In a recent post, we outlined the legal steps necessary to remove a homeless person from your shopping center.

But as that post illustrated, taking the legal route is a time consuming, arduous, and often ineffective approach… Unfortunately, many homeless habitually return to centers over and over, even after an arrest and jail stay, which is usually short (as trespassing is a misdemeanor charge).

This is largely because a great many homeless are mentally unstable and tend to frequent locales they’re familiar with or comfortable in.

So, if legal action is a stalemate, what’s the solution to keeping the homeless off your property?

Here are seven strategies that have proved successful in discouraging homeless from taking up residence at retail shopping centers:

Redesign Landscaping

Large bushes and shrubbery positioned alongside buildings make for excellent blinds. The homeless can hide or sleep behind such vegetation day or night..

Alternatively, succulents (for ground cover) and palm trees eliminate convenient hiding places.

Diligently Trim Landscaping

But what if a complete landscape replacement planting is NOT in your budget (which is certainly true for many)? Attentive landscaping maintenance is your next best alternative.

Regularly pruning bushes and shrubbery, ensuring they’re lean and trimmed back goes a long way toward eliminating common hiding places for would-be homeless campers.

Secure Dumpsters, Trash Enclosures, Storage Sheds, and Other Out Buildings

Just about every strip center has a dumpster for trash and recycling collection. And many have trash enclosures (technically intended to keep people out of dumpsters), well others also feature storage sheds or other out buildings.

Unfortunately, these containers and storage areas are among the most popular hiding spots and sleep quarters for homeless campers. Ensuring such containers and areas are always under lock + key provides a strong deterrent.

Restricting Access to Any Areas Open to Potential Loitering

Many strip centers have overhangs and alcoves in various places around the building exterior.

Gating, fencing or otherwise limiting access to these areas eliminates another hiding and sleeping spot popular among homeless campers.

Preventative Maintenance

The clutter of litter and trash gives a property an unkempt aura. And such locations seem to invite transients, as they tune into the vibe that: “no one maintains this property, so no one will bother me here.” Moreover, homeless tend to blend into poorly maintained centers, appearing to be part of the property’s “natural landscape.”

The presence of homeless is quite apparent, however, at a property that’s clean, clear and well-maintained.

As such, keeping your property clean and well-maintained is another strong deterrent.

Onsite Security or Security Patrol

If homeless loitering or camping at your center is a particularly egregious problem, and the legal route has proven ineffective, private security is another option.

Of course, you would bill the service back to your tenants as a CAM expense. Given the added cost, however, private security only makes sense if tenants agree the homeless presence is a strong detriment to their business, and security is only reliable recourse.

But keep in mind, there are options to mitigate costs. A regular security patrol is a lower cost alternative to permanently installing a security guard onsite.

Proactive Response Plan

Whether you’ve gone the legal route and have a standing police order, contract with private security, or have designated a property manager to deal with the homeless, defining a specific response plan is a useful tool.

If a tenant notices a loitering transient, who do should they contact first? And how is the response escalated from there?

A swift and consistent response is often an effective deterrent to homeless occupation of your center.

Need Help Clearing the Homeless From Your Shopping Center or Managing Other Aspects of Your Retail Property?

For many retrial strip centers, homeless are a fact of life. And any hope of completing eliminating the problem is unlikely to come to pass.

But as outlined above, there are strategies to mitigate the problem. And hiring a professional property management firm can help!

A property manager can…

== > Solicit competitive landscaping bids, should you decide to redesign your landscaping.

== > Monitor landscaping and oversee vendors to ensure your center’s vegetation remains trimmed and lean.

== > Monitor dumpsters, trash enclosures, and other storage facilities to ensure they’re clear homeless intruders and locked up tight.

== > Monitor sweeping and trash collection vendors to ensure your property remains clean and clear of trash and other debris.

== > Solicit bids for security services, should you decide to hire private security.

== > Act as the contact point-person in your proactive response plan, initiating either police or security contact.

Meanwhile, this is a just thin sliver of the services professional property management provides.

For More Information on CBM’s Property Management Services…

Visit our Services page at cbm1.com/services.


We’ve all seen them, right?

Shopping centers in which vacancies appear to linger forever. And sadly, when empty shop spaces hang around, vacancies seem more apt to increase, rather than the other way around.

And if you’re a shopping center landlord, this is an all too familiar, not to mention frustrating scenario. Especially when you’ve hired a leasing broker to fill your property’s vacancies.

It’s also a sign…

That it may be time for some “new blood.” In the retail real estate industry, this phrase means it’s time to bring in a new leasing agent with fresh perspective and potentially a new bag of tricks to get your center leased.

The fact that new blood me be in order doesn’t diminish your current agent or their efforts to lease your property. Truthfully, your agent is likely perfectly competent. But for whatever reasons, their undertakings have fallen short.

