WHERE DOES THE TIME GO? ANOTHER YEAR JUST ZIPPED by. The passage of time like history continually repeats itself. I begin writing yet another column feeling so grateful to have had another year and am reflecting back at my own history of selling apartment buildings in Santa Monica for the past 28 years.

I remember my very first ACTION meeting at Lincoln Jr. High. I looked around me and thought to myself “oh vey, is this what’s become of me?” I remember constantly asking over and over again “you mean an owner really is locked into the rental amount for the registered rent in 1979 and is unable to charge market rent even for a vacated unit?” When this was confirmed to me that this was correct, I simply thought I must have just misunderstood, this could not possibly be legal and if it is, what kind of a “schmegeg” would buy an apartment building in Santa Monica?

I was going over the previous articles that I have written for this column over the years and just like the seasons these topics and cycles continue to repeat themselves. Over the years I’ve tried to address issues that were pertinent to the times:

I’ve cautioned about being wary of letting the listing of your property being “bought by a Broker who tells you your property is worth more than it is just to secure the listing and I’d still make the same caution today. On numerous occasions we still lose business because the property owner was told that they could get more that what we estimated the value to be and ultimately when the property does sell it’s usually at what we had originally estimated, hence the conclusion is still the same, rely on an honest estimate of value, not just what you want to hear.

I’ve outlined how property values are determined based upon comparable sales of like kind properties within a close proximity to the subject property, taking all the variables into consideration; demographics, age, size of lot and structure, zoning and re-zoning, gross income, operating expenses, parking, amenities, the condition of the property, improvements, consideration of proposed developments, the political environment, supply and demand and of course location, location, location; once again not much has changed.

I’ve addressed the tax consequences of selling property. This is still a decision that should be taken into consideration prior to selling. Tax laws continually change and the specific basis of each property is unique to that property, how title is held and how it will affect what you share with your silent partner; the IRS. 1031 Exchanges, Charitable Remainder Trusts (CRTs) and Carrying Back Financing are still great vehicles that may reduce your tax consequences. And sometimes, it still just makes sense to simply sell and move on. This too is still consistent with my previous article written in November 1999 and that is to review your plans prior to selling as opposed to thinking about it after you sell.

The Reverse Exchange which is when you find your “upleg” (property you’re going to exchange into) before selling your “downleg” (existing property) was worth an entire column. This still remains to be a very creative and “sophisticated” option with very specific mechanics.

Market Conditions, Seller’s Market, Buyer’s Market, now here’s a big news flash: sell in a seller’s market and buy in a buyer’s market! Are we beginning to see a consistent pattern here?
The Projected Rents Theory where properties are marketed at a sales price based on the projected rents not the actual existing rents. How many of you have actually achieved those projected rents? Probably some rents still remain very low while other not only achieved but exceeded those projections. I would continue to still caution to evaluate the specifics of what you’re buying and where and be in a position to sustain the asset exactly like it is for a period of time that may possibly exceed your specific time frame.

I’m reflecting back on cherished relationships that we have been privileged to enjoy over the years. The outstanding service that we continually receive from related industry professionals, other brokers and trades as a result of just knowing and most importantly trusting each other for all these seasons that just continue to cycle upon us. Sadly, I reflect on the losses of lives that have touched ours over the years, it’s a very big part of our history and I remain honored to have had those trusted relationships and friendships. We are currently selling another property under sad circumstances, as a broker this still remains to be the worst way to sell a building and over the years, I’m sorry to say we’ve had many sales for this reason, part of life and part of the seasons. On this current property that we are selling, the owner was someone very special who we knew for a long time and who we had advised as we do many of you, “that a sale should occur in the season that’s appropriate for you.” This owner actually left instructions in his estate that our firm should sell this property upon his demise; it allows us the opportunity to be of service to a grieving family and to honor and carry out his wishes with dignity; however, I must continue to express that this is a sad circumstance to be selling under. I certainly value the relationship that we had with this very gentle man and am honored that he would even think of mentioning us in his plans.

So another season comes and goes. I want to close with mentioning something which I have never used this column or the ACTION platform for. First and most importantly, I want to thank all of you for the privilege of being able to serve you and the landlord community for the past 28 years and thank you for considering us when buying, selling and managing your properties.