LA Commercial Real Estate / Buying Guide
Los Angeles · Acquisition Guide · Q2 2026
Buying commercial property in Los Angeles.
Two things reset the moment you close in LA, and most buyers model neither. Your property tax is reassessed to your purchase price — not the seller’s assessment — and a City of Los Angeles sale above $5.4M carries a transfer tax of 4–5.5% on the gross price that no 1031 exchange will defer. Both belong in the underwriting, not the closing statement.
Talk through an acquisitionCommercial acquisition in Los Angeles is a different exercise from most markets, and not because prices are high. It is different because two local mechanics — Proposition 13 reassessment on transfer, and Measure ULA on sale — sit outside the standard underwriting template and can each move a deal’s returns by more than a full point of cap rate.
This guide covers the whole acquisition: how to decide whether to buy at all, what LA product is actually clearing at, how to underwrite it, how it gets financed in the current rate environment, the two tax mechanics above, a due diligence framework built for this market, and what happens in escrow. The calculators are the part worth bookmarking.
Buy, lease, or invest
Three different questions
“Should I buy commercial property” is really three separate questions depending on who is asking, and they have different answers.
Which Position Are You In?
Owner-user
You occupy the building
- Fixes occupancy cost long-term
- Builds equity instead of rent
- SBA financing at 10% down
- Control over the asset
- Capital tied up in real estate
- You are now a landlord too
- Illiquid if the business changes
The testIs your space requirement stable for ten-plus years, and does the down payment beat the return on deploying that capital inside the business? If not, lease.
Investor
Someone else occupies it
- Income plus appreciation
- Leverage amplifies returns
- Depreciation shelters income
- 1031 defers federal/state gain
- Tenant credit is your income
- Cap rate expansion cuts value
- Management is a real job
The testCan you underwrite the rent roll to market, not to the offering memorandum? Most LA underwriting errors are rent-roll errors, not cap rate errors.
Tenant
You keep leasing
- Capital stays in the business
- Flexibility on size and location
- No capital repair exposure
- Concessions are strong right now
- No equity build
- Rate exposure at each renewal
- Limited control over the asset
The testIn the current LA office market, the concession package on a ten-year lease is worth enough that leasing frequently beats buying on a pure cost-of-occupancy basis.
The owner-user case, honestly
Owner-occupancy is the strongest buying case in Los Angeles right now, because SBA 504 financing lets a qualifying business acquire at roughly 10% down at a blended rate in the low-to-mid sixes — terms an investor cannot get. If your business is stable, profitable, and has a durable space requirement, buying converts an expense into an asset at unusually favorable leverage.
The honest counterargument: that down payment is capital removed from your operating business, and most businesses generate a higher return on capital internally than real estate does. If your company can deploy $600,000 into equipment, headcount or inventory at a 25% return, buying a building at a 6% yield is a poor allocation regardless of how the real estate performs.
Buy when the space requirement is genuinely fixed, when you want to control the asset, or when you want the retirement asset that owning your building creates. Do not buy because rent feels like wasted money — that framing has cost LA business owners more than it has saved them.
What LA product is trading at
Cap rates and financing benchmarks, Q2 2026
Pricing has repriced around a higher cost of capital rather than collapsed. Industrial, grocery-anchored retail and supply-constrained multifamily have held investor demand. Legacy office has not, and a meaningful share of the wide office cap rates below are asking rather than transacting.
| Asset type | Cap rate range | Read |
|---|---|---|
| Infill industrial — Vernon, Commerce, Compton, Carson | 5.8–6.3% | No developable land behind it |
| South Bay industrial (port-adjacent) | 5.9–6.4% | Record leasing; advanced manufacturing |
| Multifamily — Westside prime | 3.5–4.5% | RSO exposure must be verified |
| Multifamily — mid-city | 4.0–5.0% | Koreatown, Hollywood, Silver Lake |
| Multifamily — Valley, South LA | 5.0–6.0%+ | Higher yield, thinner buyer pool |
| Retail — grocery-anchored | 5.5–6.5% | Necessity retail still bid |
| Retail — unanchored strip | 6.5–8.5% | Tenant credit drives the spread |
| Office — trophy Class A | ~4.5% | Thin volume, flight to quality |
| Office — Class B/C secondary | 9.0%+ | Much of this is asking, not trading |
Two details that belong in your model. Clear height is now a pricing input in industrial: assets at 32 feet clear trade roughly 50–75 basis points tighter than legacy low-clearance buildings in the same submarket. And on the office side, the gap between face rent and effective rent has opened to 20–35% on Class A urban product nationally — so an office rent roll underwritten at face rate is overstated before you begin.