And in this situation, a new agent is often preferable to letting your center remain vacant. Because for a landlord, there’s nothing more anguishing than watching your profits evaporate, while fretting that other tenants may be contemplating jumping ship, too.

And lingering vacancy is not the only sign it’s time for some new blood. Other agent habits also indicate the need for a change.

Toward that end, here are three signs that it’s time to hire a new leasing agent…

Infrequent Communication

A dedicated agent regularly updates landlords. Your leasing agent is your conduit to what’s happening with your property. As such, your leasing agent should be reporting to you at least once a week. Even if the update is: “nothing new to report.” In the absence of regular updates, you’re left completely in the dark and wondering what’s happening with your property???

Moreover, you’re paying for your leasing agents services. You shouldn’t have to chase them for information. Instead, keeping you informed should be your agent’s #1 priority!

Undocumented Leasing Efforts

Even is a leasing agent quickly leases a vacancy, as a landlord, you can’t help but wonder: “What are these guys REALLY doing for me???”

It’s easy to take your leasing agents efforts for granted. But a dedicated agent, however, is hard at work sourcing a quality tenant for your property.

And such agents documents their efforts with progress log. This log includes all…

== > Incoming tenant inquires (whether from sign calls, LoopNet or web-search, referrals, etc…)

== > Tenants contacts (dedicated agents maintain active tenant lists and promote new listings to those tenants)

== > Tenant rep brokers contacts (dedicated agents cultivate strong relationships with active tenant rep brokers and promote relevant new listings to those brokers)

== > Corporate real estate reps the agent has shared the vacancy with (listings in exceptional locations may interest corporate tenants. And savvy agents have avenues by which to reach corporate real estate reps and promote relevant listings to those reps)

Poor Follow Through

If you’re like many landlords, you’ve probably received a call from a prospective tenant that sounds something like this…

“I left 17 messages for the listing agent, and they haven’t returned any of my calls!? I REALLY want to lease your space! PLEASE CALL ME.”

The “17 messages” claim is likely an exaggeration. And of course, leasing agents have their own tenant vetting process. But a tenant that’s motivated enough to seek out a landlord’s contact info and reach out directly is at least worth a callback.

Never mind that your agent should follow up on all tenant inquiries. And report the outcome to you, whether the lead pans out or not.

Need Some New Blood to Lease Your Shopping Center?

If, in addition to lingering vacancy, the other points outlined above resonate with you, it may be time to consider bringing in some “new blood” to lease your shopping center.

And if you’re in the market for new leasing services, CBM can help! Since 1987, we’ve served hundreds of landlord’s, leasing thousands of retail spaces throughout Southern California.

For more information, visit cbm1.com/services.


Broad Yet Subtle CRE Changes Coming Through Tax Reform

By Globe St. December 27, 2017

“The new tax law is generally benign for commercial real estate, but there are many nuances that will affect investor’s real estate and their after-tax returns,” says John Chang.

CALABASAS, CA—The passage of the long-anticipated tax reform legislation will take effect next year, leading many investors to the arduous task of recalibrating their strategies and assessing how the changes will affect their assets. As John Chang, first VP of research services for Marcus & Millichap, explains, “The new tax law is generally benign for the commercial real estate sector, but there are many nuances that will affect real estate and the after-tax returns of investors.”

Before considering some of the specific provisions, it is worth noting that the simple act of passing tax reform legislation itself could significantly benefit the sector. The clarity on tax reform will reduce the uncertainty that has weighed on the marketplace. As Chang states in a Special Report issued by the company, commercial real estate investors who may have been hesitant to move previously, will now have a much better understanding of the investment real estate landscape and can formulate a plan under the new rules.

“Over the last year, a more cautious outlook pervaded the industry as investors awaited clarity on taxes, fiscal policy and a change in Federal Reserve leadership, causing many investors to move to the sidelines,” says Chang. “That guarded approach to investment planning and underwriting could begin to ease as the implications of the new tax rules are better understood, and investors are able to assess their investment strategies with a new tax perspective.”

(Please click here for the Special Report and details of the tax changes. Highlights follow.)

For the commercial real estate industry, a notable concern over tax reform was the fate of 1031 like-kind exchanges. However, as Marcus & Millichap reports, the final version of the bill passed by Congress is expected to have no major impact on this area of commercial real estate investment. Other risk factors at the top of investors’ minds were the ability to deduct mortgage interest, how investment real estate depreciation would be handled and potential changes to carried interest. Though each of these very important considerations face some change, they were largely maintained in-tact.

