly is now leasing for double or triple the amount that businesses have traditionally paid for them. This is good news for those who own such properties in the Golden State.

For instance, in one case, a man agreed to pay $5,000 per month for 10 acres, with under one acre of this plot being used to grow cannabis. If no cannabis were growing on this land, the property would have probably rented for just $2,000. Those in the marijuana industry must be willing to accept high rents and the competition that comes with purchasing these in-demand properties if they want to succeed in the industry.

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