A brief writing. Industrial real estate related.
There are 3 major rail yards near Downtown Los Angeles, which is about 20 miles north of the Ports of Los Angeles and Long Beach. Truck drivers have the task of drayage to these destinations. Some containers make their initial trip off the cargo ship to these rail yards by way of train along The Alameda Corridor rail tracks.
Note how strong the industrial category is compared to the other commercial real estate property types. Office and retail are the two most vulnerable.
Moving forward with the slow decline in rents and values, industrial real estate is well positioned to weather economic challenges.
A Business Improvement District (BID) is a formally recognized non-profit organization dedicated to improving the quality of life in a defined region. BIDs vary in the supplemental services they provide, such as public safety, maintenance, marketing, and capital improvements. The efforts are funded by a special assessment paid by the property owners in the district. A BID is a public/private partnership, which allows governing bodies and property/business owners to unite in a collective effort for the maintenance, development, and promotion of their commercial district. They can help to manage vagrants and homeless encampments and all the filth and trash that they produce on city streets and sidewalks.
The Downtown LA Industrial District BID extends from San Pedro to Alameda Streets and from 3rd Street to Olympic Boulevard— a nearly 50-block area in the heart of Downtown Los Angeles. This area is the historic home of seafood, produce, flowers and a variety of products shipped in and out of Los Angeles by air, rail and sea. It’s also home to wholesalers, restaurants, cafes, and in more recent years startups and mixed-use retail/office centers.
The South Los Angeles Industrial Tract Business Improvement District was established in 2007 and has had a tremendous impact in improving the area. SLAIT, aka the Goodyear Tract, has a long history as a vibrant industrial district and looks forward to a promising future. It is one of the more active business districts in the City, with approximately $1.4 billion in sales, over 200 companies, and approximately 4,000 employees. The South LA Industrial Tract BID is a self-imposed, annually assessed, Business Improvement District (BID) comprised of 152 commercial property owners representing over 400 parcels. The BID was formed with the sole purpose of enhancing the industrial area primarily through safety and maintenance programs and is approximately 22 blocks; an area bounded roughly by Slauson Avenue on the North, Florence on the South, Central Avenue on the East and Avalon Avenue on the West.
The Arts District is a fiercely original, urban neighborhood, situated on the eastside of Downtown, boarded by the Los Angeles River and walking distance to Union Station and City Hall. The district is home to galleries, restaurants, creative office space, live/work lofts and upscale condos with a hip urban vibe. The streets are rich in character as local street artists have turned building walls into canvases showcasing their artwork. Many of the neighborhood’s business establishments are tucked into early 20th century warehouses and former factories. Institutions like the Hauser and Wirth Gallery, the Southern California Institute of Architecture and the Los Angeles Clean Technology Incubator help give the Arts District its distinct character.
The LA Fashion District Business Improvement District (BID) serves a 107-block area generally between 7th Street to the north and the Santa Monica 10 Freeway to the south, and from Broadway to the west and Paloma Street to the east.
The benefit of real estate investing boils down to the following four ways investors typically plan to make money on their real estate investment.
1. Cash flow
The primary purpose of those who purchase rental income-producing property is to rent out space in their asset in order to collect rental income. And cash flow is generated after the property’s operating expenses and debt service (i.e., mortgage payment) are deducted from that rental income. Thus, when more cash comes in than goes out, the result is a “positive cash flow” that becomes periodically available to the investor on a regular basis.
2. Tax Shelter
One of the primary benefits of owning rental income property is being able to legally reduce your annual or ultimate Federal income taxes with the following four tax deductions:
Of course there are nuances and exceptions in all tax matters that every investor should always discuss with a tax expert. But you get the idea.
3. Loan Amortization
Loan amortization signifies a periodic reduction of the loan over time. In other words, with a fully-amortized loan (i.e., not interest-only), each payment made reduces some amount of principal. As stated, home buyers enjoy loan amortization, too. But here’s the difference: with a rental income property, the tenants are virtually paying down the debt—and therefore helping the investor to buy the property—each time they pay their rent.
4. Appreciation
Appreciation is also not exclusive to rental income property because any real estate sold for more than its original purchase price would benefit from appreciation, whether it be a personal residence or office complex. With investment real estate, however, the owner doesn’t necessarily have to leave appreciation to chance the way a typical home owner would. The truth about real estate investing is that investors buy the income stream of a rental property. And as a result, the more income stream a landlord can generate (perhaps by lowering vacancies or reducing wasteful expenditures) the more they can expect their property to be worth; and the sooner they can impose these changes, the sooner their rental property is likely to appreciate.
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In 2020 this 42,000 square foot concrete tilt-up warehouse was leased to Southern California Curling Center. It was built in 1997 with 24 foot ceiling height with a total lot size of 75,000 SF in the industrial enclave of the City of Vernon.
The Hollywood Curling Club, a nonprofit for 13 years, is based in the Southern California Curling Center, which is quickly becoming the Western hub for the sport. Opened in August 2021, the center is a 42,000-square-foot converted warehouse featuring six “sheets” of “dedicated ice.”
Curling aficionados say the center is the biggest facility in the Western United States that features dedicated ice and sheets built and maintained exclusively for curling. The center provides the stones and hosts leagues, tournaments and corporate events, along with learn-to-curl training sessions.
2022-02-09 LA Times article
