Historic Eastern Star Hall in Midtown Sacramento scheduled for Auction.com sale

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Historic Eastern Star Hall (2719 K Street – Midtown Sacramento) – Auction Sale July 15, 2015

It was a sad day in May (2013) when the Eastern Star Hall Association officially closed its doors at 2719 K Street (Midtown Sacramento) for the very last time. Following a series of organizational challenges, the building was put up for sale and later acquired by a local Mason, who had visions of leasing the +/- 31,500 square foot iconic structure for commercial purposes. Even with the new landlord’s depth of commercial real estate knowledge and experience, it proved difficult to attract a tenant who would lease the entire building.  

Click here for related story by the Sacramento Business Journal.

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South Sacramento apartments trade hands with 1031 exchange buyer from San Jose

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6420 46th Street Apartments (South Sacramento) – 14 units sold in 3 weeks

Almost three years ago an Australian investor acquired 6420 46th Street (14 unit apartments) in South Sacramento “site unseen” for $875,000 ($62,500 per unit / $70 per square foot). The property, built in 1990, was in good condition at the time of sale, but had been managed by a local owner for the previous nine years. Due to the hands on approach, average length of tenant occupancy was around four years at the time of sale (Nov 2011) and the landlord had been able to collect rents fairly well.  The new, absentee owner, tried to manage the property from afar with local family assistance and quickly ran into trouble during the first six months. It was readily apparent that a professional management company needed to be called in to right the ship.    

Click here for related article by the Sacramento Business Journal.

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4th Annual Legislative Summit hosted by California Asian Chamber of Commerce at State Capitol

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Living in Sacramento, its easy to take for granted that we actually reside in the State Capitol of California, which represents the 9th largest economy in the entire world.  At times, a healthy reminder is in order to draw attention to this remarkable privilege that we all share.  Important matters are considered and decided every day inside the venerable halls of the State Capitol.  We are certainly fortunate to now have our very own local correspondent, Christopher Arns (Sacramento Business Journal), who has already written over 40 stories covering legislative activities surrounding the State Capitol since January.  

It is incumbent upon citizens to communicate with legislators to ensure their voices are heard.  It is within this context I participated last week in the 4th Annual Legislative Summit at the State Capitol, hosted by the California Asian Chamber of Commerce.  Pat Fong Kushida (President & CEO of the CalAsian Chamber) led four teams who met with over 40 legislative offices to discuss pro-business issues including workforce development, taxation, economic development, and regulatory reform.  It was a terrific day with open dialogue and a distinct willingness to come together.

California State Senator Jim Nielsen (third from left) with CalAsian Chamber lobby team

One such meeting took place with Senator Jim Nielsen (see picture above), where team representatives connected on a personal level, sharing concerns and ideas for improvement in various areas.  This scene repeated itself many times throughout the day as we walked the halls, transitioning from one meeting to the next.  In a fitting culmination of events, the CalAsian Chamber lobby teams capped off the evening with a tasteful reception with dozens of legislators and staffers, along with community and business leaders.

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New ADA Reforms Help Curb Shakedown Lawsuits (Effective January 1, 2013)

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The California Legislature recently approved Senate Bill 1186, which is designed to curb the misuse and abuse of California’s ADA (Americans With Disabilities Act) laws and protect business owners. The catalyst driving the Legislature’s action was what the Bill’s authors described as a serious problem in which claimants and attorneys file “shakedown lawsuits against businesses in an effort to gain an easy payday with no intention of improving access for the disabled community.” Landlords and property owners were often faced with exploitive demand letters for money and would choose to pay the claimant simply to avoid the time and expense of dealing with litigation. 

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Opportunity Knocks for the Sale of Apartments in Sacramento

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People who live and work in California’s State Capitol of Sacramento are still reeling from the de-leveraging effects of the housing collapse.  Many workers lost good paying jobs and could no longer maintain their mortgage payments, ultimately losing homes to foreclosure.  Others, who were able to keep their jobs, experienced such a dramatic reduction in home values that equity lines of credit were cut off and refinancing to take advantage of historic low rates became impossible.

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Bay Area Investors Snap Up Small Sacramento Complex – Sacramento Business Journal

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An article by Sacramento Business Journal’s staff writer, Sanford Nax, suggests Bay Area investors continue to buy Sacramento commercial real estate for higher yields.  The recent closing of a 13 unit apartment complex in South Sacramento by Brian Jacks, Regional Vice President of East West Commercial Real Estate, is discussed.  Click here to see article.

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Sacramento Commercial Real Estate Properties For Sale Continue to Lure Apartment Investors from the Bay Area

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Less than two months ago, I received a call from a San Jose based apartment investor who had become disenfranchised with the continued rise in commercial real estate prices throughout the Bay Area. A simple comparison of apartments for sale in both Sacramento and San Jose (within specific parameters) resulted in an average difference in cap rate (annual yield) of 3%. The San Jose apartments we considered offered an average cap rate of 5.7%, while the Sacramento apartments offered 8.7%. It doesn’t take a genius to realize that a higher yield on a commercial real estate investment means more cash in the investor pocket. Naturally, the investor decided it made more sense to invest in commercial real estate (apartments) here in Sacramento, which is once again becoming quite a predictable phenomenon, as discussed in this 1st Quarter 2012 Multifamily Investor Newsletter.

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