Los Angeles is one of those cities in California where many entrepreneurs flock to become members of the U.S. business community. This is explained by the fact that California is the center of high technology, which any businessman wants to be close to. However, due to this fact, the prices for commercial real estate in the region, including Los Angeles, will be high.
The City of Angels is one of the main centers of entrepreneurship in the state of California, so the demand for commercial real estate in this metropolis is constantly growing. In our material, we will look at all the features of office rentals in Los Angeles.
Average rent cost in Los Angeles
In Los Angeles, as in the rest of metropolitan areas of the region, the commercial rental market remains very active. This can be explained by the state’s interest in solving the problems of ecology, urbanization and globalization. In addition, the stable reputation of the state of California as a global center of high technology contributes to the growth of the commercial real estate market.
The Greater Los Angeles area has a low level of vacant space that could be used for commercial activity. In some smaller markets, such as Burbank, Glendale and Orange County, the situation is even worse. This is due to the fact that most of the office space has been occupied by entertainment, financial, legal and technology businesses.
The average price per square foot, Los Angeles rose to $2.73 per foot. In West Los Angeles and the San Gabriel Valley, commercial rent prices are estimated at $3.81 and $2.27, respectively. In North Los Angeles, the rent price ranges from $2.28 to $3.06.
In addition, the Los Angeles office real estate market demonstrates an increase in demand from members of the cultural sector. Creative people prefer to rent an office in Los Angeles, located in the Santa Monica, Venice Beach and Marina del Rey areas. Analysts expect this upward trend to continue in the near future.
Commercial rent law in Los Angeles
Commercial tenants in Los Angeles are more vulnerable under commercial lease laws compared to residential tenants. This can be explained by the fact that office tenants can bargain for every foot of space for quite a long time.
According to California law and Los Angeles County ordinances, office space tenants must resolve problems directly with their lessor on their own. In addition, there are several additional provisions:
- Right to sublease. Tenants may not lease out the commercial premises they rent without the consent of the real estate owner for the duration of the relevant agreement. However, there is an interesting point in the legislation that the lessor must give a written answer, in which he must justify the reasons for the refusal. If he has not done so, he has automatically agreed to sublease.
- Prohibition on demanding money against a security deposit. Neither the lessor nor his representatives have the right to demand bail money as a condition of renting commercial premises. If this happens, the entrepreneur can claim compensation from the lessor in three times the amount of the material damage caused.
- Lack of control over rent increases. When hiring a commercial property, you should be prepared that the owner has the right to raise rents. And the law does not regulate this right. However, the law says that you can enter into a limited rental agreement with the state structures.
- The ease of evicting tenants. Clients may receive a notification that the owner of the premises is terminating the agreement due to non-payment of rent or other violations of the signed contract clauses. Then, the tenant has three days to resolve the problems. However, it is the delay or non-payment of rent that is the cause.
Commercial tenants right in Los Angeles are not as protected as residential tenants rights. This is a trend that is now occurring throughout California.
How often and how much a landlord can raise the rent
The main points to be familiar with about rent controlled areas in Los Angeles:
- rent payments for commercial real estate in the metropolitan area are subject to a reduced rent cap, unlike in other parts of California;
- landlords have the right to increase the rent only once a year;
- when raising the rent, the landlord may use a security deposit for the same amount;
- for any lessor who intends to move out, the rent may be raised by 10%;
- it is allowed to raise the rent by 1% annually for utilities;
- the tenant must be notified of the rent increase 30 days in advance.
In summary, we note that the max rent increase can only be when the tenant moves out, i.e., by 10%. In other cases, the tenant can raise the rent by 8% or by 1% for utilities annually. These are the rent limits that are allowed in the Los Angeles area.
The following options are suitable for renting commercial property in CA:
- office space;
- industrial buildings;
- retail space.
Each entrepreneur can rent these properties to establish his business.