No one’s sure how many candles are on that cake, but let’s say no more than 29 ;—)

Regardless of the number, CBM’s Encino office wishes longtime property manager, Claudia Witt, a very happy birthday!

And we hope there are many more to come.

In the meantime, if you happen to bump into Claudia, give her your best birthday wishes, too.


It’s simply inevitable… At some points as shopping center landlord, you’ll need legal support.

Mostly because, to use a legal term, you’re not at liberty to seek “self-help.”

In other words, you can’t confront a tenant with a baseball bat or move their stuff out in the middle of the night and change the locks.

Instead, you must use the court system to settle disputes you can’t resolve through verbal negotiations.

Where Do Most Disputes With Tenants Arise?

When a tenant fails to live up to their contractual obligations…

It could be the tenant’s rent or CAM payment is late. Maybe they’re several months delinquent on rent or CAM. Perhaps they’ve left their space owing money. Or it could be they’ve vacated your property and left considerable damage behind.

So, What Now?

You have a variety of options. And your approach is likely to depend on the circumstances involved.

How aggressively you chose to pursue a delinquent tenant may hinge on your desire to keep that tenant.

And your decision to hunt chase outstanding monies owed or compensation for damages may rest on whether you believe the tenant actually has any money to recoup.

But whatever the scenario, you may find yourself at the point where hiring a lawyer is your best course of action.

In the real estate business, this decision is known as: “Going to legal.”

It’s generally considered an “act of last resort.” Largely because when attorneys get involved, often no one wins.

Then again, there are several common situations that can be remedied, often quickly and inexpensively, by hiring a lawyer.

And toward that end, here are the 4 most common reasons a landlord hires an attorney:

Three Day Notice to Pay or Quit

Let’s say a tenant is late paying rent or CAM. Now, on one hand, they could either simply be late this particular month.

Alternatively, this could the first stage in an eventual default that ultimately requires a formal eviction to oust the delinquent tenant for non-payment of rent.

As a landlord, you really have no way of knowing one way or the other? It is, however, clearly defined by law that a posting a 3 Day Notice to Pay or Quit is the first step in an eviction process.

Now, the tenant may quickly pay upon receipt of a 3 Day Notice. And the situation progresses no further.

But if this is the beginning of an eviction, your 3 Day Notice must be prepared and served in strict adherence to the “letter of the law.”*

*IMPORTANT NOTE: An eviction process includes strict guidelines, which strongly favor tenants. And if those guidelines are not diligently followed “to the letter of the law,” an unsympathetic judge could force you to start over from square one.

Therefore, we ALWAYS recommend hiring an attorney that specializes in real estate law to prepare and serve a 3 Day Notice.

Additionally, there’s an intimidation factor encouraging payment when the tenant hears from your lawyer.

Unlawful Detainer Action (UD)

Let’s say you post a 3 Day Notice to Pay or Quit and the tenant doesn’t respond. Or responds stating they don’t have the money to pay. And fails to offer a credible path to becoming current on outstanding rent.

The next step is filing an Unlawful Detainer (UD).

This is formal legal action that requires an attorney to draft an Unlawful Detainer notice informing the tenant of their breach of contract and the landlord’s intention to reclaim due to non-payment of rent. The Unlawful Detainer notice must be formally served by a duly authorized process server. And this service must be officially recognized by the tenant.

An Unlawful Detainer action may also wind up in court with a formal hearing in front of a judge. And, if carried to its ultimate conclusion, a UD will result in an official eviction and lock-out conducted by a county sheriff’s deputy.

Much like a 3 Day Notice, however, a UD doesn’t always result in an eviction. The threat of a UD can be used as leverage to prompt a delinquent tenant to pay outstanding rent.

In other words, just because you file a UD doesn’t mean that you must follow through with an eviction.

Additionally, outside of any leverage you apply, a delinquent tenant is afforded numerous opportunities throughout the UD process to pay their outstanding rent and maintain their tenancy.

Tenant Vacates a Property Owing Money

Let’s say a tenant vacates your property. Maybe the left because their lease expired, and they chose not to renew. Or perhaps they assigned their lease, and the assignee vacates the space, again, for any number of possible reasons. Or because they were formally evicted.

Whatever the scenario, the tenant leaves still owing you money. Whether for outstanding rent, CAM, or other funds designated in their lease agreement.

You have a right to file a lawsuit against the vacating tenant to recoup monies owed you under the term of their lease.

Your decision to take such action likely hinges on whether you believe the tenant has any money.

Tenant Vacates a Property Leave Behind Severe Damage

Let’s say a tenant vacates your property. And after they depart, you discover they’ve done considerable damage to the space they formerly occupied.

