The real property tax rate in Los Angeles, California is among the lowest rates in the United States. See illustration below. The low property tax rate does factor into the high demand for property and real estate development.
Monthly Archives: July 2009
Forever 21 Purchases Two Large Buildings
Forever 21, the large garment manufacturer of young women’s clothing, has acquired two large buildings in the past year. The first building is the 370,000 square foot Overland Terminal facility at the intersection of Alameda St and Olympic Blvd in Downtown Los Angeles with a price of $20 M. This multistory building has parking and dock high loading. The second purchase was in the City of Vernon on Sierra Pine Ave. This collection of several Class B buildings totals near 130,000 square feet. Forever 21 was the tenant in the buildings and the sale price was approximately $6.5 M.
The company is based in Downtown Los Angeles and occupies several hundred thousand square feet of buildings at Alameda St and 20th St.
CMBS Defaults Coming, Haven’t Yet Arrived En Masse
2010, 2011 and 2012 will be difficult years with a significant number of commercial mortgages reaching the end of their five-year lifespans, but another set is coming due in 2015, 2016 and 2017.
About $185 billion of the $600 billion in commercial mortgage-backed loans issued between 2005 and 2007 are scheduled to mature between 2010 and 2012. It’s not only CMBS that market watchers should be worried about, because $1 trillion worth of commercial mortgage maturities will occur by 2012, including CMBS, bank loans and insurance company loans.
There are many hungry buyers sitting on the sidelines with cash ready to pounce. A limited number of them have been able to find bargains, but most of coming commercial real estate defaults will occur in Office and Retail, with Industrial markets holding better ground. The Central Los Angeles Industrial market has witnessed very few CMBS defaults at this time.