From an asset performance standpoint, several changes by the new tax laws will affect specific property types. The elimination of the individual mandate requirement in the Affordable Care Act could hold ripple effects for healthcare real estate. According to Chang, “The elimination of the personal mandate is anticipated to reduce the number of insured by an estimated 13 million people by 2027.” That said, although having fewer insured could reduce demand for medical services by an estimated 5 percent, the actual impact on medical office space and seniors housing over the next decade should not be too impactful. Chang notes that “the direct effect on healthcare real estate performance should be nominal.”

Other changes to the tax laws that could impact asset performance are centered on owner-occupied real estate. The changes will likely bolster long-term demand for multifamily housing, stemming from provisions that increase the standard deduction and cap the deduction of combined property taxes and mortgage interest deductions.

“Increasing the standard deduction to $24,000 for married couples and $12,000 for individuals and capping the deduction on combined property, sales and state income taxes to $10,000 lowers the incentive to itemize deductions,” says Chang. “This shift could diminish some of the allure of homeownership for first-time buyers, and prompt additional demand for apartments.”

Finally, reduced taxes on pass-through entities may also have an enormous impact on commercial real estate investment. For current real estate investors who are not already using an LLC or other pass through business form, the new tax laws could spark an entire portfolio reevaluation as they restructure their business model. For investors who are not already in commercial real estate, the new tax rules offer prospects of higher after-tax yields than other investment options. This change could entice significant additional capital to the CRE marketplace.

In all, the clarity the new tax law provides will position investors to make more informed decisions and leverage new mechanisms to optimize their investment strategy. With the enactment of the law, it is important for investors to reevaluate their strategies now so they are poised to maximize value when the law goes into effect.


10 New Year’s resolutions worth keeping for every CRE broker

By Apto

How will you make 2018 your best year yet?

We looked back at a year of blog posts to bring you the 10 New Year’s resolutions every broker should consider making—and keeping—in 2018. Feeling inspired? Pick one of these ideas and make it happen. Remember, success isn’t just about reading something and bookmarking it for later: it’s about turning what you learn into action.
1. Always be prospecting.
Most brokers don’t prospect enough, while the best brokers prospect constantly. This year, make prospecting the first and last thing you think about when you get to the office, with these 7 ideas for better prospecting. (For even more inspiration, check out the 23 conversation topics you can use while prospecting, plus insights on where the best leads come from.)

2. Make better connections.
To be a good broker, you need to make more connections—shake more hands, make more phone calls, contact more prospects—but to be a great broker, you need to make more and better connections. This year, find the right balance between quantity and quality when it comes to professional relationships. Check out our guide to building better rapport with just about anyone, as well as these 9 creative networking ideas and 5 ways to make networking a painless part of your life.

3. Do one thing at a time.
Multitasking may be your default setting, but it’s more likely sabotaging you than helping you (and we bet you don’t even know it). Instead, commit to monotasking, or doing just one thing at a time. When you pare things down, you’ll be amazed at how much you actually get done.

4. Banish procrastination.
If you’re one of the 20% of adults who constantly struggle with procrastination, these simple steps may help. Learn how to build momentum, break big tasks down into doable chunks, and stop deceiving yourself about where your time is actually going. Your time is valuable—don’t fritter it away on procrastination.

5. Tackle a weakness.
We recently heard from a broker who turned one of his biggest weaknesses, social anxiety, into a strength. What’s the one weakness that’s holding you back from being at the top of your game? Attack it with the ultimate goal of making it your strength.

6. Find a mentor.
One of the biggest reasons brokers fail is because they think they can do it all themselves. But to get to the next level, you absolutely must find a mentor who can guide you wisely, open doors, and help you grow. Sure, you may do just fine without one—but not having a mentor is like driving in the slow lane for the rest of your career.

7. Get something out of every “no”.
To survive as a broker, you just have to get comfortable with people telling you “no”. And since you’ll be hearing it a lot, you might as well make the most of it. Next time you get rejected, respond with curiosity instead of defensiveness. And when you get an objection, practice turning it into an opportunity.

8. Make success automatic with smart habits.
Habits hold more power over your daily work (and ultimately, your success) than you probably realize: 40% of what you do each day is pure habit, which means you don’t even think about it while you’re doing it. Here’s how you can tweak your habits to make success automatic.

9. Learn a new way to listen.
You know you should be a better listener—but what exactly does that mean? We’ve got 4 advanced listening strategies that you may not have heard about but that will set you apart from everyone else who’s just nodding along.

10. Go for a walk.
Combine this with your resolution to be more active this year. We’ve got the scoop on how walking the neighborhood, checking out community happenings, and doing more away from the office can actually bring more business to your office.