You have a right to file a lawsuit against the vacating tenant to recoup the cost of repairing your property.

Here again, your decision to pursue the tenant for damages depends largely on whether you believe the tenant has any money to recoup.

Struggling With Delinquent Tenants in Your Shopping Center?

Working on behalf of our landlords, we’re regularly retaining attorneys to prepare and serve 3 Day Notices, file Unlawful Detainers, and pursue tenants for unpaid rent or property damage.

And if you’re facing struggles like these with your tenants, we can help!

For more information on CBM’s property management services, visit our services page: cbm1.com/servcies


Technology has completely reshaped huge swaths of our society. And when comes to commerce, consumers have come to expect that the businesses who serve them keep pace with new technology.

Thus as a business owner, your operation must evolve to meet these demands or risk extinction.

You can certainly take a Luddite attitude of: “This is how WE do things!” and refuse to budge. But you’re in serious jeopardy of being crushed by your competitors, not mention doing a disservice to your customers. And when fail to satisfy your customers, you lose them.

Because at a certain point, adopting new technology ceases to be about providing “convenience” and “improving efficiencies,” and simply becomes adhering to the “new norm.”

That’s why we’ve invested HEAVILY in leveraging technology in both our brokerage and property management services.

And not because we necessarily aim to be on the “cutting-edge” of the “latest technological developments.” We’re not pretending to be a some Silicon Valley tech start-up over here!?

But rather, our goal is to provide our clients with the best service possible. And taking advantage of the technological tools at our disposal helps us achieve this goal.

How does this look in practice within our business?

On the Leasing + Brokerage Side…

cbm1.com

We’ve actually been making use of technology as a marketing tool for several decades. Our website, cbm1.com, was among the first for a brokerage of our type in the marketplace. And it continues to rank near the top of organic Google searches for industry-critical keywords, in large part because of how long our domain name has existed.

LoopNet + CoStar

What’s the industry’s Gold Standard for commercial real estate Multiple Listing Services (MLS)?

In a word, LoopNet. And we’ve been a subscriber nearly as long as the platform has been in existence.

And with good reason! Because next to property signage (our least tech-savvy tool ;—), LoopNet is our largest driver of completed lease transactions.

We’ve haven’t always been CoStar customers. But they have always been the FIRST name in CRE data.

And since their acquisition of LoopNet, we’ve joined the fold. Truth be told, the technologically advanced tools that CoStar has provided us have significantly improved our ability to lease and sell properties.

CREXi

As advanced and valuable as LoopNet + CoStar may be, they’re not the ONLY game in town. And in our tireless effort to gain MAXIMIZE for our listings, we make use of every avenue at our disposal.

One such avenue is the growing CRE MLS platform, CREXi. With increasing broker participation and more new listings posted to the site every day, CREXi is looking to rival LoopNet’s prominence and reach.

And more than just a passive site, CREXi aims to become a distribution channel as well. Soon, subscribers will receive regular email updates highlighting new listings that meet their preferred criteria.

AIR MLS

Though primarily a player in the industrial space, AIR has is steadily cultivating a retail presence. And much like our participation with CREXi, we’re looking to take advantage of every opportunity possible to expose our listings to the marketplace.

Mass Email

While by no means a “new technology,” email’s prevalence, not to mention importance as a marketing tool, CANNOT be overstated!
And toward that end, we’ve amassed a 10,000+ subscriber email list. A line of communication that enables us to promote our listings directly to thousands of highly active retail tenants + top producing tenant rep brokers.

PropertySend

As robust as our email list happens to be, it’s largely targeted to regional players.

But what about when we have a listing, whether for lease or sale, that potentially appeals to investors across the country?

PropertySend is a mass email service that enables us to directly promote our listings to major tenants and well-capitalized buyers NATIONWIDE.

Retail LeasTrac

Based on their highly desirable location, certain sites are ideal for A+ credit tenants. But how do you reach those tenants, especially if they’re a major corporation with layers and layers bureaucracy separating you from the actual decision-makers?

Retail LeasTrac – a national database of credit tenant contact info – enables us to leap-frog the gatekeepers and connect DIRECTLY with the powers that be.

Our leasing team frequently makes use of this exceptional tool to present exceptional sites to highly prominent national retailers.

CRM

An acronym for Customer Relations Management, CRM is an incredibly powerful tenant tracking and deal management tool.

Our leasing agents note + catalog every prospective tenant, creating a detailed profile – noting use-type, preferred unit size, target area, budget and much more – for each contact. All of which is automatically integrated into a database shared companywide.

