5 Ways You Can Protect Yourself From Real Estate Wire Fraud

5 Ways You Can Protect Yourself From Real Estate Wire Fraud

Real Estate Wire Transfer Fraud Gains Momentum

  • A new type of wire fraud is beginning to target and impact homebuyers
  • Real estate transactions in today’s world often involve the wiring or electronic funds transfer (EFT) of money to complete a deal.
  • Buyers are being tricked into wiring their entire down payment on the day of closing to a fraudulent offshore account, often by cyber criminals who have spoofed or hacked their realtor or title company’s professional email account.
  • The losses from these wire scams are typically not insured or reimbursed by the bank because the wire transfer goes overseas.
  • Victims of these scams have sometimes lost up to six-figure sums and have had to cancel plans to buy their dream homes.
  • The California Department of Real Estate (DRE) has issued a consumer alert for real estate wire fraud.
  • This article will give you 5 tips on how to protect yourself or your client during your next real estate transaction.

Imagine This Scenario

You’re about to buy the home of your dreams when you receive an email from your realtor or title company saying there has been a change of plans. The email explains that you need to wire your down payment by tomorrow morning to a bank account belonging to the seller. Eager to close, and to trust the legitimacy of this email, you wire over your hard-earned down payment to the bank account requested. The next morning you decide to call your realtor and discuss what is next only to find out they never sent any such email. Your down payment is now gone, and you’ve just been the victim of an increasingly common form of financial fraud – real estate wire transfer fraud. 

Why Wire Transfers Are A Problem

The above story may sound crazy, but it is entirely accurate. According to the National Credit Union Administration in 2016, the number of fraudulent wire transfer scams reported by title companies and real estate agents increased by 480%. These numbers are alarming and indicate a real crisis that is impacting thousands of American homebuyers. While a typical wire fraud may only net a few hundred dollars, real estate wire fraud can net a cybercriminal anywhere from a few thousand dollars to hundreds of thousands of dollars. This can wipe out the would-be homeowner’s bank accounts and create lasting financial hardships.

How the Scam Works

  • Hackers will typically compromise a real estate agent or title company’s email server and search for upcoming closings.
  • The hacker will then email the buyer with legitimate-looking wire transfer instructions (sometimes as soon as the day before closing) requesting that the down payment is transferred electronically to a different account.
  • Once that money is transferred, it is GONE for GOOD. Banks, financial institutions, and the government typically cannot ensure this type of transfer because the accounts are offshore.

What makes this even more difficult is how skilled hackers are becoming. Often, they will use authentic-looking company logos, language, and personal information designed to make you feel comfortable.

  • Email is a commonly used method for transfer of information and documents in a real estate transaction – making it even more difficult for targets to spot.

What You Can Do To Avoid It

  1. Be aware – as a homebuyer be mindful that you could be a target for scammers. Look for potential red flags which include a sudden change of plans, misspellings, poor grammar, an increased sense of urgency, and emails sent outside of regular business hours.
  2. Use alternatives whenever possible – Instead of using electronic wire transfers, use cashiers checks and get a receipt. With smaller transactions, you may be able to use personal checks or a credit card and obtain a receipt, which will give you a proof of purchase.
  3. Obtain Numbers –  Get the phone numbers and account numbers of the real estate agents and escrow-holders at the beginning of the real estate transaction, and be sure to use those throughout the transaction. This provides you absolute proof you are transferring money to the right accounts.
  4. Call first – Even as legitimate as they may seem, never act on an email request to transfer funds electronically without verification. If your agent requests that you need to transfer money electronically this way, always call the number provided at the beginning of the transaction and verify the email request to transfer funds. Even better, transfer the money in person with a cashiers check. This way you can see directly who you are sending the money to.
  5. Keep it confidential – Never offer any sensitive personal information such as social security numbers, credit card numbers, bank account numbers, or financial details via email or text message. ALWAYS and ONLY enter this type of information on an encrypted website or give the information in person.

Taken directly from the DRE, here’s what you can do if you or someone you know has been a victim of real estate wire fraud.