We hope you enjoyed these ideas for 2018, and that you’ll put a few of them into practice. From all of us at Apto, here’s to your growth, success, and happiness in 2018

View the original article here…


Retail Landlords Struggle With the Logistics of Backfilling Vacated Space with Entertainment Concepts

By REBusiness Online, January 2, 2018

With multi-level hitting stations and open driving ranges, Dallas-based Topgolf epitomizes the high degree of variability in spatial requirements for entertainment concepts.

With multi-level hitting stations and open driving ranges, Dallas-based Topgolf epitomizes the high degree of variability in spatial requirements for entertainment concepts.

As 2018 gets underway, retail real estate finds itself at an odd juncture.

According to CNN, more than 6,700 stores either closed or announced plans to close in 2017, leading many to consider last year to be the beginning of the end for brick-and-mortar shopping. Yet a new report from Tennessee-based retail advisory firm IHL Consulting Group notes that for every company that closed stores in 2017, there were nearly three companies opening new stores to offset it.

Whether you believe retail is dying or evolving, there’s no arguing that the inability of certain tenants — mainly apparel-based department stores — to compete with e-commerce has caused millions of square feet of retail real estate to be returned to the market.

Owners of these properties face the challenge of backfilling these spaces with tenants that aren’t likely to share the same fate — restaurants, gyms and entertainment concepts. But when it comes to backfilling a big box or anchor space with an entertainment concept, merging the existing space with the design requirements of the tenant can be a major headache for landlords.

With 58 million square feet of project designs under his belt, Randy Stone, associate principal at Dallas-based architecture firm Omniplan, knows that every entertainment project has different spatial requirements. The primary dilemma that both architects and developers face with these projects involves whether to scrape the existing structure or to revamp the structural grid in place.

“When you’re repurposing or backfilling a big box, you first have to determine whether to tear it down, take off the top floor, retrofit the existing structure or force the design of the entertainment component into the existing structure,” says Stone. “You have to do your due diligence and have testing labs come in and find out what the structural grid can support.”
Adding a ropes course to its lineup of activities generates additional revenue for Cinergy, but also requires minimum ceiling heights of 22 to 25 feet.

Adding a ropes course to its lineup of activities generates additional revenue for Cinergy, but also requires minimum ceiling heights of 22 to 25 feet.

Stone adds that traditional big boxes don’t usually work for entertainment tenants, which have smaller overall footprints but want clear-span, open-environment layouts. As such, he says, many theaters and entertainment concepts must design smaller facilities in order to fit in marquee locations.

Tenant Perspective
Jeff Benson, founder and CEO of Cinergy Cinemas and Entertainment, is currently experiencing firsthand the difficulties of introducing his concept into vacated retail spaces.

Cinergy, which offer laser tag, ropes courses, bowling and arcade games in addition to movies, food and beverages, is in talks with three malls to bring the concept to their anchor spaces. Cinergy would remodel the existing space in two of those malls if the deals close.

“The challenges of bringing an entertainment concept into an existing retail space are immense,” says Benson. “Columns and ceiling heights are usually the big issues. Sometimes you can work with them and sometimes you can’t, so the location really has to have the demographics to justify the cost of remodeling the space.”

Cinergy currently operates centers in Copperas Cove, Midland and Odessa, with another location under construction in Amarillo. The company has also closed deals to open centers in El Paso and Tulsa, Oklahoma, over the next several years.

“Our Tulsa center is backfilling an old theater and ajacent retail space and installing bowling and amusement,” says Benson.

“This requires careful consideration of the column grid and spacing. Our new-build prototype facilities are about 90,000 square feet, so it’s a big floor plan to retrofit into an existing space. We’d rather just scrape the existing structure and build from scratch.”

Vacated anchor spaces at malls make good locations for entertainment concepts, says Venture Commercial’s Larry Leon, a specialist in tenant representation for restaurant and entertainment retailers.
“Entertainment concepts typically go into malls for parking and a climate-protected place for families to line up,” says Leon. “These concepts often draw from huge circles and space their units 15 to 20 miles apart.”

Developer Perspective
From entertainment giants like Main Event and Topgolf to niche operators like Glowzone and Kidzania, there’s no shortage of competitors in the entertainment retail space, and each concept is its own beast in terms of spacing and design.

“One of the biggest challenges of leasing for entertainment tenants is that they don’t have consistent requirements,” says Gar Herring, president and CEO of The MGHerring Group, a Dallas-based owner, developer and manager of retail properties. “You can do build-to-suit projects for these users, but some want to buy and some want a turnkey deal, so you really have to be flexible.”

Preliminary design challenges aside, retail owners that opt for entertainment anchors should also be prepared to subsidize capital improvements to those spaces.

“Most entertainment tenants today require heavy tenant improvement investment by the landlord in the $200 to $300 per square foot range,” says Venture Commercial’s Leon. “Owners have historically been reluctant to provide this level of improvement dollars, but recently, they’ve come to realize the importance of these tenants to the overall mix, as well as the necessity of filling their big box spaces with tenants that will draw lots of people.”