This vast, pervasive information store is fully indexed and instantly searchable. And with this sea of actionable data at their fingertips, our agents are empowered to do significantly more deals in far less time than ever before.

Social Media

You’re only as good as your network. And thanks to our highly visible social media presence, our leasing + management teams have greatly extended their reach.

By connecting with prospects, fellow brokers, vendors, and other industry cohorts via our active social channels, our associates have cultivated pivotal relationships that have made deals happen time and again.

And on the Property Management Side…

Skyline

The backbone of our property management operation?
Skyline!

A property management software platform specifically designed to service retail properties, Skyline enables us to monitor property financials at a granular level.

Monies for collections and payables perpetually follow in-and-out of our property trust accounts. Our accounting department keeps a firm hand on these funds, recording and tracking every payable and receivable (to the penny!) for each property we manage.

And thanks to Skyline, nary a cent under our prevue is unaccounted for!

ClickPay

While Skyline enables us to closely and carefully monitor collections and payables, it doesn’t liberate us from chasing after tenants for outstanding rent + CAMs.

“The check is in the mail” is a phrase that makes every landlord (and property management firm) CRINGE.

So, to cut the mailman (and the accompanying uncertainty) out of the equation, we use ClickPay. An automated, online bill-pay service, ClickPay enables tenants to pay rent + CAMs from anywhere through an internet browser.

Whether via their personal online bill-pay service, ACH (direct bank-to-bank transfer), or even credit cards tenants can make payments instantly. And the payments are automatically noted in Skyline, perfectly synchronizing all record of incoming collections.
No more checks. No more mailman. And no more excuses ;—)

AvidXchange

Of course, gathering collections in a timely fashion is critical to ensuring your property is profitable. But effectively managing payables is an equally important aspect of maintaining a financially sound property.

Acknowledging this fact, it’s no surprise paying scores of utilities and vendor bills for each property we manage is a sizable chore. And the consequence of failing to do so can be significant. A single missed payment can spell service disruptions, late fees, and even account cancellations.

To stay on top of this herculean task, we use AvidXchange. Similar to ClickPay, AvidXchange processes and automates utility and vendor payments entirely online.

Service providers submit invoices electronically directly to AvidXchange. In turn, AvidXchange codes and uploads bills to their online portal for our property managers approve. Once approved, payment is authorized and transferred electronically to vendors via their payment method of choice.

Bing, bang, BOOM! The entire payables process is completed online with the few clicks of a mouse.

Site Audit Pro

Pictures are a property manager’s best friend!

From documenting necessary repairs and hazards to confirming completed maintenance to detailing tenant violations, homeless encroachment, service vendor failures (and successes!) – a picture tells 1,000 words.

But snapping a gallery of pix on your smartphone, sorting + downloading them all to your computer, and them formatting them for inclusion in a property’s monthly narrative report is a huge time suck.

Site Audit Pro, however, makes the photo documentation process a BREEZE! A convenient smartphone app, Site Audit Pro enables managers to take photos, and organized and caption the images using the app’s built-in report template. From there, the manager forwards the completed report to their computer for inclusion with monthly property narrative reports.

Site Audit Pro is another time-saving tech tool that’s proven a real game-changer for our management team!

Interested in Putting CBM’s Tech Savvy Leasing + Management Team to Work on Your Retail Shopping Center?

For further information about leasing + management services, visit our website services page at: cbm1.com/services


There are several reasons you might find yourself considering whether to hire a property management firm to manage your shopping center.

Perhaps you’re a new investor with little, if any, time to oversee a property?

Maybe you inherited property or portfolio of properties and need real estate experience to support your efforts?

Or it could be that you’ve self-managed your properties and grown tired of the relentless responsibilities.

Whatever the case, the decision to hire a property management company to handle your retail property should be weighed carefully. You’re contemplating placing a third party in charge of an extremely valuable asset. And the management company’s administration of this asset could have potentially enormous financial and legal ramifications for you personally.

That’s why it’s best to outline the pros and cons of such a decision.

Now, as a professional retail property management company, we’re certainly aware of the benefits our services provide. But we’ve also seen the situation from the other side of the coin. With nearly 300 properties under management, we’ve spoken with more than our fair share of landlords. And we’ve discussed at length the concerns landlords struggle with the decision to turn over their properties to an outsider.

This experience, however, has granted us the advantage of perspective. So, if you’re thinking about hiring a property management firm to care for your property, here are the pros and cons you should consider:

THE PROS OF HIRING A PROPERTY MANAGEMENT COMPANY

Saves You Time

If you’re like many retail strip center owners, your plate is already overflowing. You have a fulltime job. You own your own business. You’re overwhelmed caring for your family. Or perhaps you’re engaged with all of the above. Bottom line, there isn’t much time left over.