If you (or your clients) are victimized, it is critical that you or your client contact your depository institution and the Federal Bureau of Investigations (FBI) immediately to have a chance at halting the criminal transfer. File a report with the FBI by calling a local FBI office or reporting online at FBI Internet Crime Complaint Center.  Their website is: bec.ic3.gov

Curtis Gabhart and Gabhart Investments, Inc – 2018 All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of Gabhart Investments, Inc. The material contained in articles that appear on gabhartinvestments.com is not intended to provide legal, tax or other professional advice or to substitute for the proper professional advice and/or commercial real estate due diligence. We urge you to consult a licensed real estate broker, attorney, tax professional or other appropriate professionals before taking any action in regard to matters discussed in any article or posting. The posting of an article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.

What Does Gabhart Investments, Inc, Do?

Gabhart Investments, Inc, one of the top real estate companies in San Diego. We do residential real estate, commercial real estate, and manage a syndication of private investors; specializing in acquiring and renovating single & multi-family properties.

We have done over $250 million in real estate transactions, have been featured on TLC‘s Flip This House, won several awards with the San Diego Business Journal, and have the distinctive CCIM Designation (Certified Commercial Investment Member).

If you’re interested in learning more about how Gabhart Investments can help you meet all of your real estate needs, please don’t hesitate to give us a call 858-356-5973 or email us

Interview: GII Listing Is Chosen For The 2018 MA+DS Modern Home Tour

Interview: GII Listing Is Chosen For The 2018 MA+DS Modern Home Tour

We are excited to announce that one of our listings, La Pintura Moderna, was chosen for the 2018 San Diego Modern Architecture + Design Society Home Tour! This prestigious distinction was handed out to only 9 homes in San Diego County.

The Modern Home Tour series gives the residents of San Diego and surrounding SoCal communities a rare chance to see a selection of amazing home designs and projects completed by local architects, designers, and builders.

The tour will take place this Saturday, October 13th, 2018, from 11:00AM-5:00PM. This event is on-sale now and tickets are available at the button below. 

We sat down with the talented team behind this gorgeous property to better understand their inspiration, the process, and much more. We hope you enjoy this interview and we’ll see you this Saturday at La Pintura Moderna!

 

The Team 

Kai Kenner

Architecture, Project Management

Leigh-Ann Muramoto

Design

Jon Walsh

Construction

Can you introduce the team that designed and built La Pintura Moderna?

Kai: The primary design and management team were Leigh-Ann Muramoto, Jon Walsh, and Kai Kenner. Leigh-Ann was responsible for the design – how the home feels up close and personal. Jon was responsible for getting it built – we call him Mister GSD. I was responsible for the architecture, project management, and for the overall vision of the home and keeping the train on the tracks.

Q: La Pintura Moderna is stunning inside and out. The first thing that strikes me as you walk up to the house is how breathtaking it is. Each design element creates a perfect sense of harmony. Can you tell our readers about the inspiration behind the design and architecture?

 Jon: Thank you. After spending time at the site we decided to make the main living space an open floor plan with the idea of leading the viewer through the home towards the canyon. We wanted to emphasize clean lines, natural materials, and a proper use of light. Design elements grew as we worked with the natural characteristics of the site, such as the terraced front yard which follows the natural slope of the lot.

Kai: Our vision for the property was a timeless and serene modern retreat.  We designed the home around themes that people always appreciate regardless of the trends of the time.  So the architecture evolved around the quiet canyon, high ceilings, open spaces, indoor/outdoor living, and floor-to-ceiling glass walls.  We downplayed contemporary elements such as curves and pop-outs in favor of clean, modern lines. The main living areas such as the kitchen, great room, and master bedroom are oriented towards the canyon so those important areas of the home always have a view of natural beauty.

Leigh-Ann: The inspiration for the home sprang naturally from the surrounding treetops and the canyon. We had many dinners together at the site, visualizing the space and discussing how to best capture the surroundings. We chose a subdued color palette that would complement the natural beauty of the site. San Diego is an ideal locale to play with indoor-outdoor concepts. We used floor-to-ceiling glass walls to blur the line between indoor and outdoor spaces.  We also extended the roof over the outdoor deck creating an additional 800 square feet of living space that the owners can enjoy in any weather.

