THREE DECADES OF REAL ESTATE

We’ve been selling apartment buildings in Santa Monica for a very long time. Yes, it’s been 30 years! Where did the time go?

After 30 years, we’ve sold some of the same buildings two and three times. I’m sure you will not be surprised when I say that although the owners have changed, often the same tenants are still there (and we all know who they are) but I’m happy to say that those low rent controlled tenants I’m referring to are dwindling down through the years.

Time changes everything. Just look at Pico Boulevard! Over the decades, we’ve sold several properties on Pico and even owned a few. We sold a small commercial site that was the home of Precision Sandblasting which now houses a commercial Insurance Agency (wow, that was fun getting the permits!) Also the property that was originally home to a Pizza Hut and later the Mosel Wine Cellar (some of you may even remember the commercial real estate investment group through the Santa Monica Board of Realtors that used to hold our meetings there.) When we sold that property the escrow went on and on and on, thanks not only to the City but to a very complicated transaction. The good news was that due to such a long and difficult transaction, I developed a life long friendship with the Seller who at the time was the General Counsel to a little mortgage company name County Wide Financial! To this day I value that relationship above and beyond the transaction but I must say it’s still a really nice feeling when I drive by and see the new owner Senior Wise Services and can honestly say that by the end of that transaction, I could have been one of the people using those services!

Another Pico Boulevard Story is about a mixed used commercial and residential property. The commercial tenant was a massage parlor and I was not sure if it was in fact operating legally; now bear in mind those were the days when there were not disclosure requirements for commercial real estate. The prospective buyer, a young man by the name of Carl Lambert was inspecting the property and I disclosed to him that I was not sure if this was a legal use. He asked me why I was disclosing this to him since there was no disclosure requirement as I mentioned at that time, and I responded that I felt it was still necessary to point that out during his due diligence so he knew what he was buying. Carl later asked me to join his firm and told me it was based on the integrity of doing the right thing even though it was not a requirement. Now on personal note, as many of you know Carl and I are married even though we did not marry for many years after that meeting, nevertheless, Carl does enjoy telling people that we meet at a “massage parlor” and when they ask me to verify this, I do confirm the location however; I always like to clarify that I was not personally working at the massage parlor nor was I giving him a massage when we met! Just a little personal history for your reading enjoyment!

We recently listed two buildings at the same time. The first building owner wanted to run the show, and named the price and stuck to it even though we advised her that it was overpriced. This listing received offers that were at the price where we originally set the value to be. This property sat on the market and also had a vacancy, which we advised the seller to keep vacant or spend the money to renovate to achieve a higher rental rate. Well, the seller was “cheap and cheerful” and merely cleaned the unit and rented at a rate that was significantly less then would have been achieved had the unit been fixed up. Most of the prospective buyers continually commented that they would have preferred either a vacant unit or a renovated unit at a higher rental rate. So here we have a building overpriced to begin with and a vacancy that gets rented under market rate because there was no added value and guess what happened? This property never sold. Now, the other property which was owned by an out of state Real Estate Broker who relied on our guidance with the suggested listing price received multiple offers, sold quickly, in as condition at a price not only above asking but very close to the Seller’s expectation. We can title this “A Tale of Two Listings” with an ending that’s not hard to guess.

Sometimes a seller with an overpriced property is persuaded to re-list the property with another broker when the listing expires. Keep in mind two things, first if the property is overpriced, it’s just that overpriced and you’re probably not really a seller. The second thing is that if you really do want to sell and are going to reduce the price, do this with the existing broker who has already put the time and energy into working for you. Sellers will often contact us wanting to list their property after it did not sell with another broker because it was overpriced at which point we refer them back to their original broker because this is the honest and ethical thing to do unless there was something wrong other than the property just being overpriced.

I do hope that the personal touch makes this article a little more interesting– after all it’s part of our history. May we continue making history together.