Meanwhile, servicing a retail shopping center is a HUGE time commitment. Overseeing tenants and vendors. Staying on top of maintenance. Collecting rent and paying invoices, mortgages, property taxes and the like. The responsibilities literally NEVER end.

But a property management company handles all of these responsibilities for you. Your property manager interfaces with tenants and supervises vendors. They monitor maintenance and ensure your property remains in peak physical condition. And the management company handles all property financials. The accounting department collects and records rent and CAM payments. And pays and tracks all invoices, mortgages, tax bills, and other payables.

Saves You Money

What’s a fair price for trash removal, sweeping or power washing? What if your parking lot needs a new slurry coat or complete replacement? Or your roof springs a leak? Or your HVAC system gives up the ghost? What’s a reasonable price for those projects?

As a landlord, you probably have no idea. And it would take TONS of leg work just to gather bids and establish a fair market price, let alone negotiate the services. And in the meantime, the issue is lingering. Which is either consternating your tenants, creating a hazard the could spell an enormous legal liability for you or both.

A property management firm, however, deals with these sorts of issues on a daily basis. A property manager can quickly secure bids, recommend your best option, and initiate the work in short order.

Increases Your Property’s Profitability

A well-maintained center is certain to attract customers. A well-patronize center is far more likely to host productive tenants that remain in place for an extended period of time, thanks to their consistent consumer draw. And a center fully leased to successful tenants is the key to maximizing your property’s profit potential.

A property management firm diligently monitors your center’s physical condition, oversees maintenance, and holds vendors accountable. The results of which ensures your property is appealing to your tenant’s customers, and in turn, keeps your tenants happy. And that means you can rest assured your property is achieving its peak profit potential.

Avoids Legal + Financial Non-Compliance Issues

There are no shortage of laws governing your property. And failure to comply with any of these myriad legally binding rules and regulations could spell fines, lawsuits, and other financially disastrous outcomes.

Additionally, federal, state, and local governments are working hard to ferreting out revenue. Any miscues in handling financial documentation, income reporting, or tax filings could result in massive fines, penalties, and worse.

With a property management company handling your property, you don’t have to worry about any of these issues. Your property manager will keep you appraised for legal statues and other legislative changes that impact your property. And help you navigate the process should such laws require modifications to your shopping center. This includes ADA compliance, which has been an enormous financial thorn in the side of scores of retail property owners.

Additionally, a property management firm’s accounting departments logs, tracks, and fully documents every aspect of your property’s financials. These efforts yield the most complete financial record you could hope for. And at year-end, you can simply turn over your general ledger to your CPA!

Minimizes Your Tenant-Related Headaches

Tenants are demanding and relentless. And their constant barrage can be irritating and emotionally draining. Additionally, it can be awkward and uncomfortable to play the role of the “bad guy” in turning down a tenant’s request or enforcing the terms of their lease.

A property manager, however, acts as a buffer. All tenant communications funnel through your manager. And your manager will exercise a “firm but fair hand” in imposing your will.

Enhances Your Property’s Investment Value

A fully leased, well-maintained, financially stable shopping center populated with successful tenants represents an incredibly valuable asset.

And the services a professional property management firm provides is your best opportunity to achieve this status with your retail property.

THE CONS OF HIRING A PROPERTY MANAGEMENT COMPANY

Property Management (Might) Cost Your Money

If your property is not leased on NNN leases agreements, you must pay a monthly management fee.

**As a brief aside… CBM’s leasing expertise can also assist with converting current tenants to NNN leases. For more info on CBM leasing, visit our website leasing services page: cbm1.com/services

Additionally, if your property is on NNN lease agreements, but there’s a vacancy, you may have to make up the portion of the management fee not covered by the missing tenant.

If your property is fully leased on NNN leases, however, your management fee is bill back to your tenants as part of your NNN charges.

You Must Give Up a Measure of Control

Some landlords like to collect monthly rent. They like to pay all the bills. They like to see, personally, all the monies coming in, and all the monies going out. Some landlords like to communicate directly with tenants, to the negotiated agreement and cut their own deals. This level of direct oversight and active involvement provides these landlords the assurance that the buck stops with them.

In working with a management company, however, you must relinquish some control. You don’t see the rent checks coming in or the bills going out. Instead, you see a monthly financial statement that charts these collections and payments. And you must have a measure of faith in the management company diligently executing their duties.

Are you’re the sort of landlord that insists upon personally monitoring every aspect of your property? Are you only comfortable relying only on yourself? Is so, then professional property management is probably not for you.

How Can CBM’s Property Management Services Benefit Your Retail Property?

