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Prop 15 May Imperil Lots Of Tenants

Yair Haimoff, Spectrum Commercial Real Estate

By Michael Aushenker Staff Reporter at The San Fernando Valley Business Journal

Voters to decide on split-roll tax system in November

Proposition 15, an initiative to tax commercial and industrial properties at a higher rate for education and local government funding, will have a negative domino effect on the market, commercial real estate experts told the Business Journal.

That’s because landlords will pass along hiked property taxes to tenants, who will charge customers more.

If approved by voters on Nov. 3, Prop 15 will create a split-roll tax, or separate tax rules for commercial and retail property versus residential property. The ballot measure intends to upend what voters approved in 1978 with Proposition 13, in which all assessed property values are based on the most recent purchase. Prop 13 caps property tax rates at 1 percent of the assessed value with annual increases not to exceed 2 percent.

John Loper, associate professor at USC Lusk Center for Real Estate, said passage of Prop 15 will add more financial burden to restaurant and retail tenants already responsible for triple-net (property taxes, insurance and operating costs) leases.

“If property taxes go up, the tenants pay, not the landlords,” Loper said.

With non-chain restaurants, small shops, cabinet makers, carpenters and plumbers —

“all of the small businesses are going to be paying those property taxes,” Loper continued.

Entrepreneurial business owners have already

“been hurt the most by COVID. They don’t have deep pockets.”

There are some exemptions, according to Loper, such as small companies that own their property.

“But most of the time, they’re renting at a shopping center or multi-tenant industrial park and (tax hikes are) not going to help,” he said.

Union groups have backed Prop 15, which promises $11 billion in revenue in a 60-40 split between municipal governments and local schools from K-12 to community colleges.

While that might sound ideal on paper, broker Yair Haimoff, founder of Spectrum Real Estate Services in Encino and Valencia, questions whether the funds will truly go where intended.

“Who is going to be in charge of appropriating the funds?” Haimoff asked.

“County assessors, they’re already behind. … Where are they going to get the manpower to do this?”

If landlords raise rents and tenants can’t pay or go out of business, landlords will stumble in paying their mortgage lenders, Haimoff said. Loper thinks Prop 15 could exert a large influence on the economy at large.

“This could be the thing that tips (business owners to say) ‘I can’t do this anymore,’” he said.

Eventually, customers will pay for the tax hike, the broker and academic agreed.

“The tenants are going to have to raise prices and the consumers are going to have to pay for it,” Haimoff said.

Added Loper:

“This is going to severely hurt a lot of small businesses. On top of COVID, this is scary.”

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Spectrum Commercial Real Estate, Inc. Represented the Seller and Buyer in the Off-Market Sale of Valencia Atrium a 65,178 +/- SF Class A Office Building

28494 Westinghouse Place, Valencia Atrium

28494 Westinghouse Place, ‘Valencia Atrium’

Spectrum Commercial Real Estate, Inc. Represented the Seller and Buyer in the Off-Market Sale of Valencia Atrium a 65,178 +/- SF Class A Office Building

Valencia, CA – September 22, 2020 – Yair Haimoff, SIOR, Andrew Ghassemi and Matt Sreden, commercial real estate brokers with Spectrum Commercial Real Estate, Inc., are pleased to have represented the Seller and Buyer in the off-market sale of Valencia Atrium, an institutional quality Class-A three story office building that is located in Valencia, California.

Valencia Atrium is an approximately 65,178 square foot three story Class-A office building that is situated on approximately 3.37 acre parcel. It is comprised of a diverse mix of 47 professional office suites ranging from 600+/- SF to 2,270 +/- SF. The property was built in 2002 and renovated in 2017. It features sweeping panoramic views of the Santa Clarita Valley and interior atrium views of lush landscaping and water features. Additionally, Valencia Atrium is one of the few Class-A buildings that are environmentally friendly and features charging stations.

Located at 28494 Westinghouse Place, ‘Valencia Atrium’ is situated within the highly desirable Valencia Gateway Corporate Point. It is across from Courtyard Marriot and Embassy Suites and is visible from both I-5 and SR-126. The property is positioned on the Southeast corner of Newhall Ranch Road and Vanderbilt Way, and approximately one-eighth mile east of I-5 and SR-126 (Newhall Ranch Road) interchange offering immediate access freeway access.

Spectrum Commercial Real Estate, Inc. represented both the Buyer, Rowe LLC and the Seller, Westinghouse Associates, LLC. The final purchase price was approximately $15 Million.

Call broker for more information.

About Spectrum Commercial Real Estate, Inc.

Spectrum Commercial Real Estate Inc., founded in 2018 and headquartered in Valencia, California, is a full service commercial real estate firm that offers clients personalized service, local knowledge, and a pioneering approach to brokerage services. The firm’s full spectrum of services includes tenant and landlord rep, leasing, sales (owner-user and investments), 1031 exchange buyer representation, national single-tenant investment sales and acquisitions, net lease investments, build-to-suit developments, debt/equity, and providing clients with exceptional brokerage services. For more information, visit www.Spectrumcre.com

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Spectrum Commercial Real Estate, Inc. Represented the Seller in the Sale of 6,077 SF High-Image Office Condo in the Prestigious Rye Canyon Pointe

28212 Kelly Johnson Building in Valencia CA

28212 Kelly Johnson Parkway in Valencia, California

Spectrum Commercial Real Estate, Inc. Represented the Seller in the Sale of 6,077 SF High-Image Office Condo in the Prestigious Rye Canyon Pointe

Valencia, CA – September 18, 2020 – Yair Haimoff, SIOR, Andrew Ghassemi and Matt Sreden, commercial real estate brokers with Spectrum Commercial Real Estate, Inc., are pleased to have represented the Seller in the sale of this +/- 6,077 SF high-image office condo in Valencia, California.

This high-image office condo, built in 2007, is located at 28212 Kelly Johnson Parkway in the prestigious Rye Canyon Pointe. It features excellent layout, high-ceilings, elegant double door entry, wrap around window lines with sweeping views of the Santa Clarita Valley, dual elevator access, two story atrium entry and open surface and covered parking.

The property is located within minutes from the Valencia Town Center, Henry Mayo Newhall Hospital, hotels, championship golf course, single and multi-family housing, Six Flags Magic Mountain, and many other amenities.

Call broker for more information.

About Spectrum Commercial Real Estate, Inc.

Spectrum Commercial Real Estate Inc., founded in 2018 and headquartered in Valencia, California, is a full service commercial real estate firm that offers clients personalized service, local knowledge, and a pioneering approach to brokerage services. The firm’s full spectrum of services includes tenant and landlord rep, leasing, sales (owner-user and investments), 1031 exchange buyer representation, national single-tenant investment sales and acquisitions, net lease investments, build-to-suit developments,