Underwriting the deal
NOI, cap rate, DSCR, debt yield, break-even
Cap rate is the number everyone quotes and the least useful one on its own. It tells you the unlevered yield at a price. It tells you nothing about whether the deal finances, whether it survives a vacancy, or what you actually earn on the cash you put in.
Four numbers matter more:
Debt service coverage ratio (DSCR). NOI divided by annual debt service. Lenders require roughly 1.25× on multifamily and 1.30–1.40× on other property types. Below that, you are not getting the loan at the leverage you assumed — which means more equity, which changes every return figure in your model.
Debt yield. NOI divided by loan amount. Many lenders underwrite to a minimum, typically 7–10% by asset class. This one is leverage-blind and value-blind, which is exactly why lenders like it.
Cash-on-cash return. Annual pre-tax cash flow divided by cash invested. The number that actually describes your position.
Break-even occupancy. The occupancy level at which the property covers operating expenses and debt service. If a building breaks even at 88% occupancy in a submarket running 24% vacancy, you have a problem the cap rate did not disclose.
Underwriting Calculator
The worked example is a $7M infill industrial building, and the Prop 13 and transfer tax calculators below carry the same deal through — so you can watch one acquisition change shape as each cost is added.
What this deliberately excludes. Capital reserves, tenant improvements and leasing commissions on rollover, and the property tax reset covered in the next section. Those three items are where optimistic LA underwriting usually goes wrong — model them separately and subtract.
Underwrite the rent roll, not the offering memorandum
The most common LA underwriting error is not the cap rate — it is accepting in-place rents at face value. Verify each lease against the actual document, not the summary: base rent, escalations, remaining term, options, free rent still owing, TI still owing, and any side letters. Then mark each to market. On multifamily, verify rent stabilization status unit by unit; RSO exposure is the single largest source of blown LA multifamily underwriting.
Financing
What the debt markets look like in 2026
The Fed paused in early 2026 after three cuts in late 2025. Rates are not returning to the last cycle, and lenders have re-entered the market with more discipline on coverage than on leverage. The practical effect: DSCR and debt yield are constraining deals more than LTV is.
Financing Options
| Product | Best for | Indicative rate | Max LTV | Watch for |
|---|---|---|---|---|
| SBA 504 | Owner-user, 51%+ occupancy | ~6.0–6.5% blended | 90% | Slower process; occupancy rule |
| SBA 7(a) | Owner-user, smaller / mixed use | ~9.5–11.75% var. | 80% | Variable; prices off Prime |
| Conventional bank | Stabilized, any type | ~5.0–8.75% | 65–75% | Usually recourse; global cash flow |
| Agency (Fannie/Freddie) | Multifamily 5+ units | ~5.0–6.5% | 75% | Tightest spreads; multifamily only |
| CMBS conduit | Larger stabilized assets | ~6.3–8.0% | 65–70% | Non-recourse; defeasance to exit |
| Life company | Institutional-quality, low leverage | ~5.5–6.75% | 55–65% | Strict debt yield; best assets only |
| Bridge / transitional | Value-add, lease-up, repositioning | ~8.0–12%+ | 70–75% | Short term; plan the takeout first |
Sortable — click any header. Indicative ranges as of early August 2026 for strong sponsors and stabilized assets; your quote will differ. Rates are priced off the 5- and 10-year Treasury or SOFR plus a lender spread driven by leverage, coverage, property type, tenant credit and sponsor strength.
SBA 504, if you qualify
For owner-users this is the most favorable long-term fixed-rate product in commercial real estate, and it is materially underused in Los Angeles.
The structure is two loans: a conventional first trust deed from a bank at roughly 50% of project cost, and a CDC second trust deed backed by an SBA debenture at roughly 40%, with the borrower contributing about 10%. The CDC piece is fixed for 25 years at a rate tied to the debenture sale, which has been running in the 5.5–6.5% range through 2026.
The qualifying conditions that catch people:
Occupancy. Your business must occupy at least 51% of an existing building, or 60% of new construction. You can lease out the balance — many owner-users deliberately buy larger and lease the surplus.
Down payment increases. 15% if the business is under two years old or the property is special-purpose (gas station, hotel, car wash, self-storage). 20% if both apply.