If the PROS outline above outweighed the CONS in your mind, you should consider hiring CBM to manage your shopping center.

For more information, visit: cbm1.com/services


Is the City of Los Angeles finally relenting to loud and persistent protests against the massive waste hauling and recycling collection fee increases instituted in 2017?

LA City’s recent announcement of fee eliminations seems to indicate a move in the right direction on a very troubling issue for commercial property owners and income property investors.

The increases, instituted midyear 2017, got a great many retail shopping center landlords hopping mad, and with good reason.

In some cases, rate increases were as high 400%. And in addition to price hikes, many property owners reported missed collections, which left their dumpsters overflowing with rancid trash.  Owners also reported being billed for waste collections that never occurred.

To quickly review, LA city government introduced the “Department of Sanitation Franchise” in 2017. This department gave exclusive domain for trash collection to seven waste hauling companies. And those companies, in turn, were assigned specific districts.

Thus, if, for example, your property is situated in District One, your ONLY trash collection option is the waste hauling company assigned to District One.

And with ZERO competition, waste hauling firms were free to jack up their rates and tack on a plethora of “extra service” fees.

But now, according to an LA Times report, a couple of these fees are being eliminated.

Following a 15-month battle between the City, waste hauling firms, and business organizations representing the interests of property owners, a “compromise” has been struck in the recent settlement deal.

The current fee eliminations include…

100 Foot Distance Fee

Under original provisions, waste haulers were allowed to charge an additional $26.68 anytime a driver had to haul a recycling bin more than 100 feet.

200 Foot Distance Fee

Also under original provisions, waste haulers were allowed to charge an additional $37.36 anytime a driver had to haul a recycling bin more than 200 feet.

Under the settlement terms, both of these fees have been eliminated.

Reimbursement

The settlement also dictates that customers who were charged “extra service” fees (on any service bill issued since February 2018) will receive a credit.

Good, But Not Great

Of course, income property owners appreciate these fee eliminations. Every little bit improves their bottom line.

But unfortunately, the settlement does nothing to address the exorbitant waste hauling rate increases. An issue that still has many property owners seething!


By Geoff Grossman
CBM Retail Specialist

Have you looked at the Southern California landscape lately? The entire region has been…

Overrun with Mixed-Use Developments!

SoCal is in the midst of a full-blown transformation. It’s happening on countless main drags. And even on many lesser traveled thoroughfares. Streets, avenues, and boulevards are bidding farewell to the low-rise multi-family dwellings and street retail shop space that once dominated this concrete jungle.

And rising up in their place? A bevy of mid-rise mixed-use developments. Multi-purpose properties featuring street retail units situated underneath apartment residences are being constructed as quickly as over-eager developers can possibly manage to erect them.

Practically speaking, the move toward mixed-use development totally makes sense…

What’s the one thing you can’t make any more of? Land. And Southern California is clearly fresh out of this non-renewable resource.

Further exacerbating this shortfall, the region is facing a catastrophic housing shortage. Which is destined to grow far, far worse before we see any indication of improvement. And this is a clear guarantee, as the Southland’s surging population growth shows no signs of waning.

In turn, the cost of the dirt alone, the real value in SoCal real property, has risen to astronomical heights. And that’s all before you factor in exorbitant design, engineering, entitlement, and construction costs.

So, how do you address land scarcity, prohibitive development costs, and strong housing demand in the face of a huge shortage?

The only option that remains: Verticality. Go UP! Hence, the current mixed-use development explosion.

The Problem – From a Retail Standpoint – With the Current Mixed-Use Development Trend

The growing mixed-use growing trend may be a practical, savvy approach to land-use in the face of challenging circumstances. The execution on the retail side of the equation, however, is falling severely short.

Scores of new mixed-use projects have risen with retail units that, in their current state, are essentially un-leasable. While other buildings have seen promising, highly sought-after tenants come and go at an astonishing speed. And these unexpected tenant departures that have left high profile vacancies in prominent locations in their wake. All because the units proved impractical for retail purposes.

Key Factors Negatively Impacting Retail Units in Mixed-Use Developments

Projects Helmed by Developers With Little to No Retail Construction Experience

The majority of recent and currently in development mixed-use projects are being handled by residential-focused developers. In other words, developers experienced in building apartments and condominiums. Not retail projects.

And it makes sense, as the majority of these projects are dedicated to residential use. But this residential focus has largely excluded any concern for the retail portion of these developments.

Architectural Design Flaws Are Limiting or Excluding Countless Retail Uses

Multi-family residential developers are fixated on their “cost per door.” As a result, mixed-use developers are intent upon maximizing residential space, while in turn minimizing overall construction costs.

