Commercial Crash in 2024? Discussion with an Expert

In the dynamic landscape of Long Beach’s commercial real estate, the narrative of an impending market collapse has been widely speculated. Is the commercial sector, with its office and retail spaces, really on the brink of a downturn? Juan Huizar, the president of Sage Real Estate, alongside Sheva Hosseinzadeh, a distinguished partner at Coldwell Banker Commercial Blair, delves into this complex market to uncover the truths and opportunities lying beneath the surface speculation.

Pioneering Commercial Real Estate in Long Beach

Sheva’s journey in the commercial real estate sphere is nothing short of inspiring. From growing up listening to her father’s real estate stories to becoming a beacon for women in a predominantly male industry, Sheva’s path reflects her resilience and pioneering spirit. Her partnership at Coldwell Banker Commercial Blair not only marks a significant achievement in her career but also emphasizes the importance of female representation in leadership roles within the commercial real estate sector.

Transforming Challenges into Opportunities

In the ever-evolving landscape of Long Beach’s commercial real estate, the office sector stands at a pivotal crossroads. The aftermath of the global pandemic has undeniably accelerated changes in how office spaces are perceived, utilized, and valued. Yet, with change comes opportunity. As businesses navigate the transition towards more flexible work arrangements, savvy investors and tenants are finding fertile ground for innovation and growth in Long Beach’s office real estate.

The narrative that office spaces are becoming obsolete is both simplistic and misleading. While it’s true that vacancy rates have seen an uptick, this does not signal the death of office spaces. Instead, we’re witnessing a transformation in their function and appeal. Businesses are increasingly adopting hybrid models, blending remote and in-office work to cater to evolving employee preferences and operational needs. This shift has prompted a reevaluation of space requirements, with a growing trend towards downsizing and optimizing office layouts to foster collaboration, flexibility, and well-being.

This period of transition presents a strategic opportunity for investors. Properties that may have been overlooked in the past are now being viewed through a new lens. Office buildings with the potential for modernization or repurposing to meet the demands of a post-pandemic workforce are particularly appealing. Investors with an eye for such opportunities can capitalize on lower acquisition costs and the potential for significant value appreciation as they retrofit and reposition these assets in the market.

For tenants, the current market dynamics offer a unique advantage. With an increase in vacancies, landlords are more motivated than ever to fill spaces, leading to more favorable lease terms. Tenants find themselves in a strong negotiating position, able to secure reductions in rent, more flexible lease terms, and concessions on tenant improvements. This environment makes it an opportune time for businesses to secure spaces that may have been beyond their reach in a tighter market, allowing for upgrades in location, amenities, and design that align with the modern workforce’s expectations

Retail Spaces: A Testament to Resilience

The retail sector in Long Beach tells a story of resilience. Despite challenges, leasing activity remains robust, highlighting an enduring demand for brick-and-mortar locations. However, the restaurant industry within retail faces its own set of hurdles, from rising operational costs to staffing challenges, tempering its expansion. Yet, in adversity lies opportunity; strategic locations and keen market insights can unveil lucrative prospects for investors and tenants alike.

Mixed-Use Properties

Mixed-use developments, blending residential, commercial, and sometimes recreational spaces, stand as pillars of urban regeneration and community vitality in Long Beach. However, the intricate balance of diverse uses within a single project poses unique financing challenges. Traditional lending routes often view the multifaceted nature of these projects as a higher risk, leading to stricter lending criteria and higher down payment demands. This financial landscape necessitates a creative approach to funding, pushing investors to explore beyond conventional bank loans.

One innovative solution to these financing obstacles is seller financing. This method, where the property’s seller extends credit to the buyer, can offer more flexible terms, potentially lower down payments, and interest rates more favorable than those of traditional loans. Seller financing not only eases the entry barrier for buyers but also widens the pool of potential investors for sellers, facilitating smoother transactions and quicker turnovers.

By leveraging financing strategies like seller financing, capitalizing on government incentives, and possibly forming strategic partnerships, investors can unlock the potential of mixed-use properties. These developments not only enrich the urban fabric of Long Beach but also offer a resilient and diverse investment portfolio that can withstand the ebbs and flows of individual market sectors.

The Future of Commercial Real Estate in Long Beach

As we navigate through the evolving landscape of Long Beach’s commercial real estate, the horizon holds promise for those ready to embrace change and uncover the opportunities it brings. The market’s dynamics, influenced by shifting work patterns and consumer behaviors, challenge stakeholders to innovate and adapt. The transformation within the office space sector, alongside the resilience of retail environments, illustrates a broader trend towards flexibility and diversity in property use and investment strategies. As the city continues to grow, the demand for mixed-use developments that cater to a more integrated urban lifestyle is expected to rise, reshaping Long Beach’s skyline and community spaces.

Sheva Hosseinzadeh’s Contact Information

Sheva Hosseinzadeh is a Principal at Coldwell Banker Commercial BLAIR, known for her expertise in retail and office leasing/sales across Long Beach and nearby regions.

Sheva Hosseinzadeh, Principal, Coldwell Banker Commercial BLAIR
EMAIL [email protected]
OFFICE (562) 548-7410
DRE 01922147

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