Coverage and credit. Most CDCs and participating lenders want DSCR of at least 1.25× and a personal credit score of 680+, with 700+ meaningfully improving odds.
The trade-off is process. SBA 504 takes longer than a conventional bank loan and carries more documentation. Start the lender conversation before you are in escrow, not after.
What lenders are actually testing
Get three to five term sheets from different lender types — a bank, a CMBS conduit, and an SBA or agency lender will quote the same building very differently. Beyond rate, compare: recourse versus non-recourse, prepayment structure (yield maintenance and defeasance are expensive to exit), interest-only period, amortization, reserve requirements, and whether the lender requires a seismic PML study.
That last one is LA-specific and worth flagging early: many lenders require a probable maximum loss study on older buildings in seismic zones, and a high PML can trigger an earthquake insurance requirement that materially changes your operating expense line.
Your property tax bill resets at close
Proposition 13 reassessment
This is the single most commonly mis-modelled line item in Los Angeles commercial acquisition, and the error is always in the same direction.
Under Proposition 13, a property’s assessed value is anchored to its last change of ownership, then grows by no more than 2% annually. A building held since 2004 may be assessed at a fraction of its market value, and the seller’s operating statement will show property tax based on their assessment.
The moment you close, the County Assessor resets the assessed value to your purchase price. Your tax bill is that new figure multiplied by your Tax Rate Area — the 1% Prop 13 base plus voter-approved bonds and direct assessments. In the City of Los Angeles that lands around 1.21%; across LA County the effective range runs roughly 1.10–1.55%, and 1.25% is a reasonable planning number.
If you underwrite using the seller’s tax line, you have overstated NOI — often by enough to move the cap rate by 50 basis points or more.
Prop 13 Reassessment Calculator
The supplemental bill surprises almost everyone. Two to six months after closing, the County sends a one-time supplemental assessment covering the difference between the seller’s assessment and yours, prorated for the remainder of the tax year. It is typically not covered by your escrow impound account. Budget for it as a closing-period cash item.
The entity transfer rule
Reassessment is not limited to deeded sales. Under California law, a change of ownership also occurs when a person or entity acquires more than 50% of the ownership interest in a legal entity holding real property. Buyers structuring an acquisition as an entity purchase to avoid reassessment need real tax counsel — the rules are specific, the Assessor examines them, and getting this wrong is expensive in both directions.
Measure ULA and your exit math
The transfer tax on the way out
Measure ULA imposes an additional transfer tax on real property conveyances inside the City of Los Angeles. For transactions closing after June 30, 2026, the thresholds and rates are:
| Sale price | ULA rate | Applies to |
|---|---|---|
| Above $5,400,000, under $10,900,000 | 4.0% | Gross sale price |
| $10,900,000 or greater | 5.5% | Gross sale price |
Four things that are routinely misunderstood, each of which costs money:
It applies to gross price, not gain. Basis, improvements and mortgage payoff do not reduce it. A $6,000,000 sale owes 4% of $6,000,000 regardless of what the seller paid.
It cannot be deferred through a 1031 exchange. ULA is a transfer tax, not a capital gains tax. The exchange defers federal and state gain; it does nothing here.
It applies to all property types. Commercial, industrial, retail and multifamily — not just luxury homes, despite the “mansion tax” nickname.
It stops at the city line. Beverly Hills, West Hollywood, Culver City, Burbank, Glendale and Long Beach are separate municipalities and are not subject to ULA. Santa Monica operates its own transfer tax under Measure GS. This creates genuine pricing differences between properties a few blocks apart.
ULA sits on top of the existing LA County documentary transfer tax of 0.11% and the City of Los Angeles transfer tax of 0.45%.
Transfer Tax Calculator
The threshold cliff is the trap. There is no phase-in. At $5,399,000 a City of LA sale owes no ULA. At $5,401,000 it owes roughly $216,000. UCLA research estimates the odds of a property selling above the threshold fell by as much as 55% after implementation — sellers are pricing to stay underneath it, and buyers should expect that behavior in negotiations.
Due diligence
What to inspect, and in what order
A typical California commercial purchase agreement gives a defined due diligence or contingency period — commonly 30 to 60 days, occasionally longer on complex assets — during which the buyer can terminate and recover the deposit. Everything below has to happen inside that window, and several items have lead times that will not compress.
Diligence Timeline: Contract to Close
Red bars are items with hard lead times — they will not compress no matter how motivated everyone is. Order the Phase I, title and survey on day one. A Phase II, if triggered, will blow through a 30-day contingency period on its own, which is why the Phase I timing matters more than its cost.
