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Pandemic Purchase of Commercial Property

Pandemic Purchase of Commercial Property

As a commercial real estate broker, I am often asked the question, “Is now a good time to buy commercial property?” It’s almost always in my financial interest to say “yes,” but the truthful answer is more complicated. The COVID-19 Pandemic has added another wrinkle of complexity to that simple question. Yes, there are buying opportunities but no, everything is not a bargain. Even though the economy is struggling right now, the real estate market is only struggling in specific segments. It’s not a traditional downturn where prices are down across the board.

Los Angeles Commercial Real Estate Market

In the Los Angeles market, a pandemic purchase of commercial property will yield the best value in retail or office properties, mostly located in lower income areas. Multi-family and industrial properties are still priced near record highs despite the rent increase and eviction moratoriums. The hospitality industry is hurting tremendously and I’m sure there are some deals out there, that segment is trying to ride out pandemic with hopes a brighter tomorrow. The perception of a temporary decline in the greater economy, as well as the commercial real estate market, has given many would-be sellers the fortitude to tough it out. With the arrival of the vaccine and a more optimistic outlook, many believe that they will survive the financial shock and by later this year everything will rebound. Whether that comes to fruition is yet to be realized so what does a willing buyer do now.

Case Study: Pandemic Purchase of Commercial Property

There are many buying opportunities for anyone interested in making a pandemic purchase of commercial property. Recently, I represented Robin and Steven Leanse of Tiferet Painting and Wallcovering. Robin and Steven were looking to purchase commercial property as owner/users for contractor business. They wanted to stay near their existing business in the Fairfax Beverly Grove neighborhood, but were willing to go a little further south (Mid City West Adams) where properties have a lower price point and the potential for COVID bargain existed. I was able to find them a property that recently fell out of escrow due to the COVID-19 Pandemic. The previous buyers were unable to perform due to new economic realities in 2020, so the sellers were willing to reduce the purchase price of property. It was not a fire sale, but it was a discount below the pre-COVID prices of 2019.pandemic purchase of commercial property

Both parties were satisfied with final terms of the transaction. The sellers were able to sell a retail property with some deferred maintenance in the midst of an economic freefall during the summer of 2020. The buyers were able to get a good deal on a property that they will probably own and operate for a long time. The property is located at 5102-5106 Washington Blvd, Los Angeles, CA 90016 in the Mid City West Adams neighborhood. As an added bonus, the neighboring parcel at 5110 Washington Blvd is being developed into a state-of-art mixed use complex which will increase the value of the surrounding area. Despite the dreary times we find ourselves in, the future looks bright for the transitional neighborhood of Mid City West Adams with great investment opportunities. Henry “Hank” Kellemen of Kellemen Real Estate represented the sellers and Jonathan “Jon” Varsano of Vars Real Estate represented the buyers.



Jon Varsano

View all posts by Jon Varsano

Jon Varsano has been a licensed real estate agent for 25 years. He is the founder and primary commercial real estate broker for Vars Real Estate. His expertise of the Culver City and surrounding West Los Angeles communities are in invaluable resource to new property investors or those looking to sell existing properties.

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