Because the requirements of entertainment users vary so much from concept to concept, they often struggle to provide blueprints and prototypes to developers that want to feature them as anchor tenants. In addition, evaluating these users on traditional retail metrics can be misleading because there’s little benchmark data for them. The lack of comparative data can also muddy the waters when it comes to financing construction of build-to-suit projects, as well as acquiring stabilized properties anchored by entertainment tenants.

“Cap rates on centers anchored by entertainment users are just not as well-known,” says Herring. “You might get more cross-shopping with an entertainment anchor, but some developers still see the grocery anchor as a safer bet because exit cap rates on those assets are very straightforward.”

Parking Wars
If there’s one issue that every source interviewed for this piece agreed on, it’s that parking is a major point of contention in the world of entertainment retail. Whether it’s a theater, bowling alley, arcade, mini theme park or some combination of those concepts, they all tend to use large blocks of parking spaces for long periods of time.

While freestanding locations have only city codes to adhere to, operators of entertainment centers in malls and shopping centers routinely spar with landlords and other retailers over parking. Parking represents a co-tenancy haggling point for entertainment tenants vying for old spaces and a key challenge for architects tasked with designing new spaces for these users.

But despite all these potential headaches for tenants and landlords alike, in this day and age, very little retail product is insulated from e-commerce. For the time being, entertainment is a rare exception, so it just may be worth all the headaches and hassle.

View original article here…


Contrary to the belief Los Angeles would set the tone for legislation governing the legal sale of recreational marijuana, the city only began issuing permits this week.

As noted in a post just before the new year, licensed medical marijuana dispensaries are first in line to receive recreational pot sales licenses. But the first authorized sales in LA are unlikely to begin until early next week (sometime after January 8th).

Meanwhile, recreational pot sales have already begun in West Hollywood and several of the mid-cites municipalities surrounding Los Angeles proper.

On a Positive Note (For The Retail Business)…

In contrast to the legislation proposed by the LA City Council in mid-December, the city now plans to issue 600-700 retail pot sales licenses. This is up from the city council initial recommendation of capping sales licenses at 390 retail shops.

On The Downside…

Attorney General, Jeff Sessions, announced plans to end an Obama-era pot non-prosecution policy that allowed state-sanctioned medical + recreational marijuana sales.

There is still a congressional level budget clause that prohibits the Justice Department from spending money to prevent state-approved marijuana production, distribution, and sales.

But regardless, the increased threat of federal prosecution should give California retail landlords pause.


2018 is upon us… Can you believe it!? Where or where does the time go?

Anyway, if you’re like a lot of people out there, in the run up to the end of the year, you’re consumed with…

NEW YEAR’S RESOLUTIONS!

And what are New Year’s Resolutions, really? In a word, Goals.

Now, for most business owners and investors, annual goals involve improving your business and bettering your investments.

As a shopping center landlord, your property IS your business AND your investment. Thus, your goals for the New Year center on improving your property – thereby bettering your investment.

Here are three of the most common goals for shopping center improvement…

Reducing Vacancy

Are you struggling with lingering vacancies that you just can’t seem to fill? Despite the economy’s improvement, many landlords are in exactly the same boat.

If you’re facing this problem, here are the three most likely culprits:

Unrealistic Expectations

Endcap spaces in prime locations command high dollar rents. Inline and elbow spaces in sub-prime locations do not. It’s really that simple.

So if you’re dealing with a lingering vacancy, it may be time to consider lowering your asking rate or being more flexible with the offers you receive.

Also, if you’re trying to fill a larger space, it may be worthwhile to market small space availability, and offer tenant improvement dollars to subdivide the larger space.

For Lease By Owner

It’s certainly fair to say you know your property, likely better than anyone else. And having owned the property in its current location for some time, you’re probably knowledgeable about the surrounding area.

Leasing agents, however, are zeroed in on the tenants best suited to your property-type, the tenants active in the marketplace, and the real PULSE of the area. If you’re like most landlords, it’s doubtful you have the time to acquire and maintain this board of a knowledge-base.

And a leasing agent’s value doesn’t end with property-type and market knowledge. Typically agents have a list of tenants actively seeking space. And they’re connected to a city, state and even nationwide network of brokers and corporate tenant real estate agents all representing active tenants.

Hiring a leasing agent, who doesn’t get paid until your vacancy is leased, puts all of these resources to work in the effort to find you a higher quality tenant, faster.

Time For Some New Blood

Perhaps your property is already listed with a broker. Maybe it’s been listed with that broker for a long time. A REALLY long time. But with little or no results to show for the time and effort.