The LA-specific items
Standard commercial diligence — title, survey, environmental, physical condition, financials — applies everywhere. These are the items that are specific to this market, and they are where LA deals actually go wrong.
- Seismic retrofit statusThe City’s mandatory soft-story and non-ductile concrete retrofit ordinances cover a large share of older LA inventory. Confirm compliance status and whether any order is outstanding. An unretrofitted building carries a capital cost, a tenant-disruption cost, and potentially an insurance problem. Many lenders will also require a seismic PML study, and a high PML can trigger earthquake insurance.
- Rent stabilization (RSO) status, unit by unitFor any multifamily or mixed-use building with residential units. RSO governs allowable increases and just-cause eviction, and it is the single largest source of blown LA multifamily underwriting. Verify against the City’s records, not the rent roll.
- Certificate of occupancy versus actual useConfirm the legal use matches what is happening in the building. Unpermitted conversions, mezzanines and additions are common in older LA industrial and retail, and they become your problem at close — potentially requiring you to open walls or demolish work and rebuild to current code.
- Legal parking countVerify against the certificate of occupancy, not the striping in the lot. Nonconforming parking limits which uses the building can legally support, which limits your tenant pool and your exit.
- Zoning, overlays and ZIMASThe City’s ZIMAS system is public and shows zoning, overlays, historic designation and case history for any parcel. Pull it before you tour. Historic designation in particular constrains what you can change and can add discretionary review to any exterior work.
- Measure ULA on your exitModel it into your hold-period returns, not just your closing statement. A building bought at $9M and sold at $11M crosses a threshold costing roughly $605,000 at 5.5%.
- Title 24 and deferred capitalCalifornia’s energy code is triggered by significant alterations. A value-add plan that assumes cosmetic work often turns out to require lighting and HVAC upgrades. Have the property condition assessment price the whole capital plan, not just immediate repairs.
- Power capacityIncreasingly the binding constraint on industrial and advanced manufacturing assets. Confirm available amperage and service capacity with the utility. Upgrades can take many months and are expensive.
Due Diligence Checklist
This is a working framework, not a complete diligence scope, and it is not legal or tax advice. Scope varies materially by asset type and deal size. Assemble the team — broker, attorney, CPA, lender, environmental consultant, property condition consultant, and a contractor if there is a capital plan — before you open escrow, not during.
Escrow and closing in California
California uses escrow rather than a closing table. A neutral escrow holder receives the deposit, coordinates title, holds the documents, and disburses at recordation. Some practical points that differ from other states:
Title insurance. The buyer typically receives an ALTA extended coverage policy on commercial transactions, which requires a survey. Review the preliminary title report and every recorded exception document — easements, CC&Rs, lot-line agreements and access rights are where problems hide. A prelim without the underlying exception documents is not a review.
Natural hazard disclosure. California requires disclosure of whether the property sits in a designated flood, fire, seismic or liquefaction zone. In LA this frequently matters for insurance cost.
Deposit structure. Deposits typically go hard — become non-refundable — at the end of the contingency period. Know exactly what date that is and what conditions release it.
Closing costs. Beyond transfer taxes, budget escrow and title fees, recording, lender fees and points, appraisal, environmental and physical reports, legal, and prorations. Two percent of purchase price is a workable planning figure on a straightforward deal, more where a Phase II or extensive third-party work is involved.
Prorations. Taxes, rents, security deposits and prepaid expenses prorate at close. Verify that security deposits actually transfer — on smaller LA multifamily assets they are frequently not held where the seller claims.
1031 exchanges
A Section 1031 like-kind exchange lets you defer federal and California capital gains tax by rolling proceeds from one investment property into another. The mechanics are strict and unforgiving:
45 days from closing your sale to formally identify replacement property, in writing, to your qualified intermediary. 180 days from that same closing to complete the acquisition. These run concurrently, not sequentially, and they are calendar days.
You cannot touch the proceeds. A qualified intermediary must hold them. Constructive receipt disqualifies the exchange entirely.
Replace value and debt. To fully defer, the replacement property generally must be of equal or greater value, and you must replace the debt you paid off or contribute equivalent cash. Any shortfall is boot, and boot is taxable.
Owner-occupied property does not qualify. 1031 is for property held for investment or productive use in a trade or business. An owner-user buying their own building is not doing a 1031 on the operating side.
