Tag Archives: los angeles

CMBS Delinquencies Soar, Industrial Defaults Low Compared to Hotel, Multi-Family, and Retail


CMBS issuance, industrial, retail, hotel, office

The secondary market for commercial real estate is just beginning to show new life, with the first successful sale of a commercial mortgage-backed securities (CMBS) package in over a year and several new issues in the wings spurred by the strong investor interest on that initial offering. But the positives of renewed activity are tempered by more bad news on the performance of those commercial bond deals made before the freeze.

According to a new report from commercial research provider Trepp, delinquent loans in commercial mortgage securities jumped 85 basis points to 5.65 percent at the end of November. That figure is up from just 4.8 percent a month earlier.

The delinquency rate was highest in the hotel sector, where defaults skyrocketed from 8.67 percent in October to 14.09 percent in November. According to Trepp, the upsurge came from a single Extended Stay Hotel loan. Without it in the mix, the hotel delinquency rate would have increased only 64 basis points, to a little over 9 percent.

Based on Trepp’s analysis, delinquencies on multifamily CMBS loans rose to 8.78 percent in November, up from 7.66 percent the previous month. All other sector’s showed slighter increases. Retail edged up from 4.53 percent to 4.78 percent. Industrial increased from 3.18 percent to 3.33 percent. Office loan delinquencies crept up from 3.08 percent to 3.14 percent.

Trepp says there were $65.2 billion in CMBS loans in special servicing at the end of November, an increase of $8.2 billion, or 14 percent, compared to October.  There are very few CMBS related distressed properties in the Los Angeles area.  from dsnews.com.  image from wsj

Tips for Choosing A Real Estate Agent

Choose a broker who has experience in your immediate area.

There is no substitute for true market knowledge, which can only be gained through extensive transaction experience in a defined geographic area. It is, quite simply, the only way to acquire the market ‘intelligence’ required to drive the hardest bargain for a tenant or buyer. An experienced tenant/buyer representation specialist who works in your target market knows not only what is available in your market before anyone else, they know every landlord’s negotiating strategy, motivations, financial constraints, operating expenses and other key information he can use to your advantage. Be careful of tenant/buyer representatives who don’t specialize geographically as they must rely on unreliable and incomplete third party databases for market data.

Choose a broker who has experience in your particular product type.

The importance of specialization also applies to the type of property contemplated in the lease or sale transaction. There are stark differences between industrial, office and retail properties. The physical aspects of each are substantially different, as are the lease structures, term, conditions and operating expenses, among other things. For example, a full service gross office lease is a completely different challenge than a single tenant industrial triple net lease.

Contact an agent specializing in the Central Los Angeles region and industrial manufacturing and warehouse properties.  Extensive property listings provided upon request to qualified clients.

Rail Car MFG Building Anchors CleanTech Manufacturing Center

cleantechAnsaldoBreda is planning to set-up operations in Los Angeles to anchor CRA/LA’s CleanTech Manufacturing Center (CTMC). AnsaldoBreda will bring a new, sustainable facility and nearly 1000 middle-class jobs, as a result of METRO exercising its option to purchase light rail cars from AnsaldoBreda.

The CleanTech Corridor is a four-mile long district on the eastern edge of Downtown Los Angeles that stretches from the Los Angeles State Historic Park (formerly the ‘Cornfields’) at the northern end to the CTMC at the South, including both the east and west banks of the Los Angeles River. The CTMC is located at the intersection of 15th Street and Santa Fe Avenue in the downtown industrial core at the northern terminus of the Alameda Corridor Improvement Project and within the Central Industrial Redevelopment Project Area.

The project will consist of a 240,000 square-foot light rail car manufacturing facility on 14 acres of the CRA/LA-owned, 20-acre CTMC site.  The CTMC is a former Brownsfields Revitalization site purchased by CRA/LA from State of California in 2008 for $14 million with the goal of attracting job rich clean tech businesses to Los Angeles.

American Apparel To Continue Operations in Downtown L.A.

Clothing Maker Inks 10-Year Deal With Landlord Meruelo Maddux

The Downtown-based garment maker American Apparel has reached a 10-year agreement with landlord Meruelo Maddux Properties to stay in its 800,000-square-foot, Warehouse District headquarters, according to American Apparel financial filings.

Although American Apparel’s lease expired in December 2008, it has continued to occupy the pink factory building at Seventh and Alameda streets. The extension comes more than fourth months after Meruelo Maddux, Downtown’s largest landlord, entered bankruptcy.

Prior to reaching the deal, American Apparel, which employs about 5,000 workers at the 747 Warehouse St. factory, was mulling a move. The company considered an old Boeing plant in Long Beach, among other potential new homes, said their real estate broker.

“There were other considerations, other buildings to look at, but Meruelo stepped up,” he said.

American Apparel represents Mereulo Maddux’s largest tenant, both in terms of the size of its space and the value of its former lease.

Terms of the new lease were not disclosed.

American Apparel CEO Dov Charney said the lease was agreed to this month, but declined to comment further on the deal. Richard Meruelo, CEO of Meruelo Maddux, could not be reached immediately Tuesday afternoon.

In addition to housing almost all business operations, the factory has also served as a massive billboard for the company to promote itself and its progressive, often immigration-oriented political messages. American Apparel can also now safely cling to its various mottos touting its “Made in Downtown L.A.” cache.

The building’s sprawling parking lot is also known as the site of festive blowout warehouse sales that draw thousands of young buyers looking for discounted t-shirts, leggings, short shirts and underwear.   by Ryan Vaillancourt, Staff Writer, Downtown News.

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.