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Commercial real estate value up in East Valley

The U.S. economy's 2013 turnaround has brought back some once-lost opportunities for buyers and sellers of commercial real estate in Southern California. In Riverside and San Bernardino counties, for instance, commercial vacancies came to 5.84 percent in the first quarter of this year. That drop is quite significant when we consider that in 2009 about a fifth of East Valley properties used for manufacturing and distribution were vacant.

The market became stable in 2012, and improvement is expected to continue throughout this year.

The primary reason for the real estate turnaround is the general improvement in the economy. Companies that require industrial properties are seeking out better leases to balance the companies' needs.

Another key factor is that not many new properties have appeared on the market. Landlords who had to offer very low rates during the recession might have a little more incentive to raise the rent, and those tenants' whose leases are set to expire aren't as willing to go real estate shopping.

Other investment companies are hoping to capitalize on the current conditions and revamp some struggling businesses. At the beginning of the year, one Los Angles company, BH Properties, bought a building that houses AT&T's offices in Riverside. BH Properties had held off on making many purchases for several years, but now the economic climate is once again right.

As part of its acquisition and investment strategy, the company has also recently purchased an office complex in Ontario, California. The complex has 106,000 square feet, only 62 percent of which is currently occupied. BH Properties hopes to fill the complex as soon as possible.

Investors, landlords and commercial tenants all have an interest in avoiding litigation. To learn more about commercial real estate law, please visit our Encino real estate litigation site.

Source: The Press-Enterprise, "REAL ESTATE: Vacancies shrink for industrial buildings in East Valley," Jack Katzanek, April 8, 2013

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