The LA-specific caveat, again: an exchange does nothing for Measure ULA. If you are selling a City of Los Angeles property above the threshold, the transfer tax is due at closing on gross price whether or not the gain is deferred. Model it as a cash requirement at sale.
Line up the replacement before you sell
Forty-five days is short in a market where the best LA product frequently trades off-market. Exchange buyers regularly overpay because the clock forced them to. If a 1031 is part of the plan, begin the acquisition search before your sale closes — and discuss reverse exchange structures with your intermediary and CPA if the timing is tight.
By property type
Industrial
The most durable LA asset class, and the most supply-constrained. Clear height, power, dock configuration, truck court depth and column spacing determine both the tenant pool and the exit. Infill product in Vernon, Commerce, Compton and Carson has essentially no developable land behind it, which is why it trades tightest despite a soft rent cycle. Verify legal outdoor storage rights separately — they are frequently assumed and not permitted.
Office
Highest risk and highest dispersion. The question on any LA office asset right now is whether it is a conversion candidate, a repositioning candidate, or a stranded asset — and that answer is floor-plate, window-line and parking specific, not submarket-wide. Underwrite rollover brutally: assume real downtime, real TI, real leasing commissions, and effective rather than face rents.
Retail
Necessity and grocery-anchored retail continues to attract capital; unanchored strip depends almost entirely on tenant credit and lease structure. Read every lease for co-tenancy clauses, exclusives and percentage rent. A co-tenancy provision tied to an anchor that is struggling is a contingent liability sitting inside your rent roll.
Multifamily
Verify RSO status unit by unit before anything else — it governs your entire income model. Also confirm soft-story retrofit compliance, since a large share of LA’s older apartment stock is covered by the ordinance. Westside prime trades in the 3.5–4.5% range and Valley and South LA product in the 5–6%+ range, and the spread reflects regulatory exposure as much as location.
RelatedCommercial leasing in Los Angeles: the complete guide Back to the hubLos Angeles commercial real estate: 2026 market guideFive mistakes that cost real money
Underwriting on the seller’s property tax. Covered above, and it is the most common one. Your tax resets to purchase price at close.
Ignoring ULA until the exit. A 4–5.5% transfer tax on gross price is a material drag on hold-period returns. It belongs in the model on day one, not in the closing statement on day 1,800.
Trusting the rent roll. Read the leases. Verify RSO unit by unit. Get estoppel certificates from every tenant confirming rent, term, options, deposits and any landlord obligations still outstanding.
Skipping the capital plan. A property condition assessment that prices only immediate repairs is half a report. Ask for a twelve-year capital reserve table, then check it against seismic, Title 24 and ADA obligations that a standard PCA may not price.
Starting financing too late. Lender appraisal, environmental review and, on older buildings, a seismic PML study all have lead times. Buyers who open escrow before talking to lenders routinely burn half the contingency period discovering their leverage assumption was wrong.
Frequently asked questions
How much do I need to put down to buy commercial property in Los Angeles?
For an owner-user qualifying for SBA 504, roughly 10% of project cost — rising to 15% if the business is under two years old or the property is special-purpose, and 20% if both. For investment property with conventional bank financing, expect 25–40% depending on asset type, coverage and sponsor strength.
Budget closing costs on top. Two percent of purchase price is a workable planning figure on a straightforward deal, and more where extensive third-party reports are needed.
Will my property taxes go up when I buy?
Almost certainly, and often substantially. Under Proposition 13 the assessed value resets to your purchase price at close. If you are buying from a long-term owner whose assessment is anchored to a much older purchase, the increase can be several times their current bill.
Budget your tax line at purchase price times your Tax Rate Area — roughly 1.21% in the City of Los Angeles, with the county range running about 1.10–1.55%. Also expect a one-time supplemental bill two to six months after closing that is typically not covered by escrow impounds.
What is Measure ULA and does it apply to commercial property?
Yes, it applies to all property types. Measure ULA is an additional transfer tax on real property conveyances inside the City of Los Angeles. For closings after June 30, 2026, sales above $5,400,000 are taxed at 4% and sales of $10,900,000 or more at 5.5%, calculated on gross sale price rather than gain.
It cannot be deferred through a 1031 exchange, and it does not apply outside City of LA boundaries — Beverly Hills, West Hollywood, Culver City, Burbank, Glendale and Long Beach are separate jurisdictions. Thresholds adjust annually with the Chained CPI, so verify current figures before structuring a transaction.