This doesn’t mean your current broker isn’t competent or qualified. And it doesn’t mean they’re not doing a good job.

Sometimes listings just get tired. There may have been a rush of activity when your property first came on the market. But that time has long passed, and now your empty unit is just one more in vast sea of vacancies.

In this scenario, the best thing to do is to bring in some new blood. A new broker with a fresh perspective, different connections and another approach to leasing your vacancy.

Lowering Property Expenses

Your shopping center is an investment, right? It’s supposed to generate money. Not rack up costs.

Yet each month as look down your list of property expenses, you scratch your head and wonder “what are all of these charges!?”

Unfortunately, it does cost money to maintain a shopping center. But there is a strong possibility that you’re paying for more than you have to.

Here are three potential property cost-reducing strategies:

Lower Your Vendor Expenses

Of course vendors are necessary to maintain your property. But are their services REALLY worth what you’re paying? In other words, is the quality of the service your current vendors provide really worth the fees they charge?

Could it be other vendors provide comparable or even superior quality services for less money? Seek bids from alternative vendors, and you’re likely to find higher quality, lower cost providers begging for your business.

Reassess Your Property Taxes

The economy has certainly improved since the depths of the Great Recession. But that doesn’t mean your property’s value has rebounded to its pre-recession level. And that means in all probability, your property’s current assessed value exceeds its actual market value.

Fortunately, there are companies that specialize in reducing commercial property assessments. They don’t charge a dime unless they’re successful in lowering your assessment. And their fee is merely a percentage of you assessment reduction.

Convert to Triple Net (NNN) Lease

We probably don’t need to reiterate the details of how a Triple Net lease works, but here’s a quick crash course… Your tenants pay for your property taxes, building insurance, and common area maintenance (with a charge added to their monthly rent).

If your tenants aren’t on Triple Net Leases, your property expenses are SIGNIFANCLY higher than they could be.

But this is an easy fix. As existing tenants come up for lease renewals, and as new tenants enter your shopping center, sign them to Triple Net Leases. It’s the single largest property expense reducing tool at your disposal.

Maintenance

As we’ve already discussed, your property is supposed to generate money, not vacuum it out of your bank account. That’s what makes maintenance, especially big, expensive projects such a bitter pill.

But the reality is, the condition of your property is directly proportional to its value and income generating potential.

Deferred Maintenance

A property in poor physical condition, with lingering issues – leaky roof, cracked and deteriorating parking lot and sidewalks, dying or dead landscaping, ADA non-compliance – isn’t well-patronized. And it winds up filled with frustrated, underperforming tenants that grow more and more eager to vacate the property every day.

One by one, your tenants depart. And you’re left with an empty shopping center no one wants to lease, because no one wants to shop there.

Liability Issues & ADA Non-Compliance

Cracked and broken parking lots and sidewalks are trip and fall lawsuits waiting to happen.

And ADA non-compliance is a huge legal can of worms that no landlord wants opened.

In short, deferring maintenance may improve cash flow in the short term. But it seriously hurts your property’s value in long term. The potential lawsuits can be financially devastating.

How CBM’s Professional Leasing & Property Management Services Can Enhance the Value of Your Shopping Center

Whether you’re facing long term vacancy, rising property expenses or mounting maintenance issues, CBM can help.

Our team of industry leading shopping center leasing and management pros will solve your problems.

And the end result? You’ll achieve your 2018 goal of improving your shopping center’s investment value!

Find Out More About CBM’s Leasing & Property Management Services

For more info on how CBM can help enhance your property’s investment value, visit our services page.


The ramp up to the legalized sale of marijuana is on in California, and local municipalities are under pressure to fashion workable rules and regulations.

In November of 2016, California voters passed Proposition 64, which legalized the recreational use of Marijuana. And the state is poised to begin issuing sales licenses as soon as January 2, 2018 – which is literally days away.

But regardless of state legislation and licensing, local municipalities still have a big say in the cultivation and distribution of recreational marijuana. Local ordinances will largely determine how pot manufacturing and sales are conducted

In this regard, all eyes are on the City of Los Angeles as California’s biggest and most powerful municipality is likely to set the tone for guidelines governing legal marijuana businesses throughout Southern California.

And Los Angeles city government has been hard at work on this task. In a unanimous, 12-0 vote, the LA City Council recently approved regulations for recreational marijuana manufacturing and sales within the borders of the City of Angels.

Here are 6 of the key highlights of this coming legislation…

1. Zoning Restrictions – Marijuana retailers are only allowed in specifically defined commercial and industrial zones.

2. Location Restrictions – Marijuana shops must be at least 700 feet from schools, public parks and libraries, child care facilities, alcohol and drug treatment centers, and the same distance from other pot retailers.