This leads to architectural designs that incorporate retail space almost as an afterthought. A move which yields space that’s unsuitable for any potential tenants currently active in the marketplace.

And therefore, renders the retail portion of these new developments effectively un-leasable.

Drilling down into the problem, here are the five major architectural issues inhibiting the absorption of retail units in mixed-use developments…

Descending Rooflines

Both to maximize residential unit space and serve aesthetic design considerations, mixed-use building rooflines are descending far too close to street level. This creates very short storefronts, which seriously limits visibility for ground floor retail units, heavily obscuring shops from both auto and foot traffic.

Narrow Storefronts

In the majority of mixed-used development, frontage is limited, while depth is plentiful. Thus, to accommodate more retail units (and accommodating as many residential units as possible, which is every residential developer’s goal), most mixed-use shop is exceptionally narrow. This reduces store frontage, which, similarly to descending rooflines, significantly limits visibility to both auto and foot traffic.

Oddly + Oversized Shaped Units

As noted above, mixed-use developments face some unique spatial challenges. To maximize the use of available space, developers are inclined to make units deep and narrow.

Also, as I mentioned, narrow units, and the resulting limited store frontage are a major drawback for most retailers seeking to maximize their storefront display opportunities.

Additionally, deep units tend to yield a good deal of square footage, often in excess of 2,000 SQFT. Meanwhile, most tenants ideally suited to typical mixed-use developments – hair + nail salons, medi-spas, private fitness studios, and quick-serve restaurants – are seeking anywhere from less than 1,000 SQFT up to a maximum of 1,400 SQFT.

As a result, mixed-used developments are struggling to find tenants due to their impractical unit footprint. Or developments wind up with tenants that are forced to over-pay for excess space they simply don’t need. And these tenants often don’t stick because their profit margins don’t justify their rent.

Lack of Forethought or Planning to Accommodate Restaurants + Food-Use Tenants

Restaurant and food-service tenants have very specific mechanical requirements. Venting for cooktops, ovens and other food heating equipment is a MUST. And grease-receptors to handle the by-products of cooking and other food preparation are also a necessity.

Additionally, proper venting must (a) be constructed to code, (b) have a practical pathway to a building’s exterior, and c) not adversely impact the residential units.

Also, a portion of a grease-receptor’s apparatus must be buried underground in a specific spot relative to the unit the receptor serves and must readily accessible.

Suffice it to say, a good deal of pre-planning is required at the architectural design phase in order to properly orchestrated the infrastructure necessary to accommodate restaurant tenant.

Meanwhile, many new mixed-use developments lack all accommodations for cooking-related venting or grease receptors. And as such, these developments have completely excluded any food-use tenants that cook food onsite.

Lack of Planning for Parking Requirements

Municipalities have minimum parking requirements for retail properties based on use-type. Food-use tenants, for example, generally require more parking, as restaurant patrons tend to linger longer than customers of other retail outlets.

Mixed-use developments already include parking to accommodate residents. But developers often fail to account for the parking necessary to accommodate retail customers.

Additionally, typical parking requirements should be eased in mixed-used developments these buildings already include onsite parking. Yet many developers fail to seek preliminary waivers and other parking concessions from municipalities in the planning and construction phase.

In either case, many tenants are denied operator permits because available parking does not meet the requirements for their particular use-type.

The Solution?

Based on the assessment above, the deck is heavily stacked against retail inclusion in a great many existing mixed-use developments.

Is there a way out of this mess?

The good news is: Yes! But it will require additional effort, forethought, and further capital investments on the part of mixed-use developers.

Planning For Retail in the Project Design Phase

Speaking in terms of new projects, developments should be designed with the necessary accommodations for retail units in mind from the very beginning. Proper roof lines, adequate store frontage, functional unit sizes and configurations, patio space, considerations for potential use-types (restaurants, smaller square footage users, etc…), and adequate parking allotments for retail should all be baked into original project designs.

Renovations

For existing projects, any possible renovations should be strongly considered. Adjustments to roof lines and storefronts, demising interiors to create more functional space, adding exterior patio space, excavation to install grease traps, and additional building construction to connect venting for ovens and stoves.

Alternative Uses

For developments in which renovations are impossible, developers most definitely must think outside the box to fill their retail vacancies.

This means considering tenants atypical for most mixed-use develops.
Options include:

== > CrossFit gyms, yoga schools, and other specialized personal training

== > Veterinary clinics, animal hospitals, and pet stores

== > Daycare facilities, early learning centers, private academies, and tutoring service providers

Additionally, tenant rep brokers also need to think outside the box. Brokers need to look beyond shoehorning in “typical” mixed-used tenants, the majority of which are a no-go in many existing mixed-used develops. And instead, seek alternative users that are more capable of using spaces as-is, and more likely to succeed financially in the long term.