Q: It’s a prestigious distinction to be chosen for the MA+DS Modern Hour Tour, as only a few homes make the cut; what does that mean to you?

Jon: It’s an honor and means a lot given both the time and effort we spent on the home, and also due to how much we enjoy modern design.  To be recognized for our work is very rewarding and we’re also happy that more people are able to see the home.

Leigh-Ann: It’s also a great opportunity to learn and to get feedback from the modern design community. And we’re grateful to MA + DS for fostering an appreciation for modern architecture in home design.

Q: La Pintura Moderna is truly a special home. What are your favorite areas or features of the home and why?

Leigh-Ann: My favorite area is the front entry, it sets the tone for the rest of the home. As you walk towards the 9 foot tall glass pivot door, there is a flowing water feature to the left. To the right is a massive structural shear wall that anchors the home and balances the transparency of the glass walls. We clad this wall in grey stacked slate to give it a solid, grounded feel. We continued this theme of stacked slate with the other structural walls in the home. The wood cladding under the eaves ties in with the warm, wood floors. We repeated these elements throughout the home to create a cohesive, calming feel. The overall effect is a fluid but grounded experience.

Another feature that adds a lot of dimension to the house is the thoughtful use of skylights and clerestory windows. They ensure every area of the house is lit with plenty of natural light.

Jon: I like the sightlines through the entry and the sensation that you’re being pulled out to the canyon-facing deck and sitting up in the trees.

Kai: My favorite design elements are the views of the surrounding nature, floor-to-ceiling glass walls, open floor plan, and the covered indoor-outdoor deck.  As Jon touched upon, I love being surrounded by the treetops and sitting on the deck, looking out across the canyon. I also love the two-person walk-in shower!  I always try to fit a huge shower into a master bathroom plan. Leigh-Ann’s design uses a light colored tile on the short ends of the shower to ensure the shower feels light and bright, while the darker tile on the floor and longwall ties in with the rest of the bathroom.  And Jon did a great job designing the linear trench drain – it’s entirely functional but beautifully elegant because it blends in so well with the surrounding tile.

 

Q: The before and after photos are unrecognizable. How did you know La Pintura was the right house for your project? What were the main features that caught your attention?

Leigh-Ann: A few years ago we designed and built a house on a site which was similar to La Pintura. We learned so much from that project and we were excited to apply our learnings to a new project. Like La Pintura, the house was on a canyon lot with a reverse floor plan where you enter at street level and the secondary rooms are below. The reverse floor plan takes full advantage of the canyon views and lets in the most light to the main living areas.

Q: What was the biggest challenge you faced during the entire process?

Jon: The sloping site was difficult to work with and it slowed the construction process.  But designing with the slope gives us an opportunity to create interest, so it balances out in the end.

Kai:  We also had three opinionated, creative people working on an inspirational project.  We knew from experience that we would need clear principles to guide our decisions as a team.  Fortunately, the three of us have a great working relationship and a good vibe with each other, so all the decisions and work effort flowed easily.

Q: Are you planning or already working on your next project?

Kai: We’re in the design and planning stages on a few multi-family projects located in Mission Hills and North Park.  These are new construction projects with modern designs. We chose the sites because they’re in great neighborhoods with quiet, walkable streets.  We aren’t working on any single-family homes at the moment. La Pintura Moderna was a unique project, so we’re always on the lookout for similar projects where we can create something special and memorable.  We live in beautiful, temperate, Southern California. We’re grateful whenever we can express a connection to the natural surroundings through our creative work.

Ready To See La Pintura Modern In Person?

 

La Pintura Moderna is truly a jaw-dropping property that must be seen in person to admire its beauty. If you’d like the chance to see it, make sure you attend the 2018 MA+DS Modern Home Tour this Saturday, October 13th, from 11:00AM-5:00PM. 