3. Additional Location Restrictions – Marijuana growers and manufacturers are strictly confined to industrial zones and banned within 600 feet of schools. Also, marijuana manufacturers that use volatile solvents are prohibited within 200 feet of residential neighborhoods.

4.  Marijuana-Related Business Caps – The City of Los Angeles will issue licenses for no more than 390 retail shops, 336 growers, and 520 marijuana manufacturers.

5.  Social Equity Program – In an effort to empower communities hardest hit by the so-called “war on drugs,” the city will give priority to applicants who live (or have lived) in areas heavily impacted by cannabis arrests. Or persons that were previously convicted of certain marijuana-related crimes.

6.  Converting From Medical to Recreational Marijuana – Licensed medical marijuana businesses currently operating in accordance with Proposition D (in other words, the operation was granted a business license by the city of LA prior to November 2007) will be first in line to receive new recreational sales licenses.

What Does This Mean For Shopping Center Landlords?

Here are 3 key points retail landlords should consider when entertaining a “pot tenant.”

1. Federal law still prohibits marijuana sales – Despite state level approval, marijuana remains a schedule 1 drug, according to federal statutes. As such, the DEA could, at any time, decided to raid your center, shut down your tenants’ businesses, and seize and sell your property (under federal drug-related property forfeiture laws). And though the current Presidential administration has given no indication they plan to crack down on “legalized marijuana sales,” this regime if anything, is unpredictable.

2. Tenant qualification is more critical than ever – The City is only issuing 390 retail shop licenses. And 140 officially licensed medical marijuana businesses currently in operation already have preference to receive recreational sales licenses. That means the number of legitimately licensed operators seeking to open new locations is likely to be small. So, it’s EXTREMELY important you confirm prospective tenants have the proper licensing documentation.

3. Confirming your property meets location criteria is a KEY consideration – Strident zoning restrictions confine pot businesses to specific areas and limit their proximity to schools, childcare facilities, and other sensitive public sites. Therefore, it’s imperative you’re aware of your property’s positioning amid your local landscape if you’re considering leasing to a pot tenant.

Need Help Vetting Pot Tenants?

One of the primary services professional leasing agents provide is tenant qualification.

With years of experience in dealing with tenants of all stripes, including ample expertise with pot tenants, a leasing agent can help you differentiate legitimate potential operates from pretenders hoping to cash on the current legalization gambit.

Additionally, a leasing agent can help you sort out city rules and regulations. Not to mention confirm whether or not your property meets zoning and location criteria for a pot shop.

For more info on CBM’s professional retail leasing services… visit cbm1.com/services.


In a prior post, we covered the heaven forbid topic of “What if Disaster Strikes Your Shopping Center.” In that post, we emphasized the need for emergency preparation and planning.

And as wildfires rage across Southern California, this question is even more pertinent than ever!

But there’s another side to the “disaster” story… Property Insurance.

If, God forbid, the recent fires burned down your shopping center, you have insurance to cover damages and loss. Or at least you assume you do anyway…

But have your REALLY read your insurance policy?

Have you pulled out your magnified glass (because that’s about what it takes these days) and scrutinized the “fine print?” And most importantly, do you have a clear picture of what’s covered if disaster should strike your property?

If you’re like many shopping center landlords, you don’t get around to investigating the details underlying your insurance policy until disaster strikes. And by then, it’s too little, too late.

To avoid stumbling into this potentially costly trap, here are several key considerations to keep in mind when purchasing your property insurance…

Don’t be Seduced by Price

Like most property expenses, the category which insurance falls into, you buy on price. And that totally makes sense. Your shopping center’s an investment. It’s supposes to earn income. Not vacuum cash out of your bank account.

But when it comes to an expense like property insurance, frugality only makes sense to a point.

If your agent quotes a price that’s “too good to be true,” investigate policy details and be sure the policy isn’t, in fact, too good to be true. Inadequate coverage may cost less upfront, but in the event of a casualty, it could cost you a fortune.

What Are You Really Buying?

When shopping for property insurance, pay attention to three key issues:
Coverage

What’s ACTUALLY covered in the event of disaster? What level of restoration does your policy guarantee?

And pay particular attention to Repair Vs. Replacement. How does the policy differentiate between the two? What’s the damage threshold in which Repair give way to Replacement?

Conditions

Your policy defines a set procedure for making a claim. In other word, the conditions you must adhere to in the event you make a claim. If you fail to meet these “conditions,” the insurer is within their rights to deny your claim.

As such, it’s imperative that you understand the conditions before you buy. And adhere to the letter of those conditions should you ever have to make a claim.

Endorsements

Federal and state laws define boilerplate insurance policy framework. But insurance carriers are free to add Endorsements, which are addendums that either extend or limit policy coverage.
Be sure you have a CLEAR understanding of your policy endorsements, and any potential coverage limitations they might encompass.

