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Buyers eye once cut-in-half building in downtown Los Angeles

As investors and residents are drawn to the remaining historic buildings in downtown Los Angeles, commercial and residential real estate in the area is set to boom. A case in point is the Commercial Exchange Building.

Constructed in the 1920s, the 13-story office building has long been vacant, but over 100 potential buyers have reportedly toured the structure in the last several weeks. According to one real estate broker, the building has caught the eye of "a lot of boutique hotels," but clearly other possible buyers are weighing their options.

The Commercial Exchange Building is currently on the market for about $14 million, and a major concern for any potential investor should be the structural history of the property. For example, the building was actually cut in half during the 1930s to accommodate the widening of Olive Street.

A 10-foot section of the structure was removed from its middle, and the western section was shifted east and reconnected with the other portion. Any buyer would do well to seek legal advice to ensure that the seller fully discloses the property's history. Similar transactions would involve the disclosure of any damage or other structural defects that might hinder the buyer's ability to safely add on or otherwise make changes to the building.

Failure to disclose such matters could lead to real estate litigation, and neither buyers nor sellers want that scenario.

The Los Angeles Times reports that some possible buyers are looking to convert the Commercial Exchange Building into offices, apartments or even student housing. Los Angeles investors with their eyes on the property will need to be fully aware of their legal options for a smooth transaction.

Source: Los Angeles Times, "Apartment, retail complex underway in Palms," Roger Vincent, Jan. 13, 2013

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