Be sure to purchase your tickets at the button below! If you’d like to get in touch with Stone Lion Properties, click here to learn more!

To learn more about La Pintura Moderna, please contact Gabhart Investments, at (858) 356-5973.

Gabhart Investments, Inc – 2018 All Rights Reserved

San Diego Rent Control and Vacation Rental Update Lunch & Learn

San Diego Rent Control and Vacation Rental Update Lunch & Learn

San Diego Rent Control and Vacation Rental Update Lunch & Learn

San Diego Rent control and restrictions on short-term vacation rentals could have devastating impacts on the San Diego real estate market and economy. Are you an investor, real estate professional, landlord or even a resident that is interested in discovering how this could impact you? It’s time to educate yourself and let your voice be heard. 

In this interactive and informative 60-minute class, Curtis Gabhart and an expert panel of speakers will present an in-depth overview of both San Diego rent control and restrictions on short-term vacation rentals.

Topics include

  • San Diego Rent Control
  • National City Rent Control
  • Financial modeling displaying how rent control could impact property value & NOI
  • Short-term vacation rentals impact on the real estate market

San Diego Rent Control

Guest Speaker Bio’s

Molly Kirkland: Molly has been serving the San Diego region in the governmental affairs field for well over a decade. For nearly 7 years, she has served as the Director of Public Affairs for the San Diego County Apartment Association (SDCAA).  Prior to working with SDCAA, Molly worked in Government Affairs and Communications for the San Diego Association of REALTORS.

Richard A. Snyder, CPM: a Real Estate Professional for over 30 Years, is the President and Owner/Broker of R.A. Snyder Properties, Inc., located in San Diego California, where he is a recognized leader in the Real Estate Industry. Rick is a Past President of San Diego County Apartment Association and he continues to lead as Co-Chair of the local effort to defeat Rent Control in National City and the local No on 10 Statewide campaign to protect Costa-Hawkins.

Christine La Marca: is a San Diego native with over 20 years of residential property management experience.  She is responsible for the day-to-day management of her family’s real estate portfolio. She is the Immediate Past President of the San Diego County Apartment Association, and she is currently still actively serving the Association as Co-Chair of the local No on 10 Statewide campaign to protect Costa-Hawkins and the local efforts to defeat Rent Control in National City.

Check out Curtis’s San Diego rent control blog post to catch yourself up to speed before you attend.

Click Here to Check it Out

Date

Tuesday, September 18, 2018

12:00-1:00PM

Location

Keller Williams Carmel Valley

12780 High Bluff Rd Ste 130

San Diego, CA 92130

We would be thrilled if you could join us for this special event. Lunch will be provided to those who RSVP in advance. Space is limited so please register as early as possible. Additional details are listed below.  To RSVP, follow the ticket prompt below confirming you will be in attendance or recommend someone else from your office if you are unable to attend. Thanks very much!  We hope to see you there!

 

The presentation will be hosted by Curtis Gabhart, CCIM 

Curtis Gabhart has been a successful Real Estate professional for more than a decade. He has a Certified Commercial Investment Member (CCIM) designation from the CCIM Institute. He is a Director at Keller Williams Commercial Brokerage and President of Gabhart Investments, Inc, a privately held real estate investment firm that manages a syndication of private investors, specializing in acquiring and renovating single and multi-family properties. He also serves on the Commercial Advisory Board at the University of San Diego Burnham-Moores Center for Real Estate and he teaches commercial real estate courses for the California Association of REALTORS® and San Diego Association of REALTORS®. He has been recognized by members of Congress, California State Senators, the City of San Diego, and had a day named after him in the County of San Diego for his community service and dedication to the community. He was awarded as the Dealmaker of the Year for 2015 in Retail and Multi-Family category.

