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Tenant View – Part 4

Tenant Perspective - Part 4 4. Operating expenses Many tenants fail to adequately scrutinize and negotiate the language within the operating expense provision of the lease. If the language is vague or unclear, the landlord may have the right and take the opportunity to charge a tenant for items not included in a previous lease. This could mean an increase in management fees, advertising expenses and parking garage operations, even when the tenant is already paying for parking spaces. Additionally, utilities and basic operating expenses for buildings have been increasing steadily for the past...

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Tenant Perspective – Part 2

2. Playing monopoly The days of 50 to 100 different commercial landlords existing in a given submarket are over. Today, fewer and fewer players have stakes in the ownership of buildings. For example, Douglas Emmett, Inc. (NYSE:DEI) owns 53 percent of the class A office square footage in Woodland Hills, California. With few competitive choices for tenants, a landlord with market share can confidently and rapidly drive rents higher. Tenants can find themselves with only two options: renew and pay more rent, or move out of the market. Click Here for the 3rd factor. For more information or to answer...

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Tenant Perspective Part 3

3. Landlord net operating income With greater competition for key properties, prices are rising. Purchase prices increase, but institutional and private investors still seek to maintain their prior returns on investment capital. The primary goal is to increase revenue. Return is derived from cash flow, principal payments over time, and the ultimate sale of the asset. Net Operating Income (NOI) impacts both cash flow and the value of the asset. Base rent increases are not the only way a landlord can improve revenue. Increased occupancy, parking charges, specialized services including after-hours...

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Tenant Perspective – Part 1

FIVE FACTORS THAT COULD LEAD TO $5 COMMERCIAL REAL ESTATE RENTS 1. Rising interest rates: Rising interest rates and corresponding rental rate increases have a direct impact on tenants. Tapering off from its policy of quantitative easing, the Federal Reserve has reduced its purchases of assets from $85 billion to $75 billion per month. Further tapering is expected to cause interest rates to rise. Twelve months ago, 30-year mortgage rates stood at 3.2 percent. In April 2014, rates are up to 4.4 percent, and over the next few years we may see further increases of up to three percent...

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Tenants Perspective – Five Factors

The goal of this special report on the Five Factors That Could Lead To $5 Rents is to help commercial real estate tenants foresee their future rent or lease exposure and to communicate practical strategies to maintain, or limit increase in the cost of leasing space in the Los Angeles market and throughout the world. Click Here for Part 1 Click Here for Part 2 Click Here for Part 3 Click Here for Part 4 Click Here for Part 5 For more information or to answer questions please contact. Forrest Blake | Senior Vice President SVN | Commercial - DTLA 800 South Figueroa Street, Suite...

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Is More Sublease Supply The First Sign Of A Downturn?

APRIL 21, 2016 | BY KELSI MAREE BORLAND LOS ANGELES—Sublease space is up 10.7% from last year, and with rents continuing to rise, this could be signaling a change in the market, Forrest Blake and J.C. Casillas of NAI Capital says in this EXCLUSIVE interview. LOS ANGELES—The supply of sublease space is up 10.7% from the same time last year, but asking rents haven’t fallen, according to a report from NAI Capital that GlobeSt.com has obtained exclusively. The report shows that sublease available space has increased slowly over the past year, while rents have also continued to rise, and as a result,...

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Are Subleases Competing With Direct Leases?

APRIL 22, 2016 | BY KELSI MAREE BORLAND LOS ANGELES—The sublease office supply is rising, and it could mean that direct lease landlords will have to compete with their tenants, GlobeSt.com reports in this UPDATE to a previous story. LOS ANGELES—The increasing supply of sublease space may start competing with direct lease, according to research from NAI Capital. Earlier this week, the brokerage house gave GlobeSt.com exclusive access to a report showing that the increasing sublease supply may be an early indication of an oncoming downturn. In this update to that story, NAI Capital’s Forrest...

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The First Sign of a Downturn Is More Commercial Sublease Supply

Los Angeles County Available Sublease Space and Average Asking Sublease Rents in Los Angeles County.

Available sublease office space is on the rise once again in Los Angeles County. It is up 4.3% from the prior quarter and is 10.7% higher from last year. Click here to link to a full list of Los Angeles County available sublease spaces. Los Angeles County Available Sublease Space and Average Asking Sublease Rents. Sublease space is typically offered on the market at a discounted rate to entice a prospective tenant to take the space as is for the remaining term of a lease. A sublessor is motivated to put excess space on the market in an effort to recoup part of the cost they are on the hook...

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Los Angeles Available Commercial Sublease Space

The goal of this webpage is to provide an overview of Los Angeles available commercial sublease space.  There is both specific spaces and general market information. This market data was provided by the CoStar Group. Below are the spaces by cities with the largest amount of sublease space available. Below are the specific spaces that are available in the market. Please contact Forrest Blake at 310-850-2381 or fblake@naicapital.com to discuss the opportunities or schedule a tour. City Building Address Sublet Available Space Avg Rent-Sublet (Office) Agoura Hills 28118...

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Los Angeles Office Construction Report

LOS ANGELES OFFICE CONSTRUCTION REPORT Market Size: 405,859,462 SF Existing Available Space: 61,134,493 SF Space Under Construction: 3,369,527 SF Completed Construction in 2015: 1,924,821 SF Largest Project Under Construction: Office Plaza At Wilshire Grand; $1.2 Billion project: 356,141 SF Class A office space, 900 hotel rooms, 42,000 SF retail in Downtown LA. Being built by Korean Airlines Co Ltd. Largest Project Completed in 2015: Hollywood 959; Two building approx. 250,000 SF Class A creative office campus in Hollywood’s Media District. Built by JH Snyder...

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