Technology Advancements Influence Commercial Real Estate Demand

Parkway Center Two

14145 Danielson Street

Poway

117,354 square feet, Industrial

The fully-leased 14145 Danielson Street industrial building sold in May to new corporate-user Sorrento West Properties Inc., a real estate holdings entity of San Diego-based General Atomics, for $20 million according to CoStar. Meissner Jacquét’s valued commercial real estate industry associations and […]

June 12th, 2017|Case Study|0 Comments

Commercial Real Estate Industry Up in Arms over Dual Agency Ban

Assembly Bill 1059, introduced in February by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, was proposed to ban dual agency commercial property transactions in the state of California. The bill’s supporters claim that dual agency creates a conflict of interest and the only solution is a legislative ban in the commercial setting. The sponsor of AB 1059 is using the recent California Supreme Court decision in the Horiike v. Coldwell Banker Residential Brokerage case, which dealt with residential disclosure issues, as a cover to pursue an agenda that would codify its business model, limit competitors, upend commercial real estate transactions, and ultimately harm consumers.

Despite proponents’ claims, AB 1059 will hurt small and large tenants alike by driving down competition, raising costs and making transactions more difficult.  Under this bill, real estate transactions will be more complicated, costly, and adversarial than they currently are by banning the ability for one firm – mutually agreeable to both parties – from coordinating purchase and/or lease transactions.  Senate Bill 1171 is already in place to mandate disclosure of dual representation in commercial property transactions to limit conflicts of interest and increase transparency.

On April 25th the author, Gonzalez-Fletcher, informed BOMA CAL that they will be pulling the bill from consideration this year. It appears the author was caught off guard by the level of opposition to the bill and has decided to focus on other measures at this time.

The commercial real estate community appreciates that the author of the bill heard their concerns and chose to reevaluate, but it is very likely that this measure or an amended version of it will be revisited next year. It is prudent to assume that the sponsors of AB 1059 will continue to press this issue and therefore the commercial real estate industry should continue to work to communicate the benefits of dual agency with policymakers, commercial real estate professionals, property owners, and the public at large, and why banning the practice would harm the entire commercial real estate industry.

Major Points

  • Anti-consumer and anti-choice. Today’s marketplace empowers buyers, sellers, tenants, and landlords to choose a full-service commercial real estate firm that best meets their business needs. If the bill is approved, tenants/buyers will be forced to either work with a tenant rep broker from a firm other than the listing firm or represent themselves, which will result in higher transactions fees and could stifle small businesses’ ability to close transactions.
  • Conflict of interest argument is false. In dual agency commercial real estate transactions the role of the broker is to provide information that creates an understanding of the market on both sides of a transaction in order for both parties involved to make informed business decisions. Many parties involved in commercial real estate transactions purposely choose to work with dual agency brokers, and mandating against this practice is imbalanced.
  • Not a means of protection.  There are currently stringent disclosure requirements in place that ensure all parties to a transaction are fully informed, including an obligation to provide written notice of the commercial real estate agency’s relationships and whether they are acting as a buyer/tenant agent exclusively, a seller/landlord agent exclusively, or as a dual agent representing both sides of a transaction.
  • Adversely affect CRE industry and economy. Approximately 90% of commercial leasing in California’s largest markets is conducted through full service firms generating billions of dollars annually and creating jobs and tax revenues that benefit local communities throughout the state. Mandating single agency would dismantle the commercial real estate sector, affecting companies large and small, and would position California as an even more difficult state in which to do business.


Sources:

AB 1626 (Irwin D) Real estate brokers: dual agency 

AB 1059 (Gonzalez Fletcher D) Dual agency: commercial real estate transactions 

CoStar, California to Consider New Legislation On Dual Agency […]

May 3rd, 2017|Case Study|0 Comments

San Elijo Hills Town Center

1501-1523 San Elijo Road

San Marcos

10,997 square feet, Retail

Meissner Jacquét has managed San Elijo Hills Town Center since 2009 for previous owner HomeFed Corporation. Upon the center’s sale to Ambient Communities, Inc., a real estate development company with headquarters located in San Diego, Meissner Jacquét was maintained as the commercial […]

April 18th, 2017|Case Study|0 Comments

Lemon Grove Plaza

7012-7144 Broadway Avenue

Lemon Grove/Spring Valley

151,788 square feet, Retail

Bought by Starboard Realty Advisors, LLC, a privately-held operator and sponsor of primarily retail shopping center investments headquartered in Irvine, ownership required a new management team to be on-boarded in less than three days due to escrow requirements. Meissner Jacquét’s previously positive […]

April 18th, 2017|Case Study|0 Comments

5717 PACIFIC CENTER

5717 Pacific Center Blvd.

Sorrento Mesa

67,832 square feet, Office

Recently purchased by Montana Avenue Capital Partners, LLC, based in Santa Monica, due to its potential for attractive risk-adjusted return on equity, this once single-tenant, corporate-headquartered, Qualcomm-occupied Class B office building will undergo a complete transformation. Built in 2001 and renovated in 2005, Meissner Jacquét Commercial Real Estate […]

March 15th, 2017|Case Study|0 Comments

MISSION CREEK

9420 – 9440 Cuyamaca Street

Santee

63,987 square feet, Retail

Meissner Jacquét assumed management of the 63,987 square foot neighborhood center owned by CNA Enterprises, Inc., a real estate investment and advisory firm headquartered in Los Angeles. This large institutional owner maintains the multi-tenant retail storefront located in the Santee submarket as their only retail project in San […]

March 15th, 2017|Case Study|0 Comments

METROWORK

1350 Columbia Street

Downtown

68,516 square feet, Office Condo

In April, Meissner Jacquét Commercial Real Estate Services takes over management of MetroWork Condominium Association, AKA 1337 India Street, to provide commercial association management to the 35-tenant, 68,516 square foot, Class B, office loft/creative space condominium building built in 2007. This 9-story high-rise is 96% leased and located in […]

March 15th, 2017|Case Study|0 Comments

Aero

9797 Aero Drive

Kearny Mesa

92,463 square feet, Office

This previously outdated, single-tenant office space underwent a renovation that redesigned the building into a multi-tenant, creative office use. Ownership, AVID Center, sought Meissner Jacquét Commercial Real Estate Services to provide the commercial property management due to their local expertise with owner-occupied assets. Meissner Jacquét functions as the intermediary […]

February 1st, 2017|Case Study|0 Comments

Trepte Industrial Park

7606 – 7776 Trade Street

Mira Mesa/Miramar

233,731 square feet, Industrial

Trepte Industrial Park, LTD, ownership of this historically well-leased, multi-tenant, 4-star, industrial warehouse, decided to outsource the commercial property management to Meissner Jacquét Commercial Real Estate Services due to ownership’s out-of-state location and Meissner Jacquét’s ability to provide a local, advisory role to ownership regarding the asset. […]

February 1st, 2017|Case Study|0 Comments

A Year in Review: Meissner Jacquét Brings in Half a Million Square Feet

Even though commercial real estate trends in 2016 were disappointing according to chief economists – with the overall expansion since the recession being only two-thirds as robust as in previous recoveries – Meissner Jacquét’s business boomed with close to 500,000 total square feet in new property management accounts and ancillary corporate real estate services, including accounting-only […]

December 17th, 2016|Case Study|0 Comments