24 Things You Need to Know About National City Rent Control

24 Things You Need to Know About National City Rent Control

National City Rent Control

Rent Control may be coming to San Diego County sooner than you think. National City renters recently gathered 3,600 signatures to place the National City Rent Control and Community Stability Ordinance on the November 2018 ballot. The implications that this may have on property owners, renters, and our local economy could be immense. We encourage all property owners to educate themselves on this matter and understand it’s potential consequences. If you would like a full highlighted copy of the ordinance, please leave us a comment below and we’ll be happy to send you a free copy. In addition, I will be hosting an informative lunch and learn on September 18th that will be covering rent control and the recent vacation rental restrictions. Click here for more information and to RSVP.

San Diego Rent Control


24 Things You Need To Know About the Ordinance

  1. All rental properties would be subject to this measure except for single-family homes with granny flats, rooming houses, student housing, and subsidized affordable projects.
  2. All rental rates will be placed back to the date this ordinance was published (March 2018). The rent charged at that time will serve as the base rent for the unit.
  3. The base rent will be allowed to increase by the inflation rate (CPI) of up to 5%, but no more regardless of whether inflation went beyond 5%.
  4. This ordinance does not allow for the standard of vacancy decontrol, where an owner would typically raise rents to market upon a tenant moving out. This means the owner must keep the unit at the current controlled rental rate.
  5. Establishes a 5-member National City Rental Board (NCRB). This Board would have the authority to set and adjust annual rent rate for rental properties.
  6. The Board must be composed of at least 3 tenants currently renting in National City.
  7. The Board would finance its “reasonable and necessary expenses” by charging landlords annual rental housing fees. This would start at $120 per unit and is subject to increase by the Boards discretion. Most rent control boards in California charge between $240-$360 per-year per-unit.
  8. The Board would create a “base rental rate” and units would be assigned a maximum allowable rental rate that the landlord could charge a tenant. The maximum rate could be adjusted higher or lower with the Board’s discretion.
  9. Landlords wanting to increase their maximum allowable rate would have to petition the board for approval.
  10. Contains a Just Cause Provision, which significantly decreases the landlords right to require a tenant to vacate unless under specific circumstances. The landlord must file with the Board justification as to the why the tenant is being evicted.
  11. If the landlord plans to remove the unit from the market, they must notify the Board and provide a minimum of 120 days notice to tenants or 1 year if the tenant is a senior (62+) or disabled. Relocation payments will also apply.
  12. The landlord would have to provide $7,000 to the tenant or $10,000 to a senior/disabled tenant for relocation assistance. This is the 1st year established fees and would be subject to increase per Board review on a yearly basis.
  13. Any significant repairs requiring a temporary-vacation of the unit for more than 30 days are subject to relocation assistance fees.
  14. The evicted tenant possesses a “right of first refusal” and is allowed to take back the property if the owner places it back on the market. The tenant will also be entitled to pay the same rental rate they initially paid. For example, an owner decides to move back into his unit for 5 years, and then suddenly decides to place it back for rent. The owner must then offer it to the prior tenant at the last rental rate they paid.
  15. Any attempt made to recover the unit in violation of the ordinance shall render the landlord liable to the tenant for actual damages, including damages for emotional distress, in a civil action for wrongful eviction.
  16. Landlords and tenants are prohibited from making agreements that contradict any provision in the ordinance. These private agreements would be deemed void.
  17. Ratio Utility Billing (RUB) is prohibited. Rental owners may not charge for utilities unless they are individually metered.
  18. Landlords must petition the rent board for any request to increase the maximum allowed rent.
  19. Hearing examiners may review an owner’s books and records and conduct a building inspection and/or request that the City conduct a building inspection. Tenants may request that a hearing examiner conduct an inspection prior to a hearing.
  20. The City Council, City Manager, and City Attorney will not have any power to oversee, supervise, or approve the Board’s yearly budget.
  21. The Board will be allowed yearly assess and determine if there is a sufficient number of hearing examiners, housing counselors, and legal staff to effectively carry out the ordinance. This would increase the budget and cannot be overseen by City Council.
  22. The landlord’s failure to comply with any of the requirements in the ordinance can result in the tenants right to withhold rent. After the issue has been resolved by the owner, the Board will get to determine how much, if any of the withheld rent, will be owed to the owner.
  23. Any rental owner who demands, accepts, receives or retains any payment in excess of the amount allowed under the Ordinance shall be liable in a civil action to the tenant, including general and special damages and emotional distress. Additionally, the tenant will be entitled to costs and expenses.
  24. An order authorizing rent withholding shall survive the sale of the property and shall be binding upon the successors of the rental owner.