Rent Reductions

And if all else fails? Many developers are going to have to bite the bullet and make financial concessions. This manifests as either offering rent-deductions to existing tenants or reduced rental rates on current vacancies to make these spaces more feasible for potential tenants.

The Bottom Line…

Mixed-use develops make undeniable practical sense. Moreover, such developments represent a huge economic potential for savvy investors.

But currently, this real estate segment is in an enormous state of disarray.

And unless developers take decisive action, and do so quickly, Southern California is going to wind up with a colossal glut of very expensive vacancies, and zero willing takers anywhere in site.

How Can CBM Help?

We have a collective 80 years of shopping center development, sales, leasing, and management experience under our belts. During our 30+ year tenure in the industry, we’ve leased and managed thousands and thousands of retail properties for hundreds of landlords across Southern California. And that includes more than our share of mixed-use developments.

With this sort of track record, it’s more than fair to say: We’re the retail EXPERTS!

But there’s another factor that figures into this equation. CBM was found by La Mancha Development, formerly one of Southern California’s most successful strip center development firms. La

Mancha designed, built, and sold thousands of strip centers throughout the Southern California market. Just about every 7-Eleven anchored strip center you see between Santa Barbara and San Diego was built by La Mancha.

That’s where our “80 years of collective shopping center development, sales, leasing, and management” expertise is drawn from.

So, not only do we know the retail leasing market. We know the ins and outs of what yields a successful retail development, too.

Before You Start Your Next Mixed-Use Development…

Before your team even settles in to discuss potential project designs, come to us first. We’ll present a practical perspective on what works for retail in a mixed-use property, including:

== > An overview of ideal tenants for your project

== > Functional design elements necessary to adequately accommodate those tenants

== > Required infrastructure for restaurants and other specialty tenants

== > Parking subdivisions to create dedicated retail parking in either subterranean lots, adjacent to resident parking, or separate surface retail-only parking

== > How to create a “parking plan” (that underscores reduced parking needs due to ride-share services like Uber + Lyft, rental scooters like Bird + Lime, and increased public transit use thanks to the ongoing Metrorail expansion) and approach municipalities in advance and successfully negotiate zoning modifications to ensure incoming tenants will secure use permits and meet municipal imposed parking requirements

== > And much, much more!

CBM is Your Best Resource to Develop a Successful Mixed-Use Project

Find out more about how our leasing services can benefit your next mixed-use development at: cbm1.com/services

About the Author

Geoff Grossman is retail leasing + sales agent specializing in landlord representation throughout Southern California. Mr. Grossman launched his commercial real estate career in 1999 when he joined CBM as a leasing agent. Since that time, Geoff has leased + sold thousands of retail properties, and participates in an average of 100 leasing + sales transactions annually.


The entire CBM organization gathered at Guido’s, a lux Italian restaurant on the Los Angeles’ Westside, for our annual holiday party this past Thursday.

What a scene! The team thoroughly enjoying fine dining, a few choice cocktails, and merriment galore! But the group also reflected on the value of our shared experience. And celebrated the collective that makes up CBM’s sum total.

In this review, each attendee took a moment to share a bit about themselves. Their background, what brought them to CBM, how long they’ve been with the firm, and what they’ve appreciated about their tenure here.

And amid many hilarious tales, heartfelt remembrances, and warm regards, a theme emerged. CBM isn’t just a company. Management isn’t just a gang of taskmasters. And our team aren’t just a bunch of employees. We are a family. And collectively, we continually help and support one another. Looking out, lending a hand, and lifting each other up at every turn.

So, with another year in the books, we bid a fond farewell to 2018, and look toward 2019 with great anticipation!


After nearly 30 years in the saddle with CBM, veteran property manager Dan Hirsch has decided to hang up his profession and move on to life’s next great adventure!

“I hope to do some traveling, as much as my vision permits,” said Dan, comically squinting his eyes, and adding “But I’ll be available for consulting on as-needed-basis. Though my hourly rate will be fairly steep.”

Dan’s rye comments underscored one of his most celebrated traits, his unflappable sense of humor. In addition to his humor, Dan’s always calm and collected approach has been the hallmark of his lengthy property management career.

These sentiments were echoed by several fellow CBMers who’ve been in the trenches with Dan for many years, including CFO Roger Sur, Controller, Janice Adair, and fellow property managers Pamela Ozell + Roselene White, each of whom lauded Dan’s exceptional wit and even-keeled temperament.