Additional Coverage

A commercial property is a unique animal. As such, you may want to consider some additional coverage.

Professional Fees

If considerable damage occurs to your property, an engineer may be required to assess the extent. Specifically, whether repair is a viable option or if full replacement is necessary.
An engineer employed by the insurance company obviously has a vested interest in erring on the conservative side. As such, it’s in your best interest to hire your own engineer and get a “second opinion.”

If your policy includes “professional fees,” the cost of hiring an independent engineer is covered.

Business Interruption Lawsuit

A disaster at a retail property doesn’t just impact the landlord… Tenants are essentially out of business until the property is back up and running. In situations with lengthy restoration periods, whether due to major construction or claim disputes, tenants have often sued landlords for “business interruption.” Such suits claim loss of income due to property inaccessibility, which landlords have a duty to make accessible.

Even if a suit is thrown out, attorney’s fees can be considerable. And if a tenant wins, costs can be astronomical.

Some policies offer additional coverage for business interruption lawsuits, and depending on your circumstances may be worthwhile.

Avoid Non-Admitted Carriers

If you give your agent a budget, and instruct him find a policy in that price range, he’ll comply.

REMEMBER: Your insurance agent’s in business to make money (just like you). Thus it’s in his best interest to fulfill your requests.

But sometimes in order to meet your budget, your agent may be inclined to take shortcuts. One all too common shortcut is using a “Non-Admitted Carries.” These are carries that are not admitted into the state where your property is located.

It’s legal to purchase insurance from a non-admitted carrier. And many offer attractive pricing. Such carries, however, are not subject to your state’s regulation (which is often why they’re able to discount their rates). In the event of a disputed claim, you have less recourse and may struggle to compel a non-admitted carrier to pay up.

Need More Help Managing Your Shopping Center?

Property managers don’t get directly involved with property insurance. But from paying bills to managing tenant relation to monitoring site maintenance, we do handle just about every other aspect of shopping center property management. And our services relieve much of the burden management saddles property owners with.

For more details on how CBM’s property management can benefit your shopping center, visit our Services page.


Maybe they’re just hanging out and panhandling at your center? Or perhaps they’ve taken up fulltime residence at your property? Either way, the homeless are an issue that many retail shopping centers struggle with.

At the very least, the homeless are nuisance that drive customers away and hurts your tenants’ business.

At the worst, the homeless, especially if they’re taken up residence at your property, represent a huge potential liability, not to mention potential public health hazard.

Now, of course these are human beings…

And you want to treat them as humanely as possible. We’ve shared creative strategies major regional property management firms have used to minimize the impact of the homeless on retail properties they manage.

But in some cases, situations arise in which you simply need to have an individual, or individuals, removed from your property.

Unfortunately, the removal process is far from straightforward. A great deal of legislation has been passed both nationally, and in California specifically, that “protects the rights of the homeless.”

So, the questions is… How do you make this happen?

The process varies to some degree based on the municipality. As such, you must always check with your local city officials. The basic process, however, is roughly the same.

Here’s How it Works:

1. Post a “No Trespassing” Sign

This indicates that while your property is “open to the public,” and loitering of any kind is not tolerated.

2. Ask a “Trespassing” Party to Leave

This demonstrates that you’ve attempted to enforce your stated “no trespassing” policy

3. Contact the Police and Report a Trespassing Violation

To make such a report, you must be the property owner, a tenant, or otherwise have vested interest in the property.
The police will visit the property and issue the offending party a formal, written “warning.”

In some municipalities, trespassing alone is not enough to prompt the police to issue a formal warning.
You must witness the person littering, defecating, urinating, using drugs, camping, storing property, loitering, stealing, or otherwise detracting from business, generating customer complaints, etc…

In other words, you must explain how person’s presence is disrupting your business.

4. Contact the Police if the Person Returns

If the person returns, the police now have grounds to arrest the person. And the police have ongoing grounds to arrest the person should they continue to return even after the initial arrest.

Need Help Dealing With the Homeless or Handling Other Aspects of Managing Your Shopping Center?

As already noted, the process described above clearly is not the most straightforward path to ousting a homeless person plaguing your center. Unfortunately, it’s your only legally legitimate option.

The good news is this is EXACTLY the kind of problem professional property management can help resolve!

Your property manager can…

== > Act as your agent (satisfying the “vested interest in the property” requirement necessary to file a police report).

== > Wait onsite and meet with the police to file the report (reports must be filed onsite) and point out the trespassing party so the police can issue the written warning.

== > Serve as the contact point person to notify the police when the trespassing party returns.

And this is just one of the MANY services professional property management provides!

For More Information on CBM’s Property Management Services…

Visit our Services page at cbm1.com/services.