In North Santa Monica, where I reside, we are the lucky ones. Destruction from the fires is just over the ridge. We can walk down the staircase on Adelaide, pass Canyon Elementary, climb back up Rustic Canyon, and be in the center of the burn area in a 15-minute hike. It’s smoky, many residents have left the streets to quiet. Face masks are common and the color of the sky is a tinge of orange. Threats of more wind are in the offing. Today, large convoys of police cars and fire trucks, 15 or 20 in a group, are traveling up the 405 with flashing lights to pre-position.

When we evacuated on the first night, we came to the New Gardena Hotel. It’s Japanese-owned and managed with high standards and a good breakfast. It’s in the center of the Gardena restaurant row with noodles, seafood, Japanese, Korean, and Vietnamese delicacies across the street at Pacific Square and Tozai Plaza. I saw a customer at the hotel who did the same as us, to be near his business. His house was destroyed.

Today is President’s Trump inauguration day in Washington D.C. It will bring a new era of governing. The administrative state will be top of the agenda. If you’ve dealt with local planning agencies and the mounds of restrictions from Green Zone Ordinances, buffer zones, AB 98, Environmental Justice, and other anti-industrial building measures, you can see how far astray local leaders have gone by neglecting basic municipal services. The other initiatives I’ll be watching will be AI, Crypto, and Super Intelligence. These are new agencies headed by talented and experienced executives with histories of founding tech companies. And limited Regulation!

AI is the transforming technology of a generation. Already, AI chat applications provide learning, automation, and useful outputs that merit continual dialog with your AI pal. At our office, we are preparing for the AI future by cleaning our data (parcel records, salesforce, available, and specialty niches) so it can be read by machines.  We geolocate each property and create a unique link to build and show relationships. We focus on local properties, especially those that are potential transactions. We follow certain industries and share techniques with colleagues in different markets.

Crypto is a step to the future. An increase in the value of coins and an embrace of crypto by key finance legislators will bring wider acceptance and knowledge. We experimented by building a blockchain on Hyperledger, but we didn’t have enough transactions to justify the instance cost. Now, we are using IPFS, a public decentralized blockchain where cost is low. In Los Angeles, because many properties trade off-market, in quiet transactions, or under new Buyer regulations, there is a blockchain use case to order and provide certainty. Blockchain is helpful when Sellers want to be discrete. You need not trade crypto coins or speculate to use blockchains. Please look for further explanation of how we use IPFS with customary brokerage procedures

In Los Angeles, industrial real estate has gone from frothy to flat. Rents are in decline, sale prices are down, and to the consternation of many sellers, investors have a “large margin of safety” when they make an offer. There is a wide variety of buildings available, especially for warehouse and distribution. One segment of shortage is modern, free-standing, and secure industrial buildings that can meet government clearance. Power and parking are needed for tech-industrial. Multi-tenant units, too, are in short supply.

We create analytics and compare buildings based on attributes and location. Clients can understand the real estate markets by scrolling over and seeing the metadata for each property.  We create graphs for tenants, owners, and investors. Originally coded for Streamlit, we migrated to a SQL database and then to Postgres so we could capture location data. We’ll be able to solve some nagging problems with this next revision. Organizing market data in this, or other ways, is a necessary step for adopting new standards.

Our staff has grown to eight people split between sales and administration. We have a 45-year history in South Bay industrial real estate and an office in Gardena for most of that time. We live on deals. Please contact us if we can help with your next industrial deal. In Los Angeles, or anywhere in the U.S.

Buyer-Broker Agreements Are Now A California Mandate – 2025

As of the start of 2025, all buyers being represented by a broker will need to agree in writing regarding their business and transactional relationship. In many cases, the broker’s compensation is now being shifted to the buyer. There will be a lot of explaining to do if a buyer wants experienced representation. California Civil Code §1670.50, effective January 1, 2025, mandates that real estate agents representing buyers enter into a written “buyer-broker representation agreement” with their clients. This agreement must be executed as soon as practicable, but no later than when the buyer submits an offer to purchase real property.

Key Provisions in a Buyer-Broker Agreement Include:

1. Broker’s Compensation
   • Clearly state how the broker will be compensated for their services.
   • Include the amount or method of calculation (e.g., a fixed fee, percentage of the purchase price, or other arrangements).
   • Specify whether the compensation is contingent on the completion of a transaction or is payable under other conditions.
2. Services to Be Provided
   • Detail the specific services the broker agrees to provide to the buyer, such as property searches, negotiations, or assistance with purchase contracts.
3. Payment Conditions
   • Clarify the conditions under which compensation becomes payable, including:
     • Whether payment depends on the successful closing of a transaction.
     • Responsibility for compensation if the seller offers to pay part or all of the buyer’s broker’s fees.
4. Contract Duration
   • For agreements with individual buyers, limit the duration of the agreement to no more than three months.
   • Prohibit automatic renewals of the agreement.
   • State that any extensions must be in writing and signed by all parties.
5. Termination Clause
   • Include conditions under which either party may terminate the agreement.
   • Address the buyer’s obligations regarding compensation if the agreement is terminated before a transaction is completed.
6. Legal Disclosure Requirement
   • Attach or reference the required buyer representation disclosure form as specified in Section 2079.14. This ensures the buyer understands their rights and obligations.
7. Signatures
   • Include the signatures of all parties (buyer and broker) to validate the agreement.
8. Governing Law and Dispute Resolution
   • Optionally include provisions regarding governing law (California law) and how disputes will be resolved (e.g., mediation, arbitration, or litigation).

Additional Notes on Compensation

• The agreement should address how compensation will be handled if the buyer purchases a property without the broker’s involvement.
• If a seller or another broker offers compensation, the agreement should clarify whether this reduces the buyer’s obligation to compensate their broker.

AIRCRE has developed two forms for both exclusive and non-exclusive agreements. Both are detailed and protect the broker. I will be curious to see how fund-level investors treat this mandate. First Tuesday has also developed a similar form that is simpler to use. I’m debating which of the two versions is more practical. In either case, we’ve been instructed by our legal counsel to prepare an addendum for every property that is submitted. California has added a layer of complexity to every deal. There is an opportunity in this legislation to modernize our brokerage process, but more about that another time.