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Creative Solutions for Complex Legal Issues

Long Beach Business & Commercial Law Blog

How to create a favorable commercial lease

Commercial lease disputes can be harmful for California business owners. They can also be bad for those who own the land or property that is being rented. Fortunately, there are ways to reduce the chances of such disputes taking place. For example, it is imperative to have all the details of a deal in writing. This is true even if it seems trivial when the deal is first reached.

If there are conditional terms that are placed in a lease, those terms should be as clear and objective as possible. Furthermore, it is a good idea to make sure that there are contingency plans built into the contract. This is because there are some instances in which something can occur that's beyond any party's control. Accounting for such instances ahead of time could make potential issues easier to resolve.

Strategies to prepare a commercial property refinancing

Commercial properties in California have great potential to produce income, but owners must make an ongoing effort to maintain their curb appeal, occupancy and net operating income. Mortgages on commercial real estate mature every five to 10 years, and property investors need to be ready to withstand the scrutiny of lenders when the time to refinance arrives. Refinancing a commercial building could also present an opportunity for the investor to increase cash flow or cash out equity to pay for new investments.

Commercial real estate lenders look primarily at net operating income when they make lending decisions. Landlords who let space remain vacant, ignore maintenance or fail to collect rent will face an uphill battle when trying to secure a new loan. Lenders could view a building with vacant space or persistently unpaid rent as distressed properties. If a loan does come along, the terms and interest rate will be undesirable.

Commercial real estate continues to attract foreign investment

According to the Bureau of Economic Analysis at the Department of Commerce, more than $450 billion was invested into the American economy by foreign investors during 2016. A significant portion of this investment has been in commercial real estate in major California markets, and some experts predict that the trend will likely continue. Foreign investors have placed high value on commercial real estate in 2016 and beyond due to steady job creation and business expansion.

While much of the focus from foreign investors has been in major markets like Los Angeles, New York and Chicago, opportunities exist in smaller cities and suburban areas throughout the country. These markets have high-value office parks, commercial shopping complexes and modest-sized commercial buildings for relatively low prices. For some foreign organizations, investing in commercial real estate debt is seen as a less risky proposition than direct property purchases.

Craft brewery back on market after contract dispute

When an agreed-upon contract goes wrong or is otherwise breached, it can have a significant, cascading effect on the parties involved. In the case of California craft beer manufacturer Monkey Paw Brewing, it could be back on the market due to a pending breach of contract lawsuit filed by the company's own founder. A majority ownership stake in Monkey Paw was purchased by Coronado Brewing in 2017; the larger brewery was looking to develop the production levels and distribution of the smaller company. However, less than a year later, Coronado has moved the craft business back on the open market.

The breach of contract lawsuit was filed by the founder of Monkey Paw in April 2018; the plaintiff remains a minority owner of the business but left his titled role as an adviser in January. In his lawsuit, the man alleges that he is owed over $33,000 by the company. He says that he was given a promissory note in September of 2017 in which the company pledged to pay him $1,005.04 each month going forward, yet he claims that none of those payments have been made.

Industrial properties can be excellent real estate choices

Many people in Los Angeles are interested in getting involved in the commercial real estate market. During the recession and financial crisis that took place around 2008, the value of industrial real estate declined. However, with the economy's recovery, the recovery of this sector has escalated as well. In fact, many experts argue that it could be the most desirable type of commercial property in which to invest.

In the first quarter of 2018, 10 years after the recession, there were $16 billion in industrial real estate sales. This sum reflects the second-highest quarterly amount of sales in the history of the sector. It also reflects a 20 percent increase over the value of these commercial real estate sales from only one year before. The value of these investments is also reflected in their high desirability and low vacancy rate, currently sitting at 5.1 percent across the country.

Adidas sued by Skechers for unfair competition, false advertising

California sports fans might be interested in learning about a recent lawsuit that was filed by Skechers against Adidas for unfair competition and false advertising. The lawsuit was filed on May 10 in the U.S. District Court in Los Angeles.

According to the complaint, Adidas engaged in a scheme through which it secretly funneled hundreds of thousands of dollars to high school basketball players and their families so that the athletes would wear its products. The players were also allegedly induced to sign with colleges that were sponsored by Adidas and sign endorsements for the company after they were drafted by the National Basketball Association.

How to break or amend a commercial lease

Business owners in California and throughout the country may encounter a situation that requires them to break their commercial lease. For some, it is because their companies have outgrown their current locations. To make it easier to get out of a lease, an out clause should be negotiated into the document before it is signed. It can also be a good idea to negotiate a shorter lease period to account for fast growth.

If an out clause or similar language isn't included in a lease, it doesn't mean that the agreement can't be terminated early. Instead, it means that a business owner will need to ask his or her landlord for permission to leave. To increase the odds of a landlord agreeing to end a lease early, it may be wise to help find a new tenant or use cash to buy out the rest of the lease's term.

MMA fighter sued for breach of contract

California residents who are fans of MMA may know who flyweight Ray Borg is from his time in the ring. They may also have heard that he is being sued by Wild Bunch Management for breach of contract and fraud. WBM claims that they helped him negotiate a deal to fight five matches for the UFC. However, the management firm claims that the fighter left the organization after just one fight.

The suit claims that Borg was to pay WBM 20 percent of any earnings of $9,999 or less in addition to 10 percent of any bonus earnings over $10,000. Furthermore, the suit claims that Borg violated a no-compete clause in the contract by switching to a nearby gym. However, Borg's attorney claims that WBM is simply upset that the fighter chose to further his career and also decided to do so elsewhere.

Construction disputes and resolutions

A California construction contractor that has a dispute with a client may not know what steps they should take to limit the damage to their reputation and relationship with the client. Legal claims, which can be costly for both the contractor and client, could place a construction project in jeopardy. To avoid such situations from occurring, there are certain actions that contractors can take to resolve the disputes.

First, it is important to understand why or how construction disputes occur. Disagreements regarding a contract can be based on real or perceived violations of the contract terms. Disputes are also caused by poor comprehension of the contract conditions, the failure to administer the agreement, contract delays and unproven claims regarding the involved parties.

Experience-based design adds value to commercial real estate

Commercial property developers in California can gain a competitive edge by expanding their design criteria. Tenants from high-value brands and investors could emerge when designers create an experience for tenants and patrons. This concept draws upon the highly detailed experiences crafted by theme park builders who strive to engage the senses of visitors. Buildings that stand out from traditional structures have the potential to become destinations.

Even properties meant for office space or retail can benefit from a design that goes beyond the primary purpose of the development. A nautical theme at a property near the coastline could increase its appeal to investors and renters. A building with an industrial aesthetic might excite startup companies seeking space that has a modern and technological feel. Details like birdsong piped through a building-wide audio system could bring the sounds of the outdoors inside. Essentially, designers who promote an emotive experience offer greater value to the people who will occupy the buildings.

Creative Solutions for Complex Legal Issues

Contact Henry B. LaTorraca

400 Oceangate
Suite 700
Long Beach, CA 90802-4306

Phone: 562-216-2942
Fax: 562-216-2943
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