All of CBM wishes Dan the very best after he formally parts ways with the firm this December 31st!


It’s no secret to anyone in the commercial real estate industry that retail leasing transaction volume has slowed.

Commercial real estate reached the height of its resurgence, amid the full bloom or our “economic recovery,” roughly 18 months ago.

In the ensuing months, however, deal velocity has slowed, and fewer leases are getting done. This isn’t to say the market has ground to a halt or is anywhere near careening off a cliff. If anything, the recent down-turn is normalization. The huge upswing in leasing transactions over the past three years was unsustainable. And the recent shift is not unlike a correction in an inflated and over-valued stock market.

Key Factors Contributing to the Current Retail Leasing Decline

While “corrections” are inevitable in any market, there are three specific factors underling this latest falloff.

The Economy is BOOMING!

First and foremost, the economy is exceptionally strong. Commercial enterprises of all stripes are prospering in a financially stable environment that shows no signs of erasure. And this is particularly true among small businesses, which comprise a dominant chunk of retail strip center tenants.

Meanwhile, much of retail leasing volume hinges on turnover. In many cases… A new tenant goes in, and either their business fails before the term of the lease is up and they vacate. Or, they hang on until the end of their lease but chose not to renew because their business is ultimately unprofitable.

And this fairly consistent turnover creates a stead volume of vacancy, which in turn leads to new deals.

But given the economy’s remarkable strength currently, few strip center businesses are failing. In fact, a great many small businesses are more profitable than ever!

Inventory is Exceptionally Low

Secondly, much of the vacancy that blighted retail shopping centers in the depths of the “great recession” has been reabsorbed. This is particularly true of top-tier, A and B quality spaces (which command the steepest rents).

In essence, the aforementioned thriving economy has driven vacancies down to extraordinarily low rates. And as a result, there is simply very little desirable inventory available at the moment.

Many Landlords Are Harboring Unrealistic Rental Rate Expectations

The third factor, however, is actually the biggest culprit behind the slowing deal volume in the retail strip center segment.

And that factor is? Unrealistic expectations among strip center landlords on the rental rates their remaining vacancies are able to command.

As already noted, the vast majority of A and B quality space has been snapped up. These are your Main + Main locations, end-caps, high street visibility units, and the other highly desirable spaces.

So, what’s remaining? These are your C, D and E quality spaces. Centers a bit off the beaten path, elbow units, obstructed in-line spaces, and other less than desirable sites.

Ultimately, however, these spaces can, and should, lease as well. As the only saying goes… “Everyone (in this case, every tenant) has their price.” But the cold, hard reality is C, D and E quality spaces command lower rents. And the “price” these types of units should be offered at is markedly lower than A and B quality spaces.

Low inventory, however, has sent retail rents skyrocketing. And many strip center landlords have either been spoiled by the high dollar deals they’ve secured on A and B quality space or are pining for deals they’ve heard of other owners transacting on similar space.

Meanwhile, these landlords are being completely unrealistic about the quality of their remaining C, D and E vacancies. In short, they’re looking for A and B quality rental rates on C, D and E quality space.

The Solution?

It’s high time to gain some perspective on the quality of your product. C, D and E quality spaces are inherently flawed. Poor location, low visibility, obscure size, etc… make these units distinctly less desirable.

And less-than-desirable spaces do not command top dollar rents. It’s simply a fact. Thus, it’s time to stop comparing your C, D and E quality spaces to A and B space, be realistic about the value of

these units, and ask for reasonable rents.

Need Help Leasing A Long-Lingering Vacancy in Your Shopping Center?

Are you one of the landlord’s struggling to fill a difficult to lease space? CBM’s industry-leading leasing team is here to help! Our crew has leased PLENTY of seemingly UNLEASABLE space in our 30+ year tenure in SoCal retail real estate. And our agents know exactly what it takes to lease your vacancy.

For additional information about our leasing services or to hire a CBM leasing agent to lease your shopping center, please visit our Services page: cbm1.com/services


From the youngest to oldest, three veteran CBM team members both celebrated recent birthdays.

David Levcovitch, long-time Encino-based leasing specialist, is well into his 7th decade here on planet Earth. Meanwhile, Jeff Lerner, CBM’s IT manager, has good 40+ years of ground to cover if he ever hopes to catch up with David. And somewhere in between is Ms. Tina Flor, property manager extraordinaire (and that’s all we can reveal about her exact age ;—)

Regardless of their age gap, this fabulous trio came together and celebrated their birthdays with CBM’s entire Encino office. And we have the pix to prove it!

Congrats and happy birthday to David, Tina + Jeff — here’s to many, many more!

[Check out the happening on video here!]