These are just the main highlights of the proposed ordinance. I strongly encourage you to read through the entire ordinance and familiarize yourself with it. If you would like a copy of the full ordinance, I would be happy to send you one. Just let me know if the comments below.


Stay posted for more updates on Rent Control in National City. If you haven’t checked out my earlier blog post on the proposed San Diego Rent Control efforts, click here to read more. I hope to see you at my upcoming lunch & learn on rent control and vacation rentals. This will be a great chance to get your questions answered and to hear more about this issue.

What Now?

If you a property owner and have concern over how this could affect your investments, my team and I would be happy to help. We have a wealth of experience in the multi-family industry and provide our clients with unmatched expertise. Give us a call today at (858) 356-5973 or click here to send us an email.


Curtis Gabhart and Gabhart Investments, Inc – 2018 All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of Gabhart Investments, Inc. The material contained in articles that appear on gabhartinvestments.com is not intended to provide legal, tax or other professional advice or to substitute for the proper professional advice and/or commercial real estate due diligence. We urge you to consult a licensed real estate broker, attorney, tax professional or other appropriate professionals before taking any action in regard to matters discussed in any article or posting. The posting of an article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
How to Hire the Right Real Estate Agent to List Your Apartment Building

How to Hire the Right Real Estate Agent to List Your Apartment Building

If you are thinking of selling an apartment building I think it is important to use someone who specializes in that product type. Just like if you have a 5 million dollar home in Rancho Santa Fe, you wouldn’t list it with an agent who focuses on first time home buyers in San Diego.

Multifamily investments take a much different approach to marketing the listing for sale than a residential property. In the report below I mention some of what I feel are good ways on how to hire the right real estate agent.

If you don’t want to end up with this agent then you need to…

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The Foundations of Commercial Realty

The Foundations of Commercial Realty

Foundations of CRE

Foundations of Commercial Real Estate: Players & Properties

Commercial Real Estate

If you think about it, there really are only two facets to dealing in property; the people, and the properties.  Everything falls into or between these.  So let’s begin your entrance into the world of commercial real estate (CRE) and take a deeper look at both of categories.

 

Many people who are commercial developers have a background in brokerage. While there are many similarities, the largest key difference between the two is that emotions play a much smaller role in commercial real estate as compared to residential real estate.  Buyers, sellers, tenants & landlords are much more motivated by profit than by individual preferences.  Of course, commercial real estate transactions are often much more complex and take longer to complete as well.

 

Now, let’s consider the major players involved in the commercial real estate industry:

 

The Major Players

Commercial Real Estate Key Players

Real Estate Brokers

As anywhere else, the job of the broker here is to find and facilitate a transaction between a buyer and a seller.  Most who play this role in CRE call themselves brokers, however, this is not necessarily 100% accurate as some people hold a broker’s license, while others hold a salesperson license.  Brokers working for buyers, more often than not, need to find properties suitable for purchase outside existing MLS listings.  Whereas brokers working to sell a property need to target a high niche segment of buyers and investors.  As commercial real estate transactions are quite complex, brokers may or may not be involved in the entire spectrum of the transaction.  Additionally, they may or may not refer other professionals during the course of the transaction.

The key thing for residential realtors to realize is, that their previous buyers may prefer to deal with or through them, rather than a commercial real estate broker who they don’t know.  Thus, it is highly recommended for residential realtors to joint venture with or refer to a commercial broker who has the experience….. that their clients can be served without losing business or relationship value.  (Let us know if you are looking for tips on evaluating the right commercial real estate brokerage to associate with and how to negotiate with them, we will have an article on that soon.

Plus, it is crucial to note that the Code of Ethics laid out by San Diego’s Association of Realtors ® (SDAR) recommends against brokers practicing beyond their expertise.  For more details, refer to their publication here.