What is a good cap rate in Los Angeles?
There is no universally good number — a low cap rate signals perceived safety and a high one signals perceived risk. What matters is whether the rate is appropriate for that asset class and submarket.
As of 2026: infill industrial clears near 5.8–6.3%, Westside multifamily 3.5–4.5%, grocery-anchored retail 5.5–6.5%, and secondary-corridor Class B office is asking 9% and above — though much of that office product is asking rather than transacting. Always check whether the quoted cap rate is calculated on the seller’s property tax or on your reassessed figure.
Should my business buy or lease its building?
Buy when the space requirement is stable for ten or more years, when you want control of the asset, and when the down payment does not compete with a higher return available inside the business. SBA 504 financing at roughly 10% down makes the arithmetic considerably more favorable than most owners assume.
Lease when headcount is uncertain, when capital is better deployed operationally, or when you need a location you could not afford to buy. In the current LA office market, the concession package on a long lease is strong enough that leasing frequently wins on pure cost of occupancy.
How long does a commercial purchase take in Los Angeles?
Typically 60 to 90 days from executed contract to close, with a 30 to 60 day due diligence or contingency period inside that. Complex assets, assumption financing or SBA loans run longer.
The items that will not compress are the ALTA survey, the lender’s appraisal, and any Phase II environmental assessment. Order title, survey and the Phase I on day one.
What is DSCR and why do lenders care more about it than LTV?
Debt service coverage ratio is net operating income divided by annual debt service. It measures whether the property’s income covers the loan payment. Most lenders require about 1.25× on multifamily and 1.30–1.40× on other property types.
In the current environment coverage is constraining more deals than leverage is. A building can appraise at your purchase price and still not support the loan you wanted, because higher rates mean higher debt service against the same NOI. Many lenders also test debt yield — NOI divided by loan amount — with minimums typically 7–10%.
Can I use a 1031 exchange to avoid transfer taxes?
No. A 1031 exchange defers federal and California capital gains tax. Documentary transfer taxes and Measure ULA are transfer taxes assessed on the conveyance itself, and they are due at closing on gross price regardless of whether gain is deferred.
Plan for the transfer tax as a cash requirement at sale. On a City of Los Angeles property above $10.9M, that is 5.5% of gross price plus the county and city documentary transfer taxes.
What is a Phase I environmental site assessment and do I need one?
A Phase I ESA is a non-invasive review of a property’s environmental history — records, historical use, aerial photographs, adjacent sites and a site walk — to identify recognized environmental conditions. Nearly every commercial lender requires one, and it is a prerequisite for certain liability protections under federal law.
If the Phase I identifies a recognized environmental condition, a Phase II involves actual sampling and can take considerably longer than a standard contingency period allows. In LA this matters most on industrial property with historic manufacturing, dry cleaning or fuelling uses. Order the Phase I on day one.
What is a soft-story retrofit and how does it affect a purchase?
Los Angeles has mandatory retrofit ordinances covering wood-frame soft-story buildings and non-ductile concrete buildings — structures with a weak ground floor, typically tuck-under parking, and older concrete construction. Compliance is required on a set schedule.
Before purchase, confirm the building’s status and whether any order is outstanding. An unretrofitted building carries capital cost, tenant disruption during work, and potential insurance consequences. Many lenders will separately require a seismic probable maximum loss study, and a high PML can trigger an earthquake insurance requirement that changes your operating expense line.
Does buying through an LLC avoid property tax reassessment?
Generally no. California treats it as a change of ownership when a person or entity acquires more than 50% of the ownership interest in a legal entity holding real property, which triggers reassessment the same way a deeded sale does.
There are structuring approaches, and there are also anti-avoidance rules and reporting obligations. This is a question for a California tax attorney and your CPA before you structure the deal, not after.
What should I ask for in due diligence that most buyers forget?
Tenant estoppel certificates from every tenant, confirming rent, term, options, deposits and any outstanding landlord obligations. The recorded exception documents behind the preliminary title report, not just the prelim itself. A twelve-year capital reserve table rather than an immediate-repairs list. The certificate of occupancy compared against actual use. And the seismic retrofit compliance status.
On multifamily, add unit-by-unit rent stabilization verification against City records. On industrial, add confirmed power capacity and legal outdoor storage rights.
Buyer Representation
Have one in mind but need someone in your corner?
We protect and negotiate for buyers — underwriting the rent roll rather than the offering memorandum, and pricing the tax reset and transfer tax before you are committed, not after.