Deal “SEQUENCE”

In my over five decades of commercial real estate brokerage, I’ve transacted over 2000 times! Some have found me on the occupant side of the aisle and in others I’ve advocated for an owner with a vacant building. Rarely - but it happens - I’ve straddled the two factions ala Ben Hur. This is legal in our world and is known as “dual agency”. Candidly, I prefer the separation where two professionals are involved.
 
In considering the deal, I developed - with a little AI help - an acronym for for the steps taken in a commercial real estate transaction. I believed them to be column worthy - so here goes.
 
• S – Source - Developing opportunities before they exist.
This includes outbound efforts like mailers, marketing campaigns, social media content, tapping into inactive clients, direct-to-owner outreach, and any strategic activity that creates deal flow where there previously was none.

• E – Evaluate and identify a lead 
Through sourcing, a lead is uncovered. Whether it’s identifying an active tenant requirement or uncovering a property that fits a buyer’s criteria, this is the moment a generalized opportunity becomes a targeted pursuit.

• Q – Qualify - Determining if the lead is worth the pursuit.
This includes my 7-step QUALIFY framework: Quantitative Need, Urgency, Authority, Loyalty, Intent, Fuel, and Yearning—the litmus test for whether the lead has traction and potential.

• U – Under Control - Securing the right to act. Using an exclusive authorization to represent, listing agreements, or exclusive agency agreements, this step ensures you are no longer guessing—you’re executing under formal terms.

• E – Execute - Activating the plan.
Here, you’re touring buildings, sourcing off-market options, or locating buyers or tenants for vacant buildings. It’s about making the market work through active engagement, creative matchmaking, and transactional momentum.

• N – Negotiation and close - Signing on the dotted line.
Whether a lease is executed or escrow closes, this is the transaction’s inflection point—when opportunity becomes reality.

• C – Commission (Bill & Collect) The first rule of brokerage: get paid! 
Delivering the invoice, ensuring documentation is complete, and creating accountability for payment. This reinforces professionalism and prepares for the next critical step. The transaction isn’t truly complete until commission is received. Collection is part persistence, part process, and part diplomacy.
 
• E – Expand (Capitalize) - Turning today’s deal into tomorrow’s momentum. This includes sending press releases, updating social media, client thank-you's, marketing your success, and most importantly, nurturing referrals and building repeat business from experience.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

Reshoring: A Boon for U.S. Real Estate and Local Economies

For decades, American companies sent manufacturing operations overseas in search of lower costs. Cheap labor, fewer regulations, and efficient global supply chains made offshoring the dominant strategy for everything from electronics to pharmaceuticals. But the tide is turning.

 
Reshoring—the process of bringing manufacturing and supply chains back to the U.S.—has gained momentum in recent years. Supply chain disruptions during the pandemic, geopolitical tensions with China, and rising overseas labor costs have forced companies to rethink their strategies. Add in government incentives like the CHIPS Act and tax credits for domestic production, and reshoring are no longer just patriotic talking points—they are a business necessity.
 
While this shift brings economic benefits, one sector poised for significant gains is industrial real estate. Industrial space and logistics hubs are seeing increased demand as companies look to rebuild supply chains on American soil.
 
Industrial Real Estate’s Big Moment
Manufacturing may have been outsourced, but demand for industrial real estate has remained strong, thanks to e-commerce. Now, reshoring is adding another layer of demand, particularly for manufacturing and distribution space.
 
Manufacturers looking to reshore need factory space, and they’re not just eyeing traditional industrial strongholds like the Midwest. Texas, Arizona, and the Southeast are emerging as major reshoring hubs due to business-friendly policies, affordable land, and proximity to key transportation networks. Even California, despite high costs, is benefiting from semiconductor and biotech reshoring, thanks to its deep talent pool and access to ports.
 
With this shift, developers are repurposing outdated office and retail properties into industrial use. The conversion of big-box retail into warehouse and distribution centers is already happening, and underutilized office campuses could be next in line for transformation into R&D labs or advanced manufacturing facilities.
 
