Los Alamitos Commercial Real Estate for Sale & Lease

Los Alamitos is Spanish for “The Little Cottonwoods”. This is one of the smaller cities in Orange County, California. It was incorporated in March 1960 and the last census indicated that some 11,449 people lived there as of 2010, which represents a small reduction since the previous census in 2000. Los Alamitos does not include Rossmoor, although it does use the Los Alamitos mailing address. Interestingly and confusingly, the Los Alamitos Race Course is not actually in Los Alamitos, but rather in Cypress.

Los Alamitos does have its own notable things, however. For instance, the USA Water Polo National Aquatic Center is located there, which is on the U.S. Military Los Alamitos Joint Forces Training Base. You also find the Los Alamitos Army Airfield in this city. Furthermore, in 1977, the very first Claim Jumper restaurant was opened in the city. This isn’t open anymore, so the location is now home to Hof’s Hut. Christian rock bands also congregated in Los Alamitos, going to Neverland Studios for their recordings when it was still there. Also, the original location for Tilly’s was Los Alamitos.

In terms of employment, the biggest employers in the city are the Los Alamitos Medical Center, Arrowhead Products, Trends Offset Printing, SuperMedia, Pharmacy Advantage, Bloomfield Bakers, the Systems Services of America, the Alamitos West Health Care Center, Timken, and MDA Information Systems.

Los Alamitos Commercial Buildings for Sale & Lease

Los Alamitos has an interesting economy, and one that many people may want to take advantage of. This can be done in a number of ways. First of all, there are those who are interested in purchasing commercial real estate (CRE) as an investment, looking to become landlords. Secondly, there are those who want to start and run their own business. These people may want to purchase CRE, or they may want to lease it. Choosing between Los Alamitos commercial buildings for sale & lease, however, is a very complex decision.

While it may seem that the only consideration to make is which one costs more per month, the lease or the mortgage, there is actually a lot more to it. Working out monthly costs is highly complex, not in the least because there are different associated costs, different renovation costs, different insurance prices, different tax advantages, and more. Furthermore, a lease requires a security deposit, and a mortgage requires a 30% down payment. This is also something that you should factor in to the overall payments you make.

It is very important that you consider every advantage and disadvantage associated with both leases and mortgages. It is best to do this with a team of professionals on your side, most notably a lawyer and an accountant. They can make sure all the legal and financial issues are in order and above board.

Los Alamitos Commercial Property for Sale

One place to start with comparing your options, whether you want to run a business or make an investmen is with trends in Los Alamitos commercial property for sale:

  • Multifamily properties in the county usually cost around $314,841.90, which is a 0.7% increase compared to the last quarter, and a year on year 10.5% increase
  • Office properties in the county usually cost around $311.66 per square foot. This is a quarterly decline of 0.2%, although a 11.3% year on year rise.
  • Industrial properties in the county usually cost around $222.13 per square foot, which equates to a quarterly rise of 2.7% and a year on year rise of 10.9%.
  • Retail properties usually cost around $408.88 per square foot, which has been stagnant over the past quarter. Year on year, however, this is a 14.5% rise.

Los Alamitos Commercial Property for Lease

For the vast majority of businesses, there is no option other than leasing. Because CRE properties are large properties, they tend to also be very expensive. Since a 30% down payment is also required in order to be accepted for a mortgage, most businesses struggle to actually achieve this. This is a lot of money, money that could also be used to grow or establish a business.

Assuming, therefore, that you will choose a Los Alamitos commercial property for lease, you need to start searching for a property. To do this, you need a broker. You will be happy to know that the broker fees are usually paid for by the landlord. However, as with everything about CRE, nothing is that simple. One issue is that you will have to decide on the type of broker. It may seem logical to opt for a tenant broker, as they work on your behalf and consider mainly your best interests. However, tenant brokers want you to sign a representation agreement, which means you can only work with them. That, in turn, means you can only see the properties that they actually have on their books, potentially limiting your options. The other option is the leasing agent, with whom you will not have to sign a representation agreement. This means that you could potentially enlist the services of a number of different leasing agents. The problem is that they place the interests of the landlord before yours. There is no right or wrong answer in terms of choosing your broker, and this is something that you are best off discussing with your accountant and your lawyer. Do remember that you must at least trust your broker to negotiate on your behalf once it comes to signing your leasing agreement.

Complexity of Negotiations

Negotiations are highly complex and can take a very long time. This is one of the reasons why you will not be able to find a property, lease it, and move in very quickly either. It is vital that you amend the contract in such a way that is actually right for your particular needs, which is what your lawyer and accountant can help with as well. Many people don’t know that they can negotiate every point on a lease, unlike with a residential tenancy, and landlords hope that this will work in their favor. In reality, however, you can negotiate on any point, including:

  • The length and extent of your personal guarantee
  • How much you have to pay each month for the lease itself, and what that would be based on
  • The kind of lease that is most beneficial to you (percentage lease, net lease, triple net lease, or gross lease).
  • The duration of your lease and what happens when it comes to an end.
  • The possible rent increases, what they are linked to, and how much is the maximum
  • Who will be responsible for maintenance
  • To what extent you are able to change the inside of the building and who will take care of the renovation costs
  • Whether you can signpost your store on the outside of the building
  • Whether you can sublease the space and, if so, under what conditions
  • What types of exit clauses are in place should you want to leave early
  • Your right to transfer your lease if you were to sell your business to a third party
  • Specific clauses such as exclusive use or co-tenancy
  • The amount of security deposit

Purchasing a Commercial Property

Clearly, leasing a commercial property is quite a complex issue. If you were to decide to purchase the property instead, you may feel that things are a lot easier. After all, you can do with it as you please, decorate it in any way you want (subject to building codes and local ordinances), sublease it to other businesses if you want to, and more. While you do have to contend with zoning, which means that you can only run certain types of businesses in the property, this is generally not an issue. It would be rare, for instance, for someone to want to run a chemical plant in the middle of a shopping mall.

However, the issue of the down payment is a significant one, and poses a serious barrier. While CRE is absolutely a good investment, and one that is likely to yield you high returns, the necessary capital may be unobtainable. Furthermore, owning CRE means you have to run it as well, either as a business owner or as a landlord. That being said, this is also one of its benefits: should you have an unsuccessful business, you could always become a landlord. Of course, being a landlord is a responsibility that not everybody is interested in either.

The solution, if you are adamant to purchase CRE, but not to run your own business, would be to invest in a commercial REIT (real estate investment trust). This involves pulling money together with other people in order to invest it in CRE, which is bought and sold with the intention of growing your investment. It means you never truly own a piece of real estate, but also that you don’t have to worry about the stresses of being a landlord and setting up lease contracts with third parties.

As you can see, every option has its own advantages and disadvantages, and they will apply to you in different ways. Make sure you consider them all before you come to a final decision on what to do.