 

Lenders

As with any real estate transaction, finance needs to be secured.  While most buyers have their own source of financing, the broker needs to have relationships with various types of lenders; construction, acquisition, equity and permanent.  These relationships are useful during preliminary valuations and can also be crucial in enabling financing of the final transaction.

Just like most commercial real estate players, it’s important to have a lender who specializes in the product type you are dealing with.

 

Architects, Engineers & Planners

During development and redevelopment (and sometimes even leasing) buyers may need the assistance of any of these professionals, so it is important that a broker has developed such relationships beforehand to enable a smooth transaction.

 

Accountants

As the profit motive is significantly larger in commercial real estate deals, buyers and sellers will often want financial and tax advice.  This is usually done by consulting with their own accountants and financial advisors, which is recommended, however, when appropriate, it can be helpful for the broker to be involved in these transactions so the broker can better advise on the real estate portion of the transaction based on the items the principal financial advisor recommends.

Attorneys

There is no doubt that legal advice will be needed in any commercial real estate transaction and as a broker, unless you hold a license in law, you are not permitted to provide that advice or draft legal drafts and deeds.  It is, again, important that the commercial real estate broker has established relations with competent lawyers who can facilitate transactions rather than killing them.  Are you looking for such attorneys to work with?  Let us know and we would have happy to provide references.

Appraisers

Sellers want appraisers’ valuations in order to establish a selling price.  Buyers pay for appraisers as mandated by lenders before they extend the loan in order to purchase the property.  Appraisers need to be not only specialized in commercial real estate, but also in the type of commercial real estate as the property under consideration.

 

Others

Depending on the type of transaction, various other professionals may need to be involved.  This will change from time to time and here are a few scenarios elucidating the requirement of additional outsider help:

  • Rezoning
  • Historical
  • Traffic
  • Environmental
  • Business Brokerage

 

This brings us to the closure of this part of the article.  Do you know any of these professionals who you would like to recommend?  Are you looking for any such professional for your transactions in San Diego Commercial Real Estate?  Or do you just have some questions?  Drop a comment and share; we would love to hear from you.

 

San Diego Commercial Property Types

San Diego Commercial Property Types

Commercial Properties

As mentioned already, commercial real estate transactions are much more complex than residential real estate ones.  As a result, brokers often need to be specialized within specific types of properties of commercial real estate.  However, if the geography is a small market, it is possible for the broker to service most segments within commercial real estate.  But in more larger markets, including San Diego Commercial Real Estate, it is very difficult to know the market for every product type. Make sure the broker you are working with has specific experience in the type of property that you are interested in.

 

While there are many types of properties with the San Diego Commercial Real Estate Industry, the major ones are ;

 

  • Multi-Family 5+ Units (more on this later)

  • Office

  • Industrial

  • Retail

  • Land

 

Some of the smaller segments include hospitality, storage, and multifamily, which is last in this list, but the largest within this category of sub-segments.  Interesting to note that Gabhart Real Estate Advisors has experience within most of these segments in San Diego!

 

Now let’s consider each major type of property within the commercial real estate segment:

Office

Each type of user has their own requirements.  As a broker, it’s important to understand the factors that tenants would consider important for their business. What is important for a law firm is not likely to be important for an IT startup, and so forth. While there are many sub-categories (converted homes, low-rise, mid-rise, high-rise, specialty etc.) within this category, most of San Diego’s office properties fall under the following:

 

Office Showroom

Footfall, window and internal display & layout are the more important variables in this type of property.  In San Diego Office, showrooms often fall within prime localities in order to attract the most customers.

 

Office  Warehouse

As the name suggests, a space suitable for storage of goods (depending on the type of goods) as well as administrative and sales teams. Location, price, and usability are often the most considered points in such transactions.  Certain suburbs of San Diego are well known for office warehouses.

 

Independent Warehouse 

Security, storage capabilities, bonded, climate control is some factors to consider. Most of San Diego’s warehouses are located in suburban areas around the 13 cities.

 

Manufacturing 

Here, often legal matters matter the most.  Free trade zones, licensing for light and heavy manufacturing are of prime importance.  Availability of labor nearby is another key consideration.  Free Trade Zones # 153 in the San Diego / Tijuana area is very popular for various manufacturing concerns for precisely these reasons.

 

Self Storage 

Is another type of industrial product

 

Apart from the factors mentioned in various types of office spaces above, there are various more which apply to some or all such properties.  They are:

 

·         Labor pool availability

·         Proximity to customers

·         Transportation access

·         Price

·         Space configuration

·         Ceiling Height

·         Floor Load

·         Utilities

·         Docking area

·         Sprinkler systems

·         Zoning laws

·         Govt. Incentives (local, state & national)

·         Buy vs. Lease

 

Additional resources recommended by National Association of Realtors ® is available at the website of Society of Industrial and Office Realtors ® www.sior.com and the CCIM Institute www.ccim.com

 

Retail

Again, this is a wider segment than most may imagine and carries various subcategories of properties within the retail real estate segment.  They are:

Single User 

These are used by destination orientated retailers such as banks, retail chains or even grocery shops.

 

Credit Tenants 

When retail is being financed, the tenants business strength is reviewed for considering the tenant’s lease as a security for a loan. Financially stronger tenants in San Diego (and other places) are often granted better terms.  However, these terms may change during the course of tenancy based on the business outcomes of the tenant.

 

Big Box 

Big Box properties in San Diego are limited to large national or International companies.  These are companies that require 25,000 + sq. ft. of space, sometimes even more than 50,000 sq. ft.

 

Small Strip Center 

There is no death of San Diego’s small strip centers.  These are buildings which contain numerous mom and pop shops i.e. retail outlets which are typically owned and operated by the same person.

 

Neighborhood Shopping Center 

Every San Diego neighborhood has one as each such center services within 1-3 mile radius.  There is always several anchor tenants, which vary from cleaners, nail shops, grocery stores et al.  Recent trends observed by the National Association of Realtors ® notes that drug stores used to be a part of such shopping centers, however increasingly they have become stand-alone shops near the parking lot, and as such, are known as an “outparcel”.

 

Community Shopping Center

These buildings service a larger community than neighborhood shopping centers.  They typically service up to a 10-mile radius and house a major retailer such as Walmart, or Movie Theaters etc.  Fashion Valley & Westfield UTC Mall are a few that fit this category.

 

Regional Shopping Center

As implied, these buildings service a wider region and are often known as malls even though they need not be an enclosed space.  Tenants include a variety of regional & national tenants including boutique stores.  The size of such stores ranges between 400,000 sq. ft. and 2 million sq ft.  Beyond that, and they are known as super regional.  However, it is not just the size of the mall that determines if a mall is a super regional shopping center, but also the tenant mix and sales per square foot to ensure that the building is actually popular amongst customers.

 

Specialty Center

These centers vary in size and objective.  They can house certain types of décor such as antique or be geared towards a certain segment such as parents by selling just baby related items.  Belmont Park is an example of a San Diego specialty center, focusing on wearable and accessories for beachgoers.  Surfs up, dude!

San Diego Land for Sale

Land Sales

Land

This is where monuments are made.  Realtors ® focusing on land deals are often (or should be) Accredited Land Consultants, which is a designation imparted by the Realtors Land Institute.  This is a highly-specialized niche within commercial real estate as planners, architects, engineers, developers, and brokers are all often involved.  Some of the key considerations in San Diego’s Land transactions are:

 

·         Zoning

·         Utilities

·         Accessibility

·         Suitable Soil

·         Nearby Amenities


Curtis Gabhart and Gabhart Investments, Inc – 2018 All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of Gabhart Investments, Inc. The material contained in articles that appear on gabhartinvestments.com is not intended to provide legal, tax or other professional advice or to substitute for the proper professional advice and/or commercial real estate due diligence. We urge you to consult a licensed real estate broker, attorney, tax professional or other appropriate professionals before taking any action in regard to matters discussed in any article or posting. The posting of an article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.