The Logistics Boom
Manufacturing doesn’t work in isolation. It needs a strong logistics network to move raw materials in and finished products out. That’s why reshoring is fueling growth in warehouse and distribution space, particularly in regions with easy access to rail, highways, and ports.
The trend is especially pronounced near inland logistics hubs like Dallas-Fort Worth and Atlanta, where vast warehouse developments are emerging to support reshored manufacturing operations. Port cities like Savannah, Charleston, and Los Angeles are also seeing an uptick in industrial activity as reshoring strengthens domestic supply chains.
 
Challenges to Overcome
Reshoring isn’t a magic bullet. Companies bringing production back to the U.S. face significant challenges, including labor shortages, infrastructure gaps, and higher operating costs.
The U.S. manufacturing workforce has shrunk over the years, and finding skilled workers is a growing concern. Companies investing in reshoring must also invest in workforce training and automation to bridge the skills gap. Community colleges and vocational programs are beginning to step up, but this will be a long-term effort.
 
Another hurdle is infrastructure. While industrial construction boomed prior to 2023, roads, bridges, and ports need upgrades to handle increased freight movement. Power supply is another issue, particularly for energy-intensive industries like semiconductor and electric vehicle battery production.
 
A Long-Term Shift
Despite these challenges, reshoring is not a short-lived trend—it’s a structural shift that will reshape American industry for decades. Advances in automation and AI are making domestic production more cost-competitive, and companies now recognize the risks of over-reliance on overseas supply chains.
 
For commercial real estate, this means continued demand for industrial space, adaptive reuse opportunities for underperforming assets, and expansion of logistics hubs. Cities and states that invest in infrastructure and workforce development will be the biggest beneficiaries of this new era of American manufacturing.
 
Reshoring is more than an economic shift—it can be a real estate revolution!

 Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

Tariffs: Trade Policy or Just Another Negotiation Tactic?

The other day, the issue of tariffs came up in a casual conversation. You see, a friend—we’ll call him Jim, because that’s his name—enjoys reading my column. I was flattered! Anyway, he mentioned that tariffs would make a good column topic. We quickly agreed, however, that the underlying motivation of an administration imposing tariffs is often less about economic policy and more about negotiation.

Since Jim and I both negotiate for a living—he in the courtroom and I in commercial real estate—it struck me that tariffs aren’t just about leveling the playing field. More often than not, they’re a tool wielded to push for better deals. And in that respect, they’re not so different from the tactics used in boardrooms, lease negotiations, and legal disputes.

Take a recent example: when an administration announces a tariff on imported goods, it’s easy to assume the goal is to make domestic industries more competitive by making foreign products more expensive. That’s the textbook definition. But in practice, tariffs are often more about leverage. A country imposes tariffs not necessarily to keep them in place forever, but to extract concessions—lower tariffs on their own exports, stricter protections for intellectual property, or better trade terms overall.

If that sounds familiar, it’s because the same playbook is used in real estate negotiations all the time. Sellers list properties at inflated prices not because they expect to get them, but because they know buyers will push back. Landlords demand above-market rents knowing tenants will counter. In each case, the initial position is not the true goal—it’s a starting point in a larger negotiation.

Attorneys, like my friend Jim, take a similar approach. Motions, objections, and procedural tactics aren’t always about winning outright; sometimes, they’re just tools to gain leverage. A well-placed motion might force the other side to rethink their position, just as a newly imposed tariff might push a trade partner back to the bargaining table.

And yet, for those caught in the middle, the impact can be very real. In real estate, when negotiations drag on, tenants may face uncertainty, and deals can stall. In legal battles, a drawn-out process can drain resources. With tariffs, businesses that rely on imported goods—manufacturers, retailers, and consumers—often bear the immediate burden of higher costs, even if the long game is about brokering a better deal.

So how do you navigate these tactics? Whether you’re a business owner, investor, or consumer, recognizing the difference between a firm position and a negotiation strategy is critical. Is the other side genuinely standing their ground, or are they just applying pressure to move things in their favor? Understanding this can help you stay level-headed in negotiations and avoid making knee-jerk reactions that could cost you in the long run.

In the end, whether in global trade, real estate, or the courtroom, the art of negotiation remains the same. The first offer, the initial demand, or the newly imposed tariff isn’t always about the outcome—it’s about the process of getting there.

Jim and I left that conversation with a shared conclusion: tariffs may shape economic policy, but at their core, they’re just another tool in the game of negotiations. And as any good negotiator knows, it’s not about the first move—it’s about who walks away with the better deal.

 Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.

 
 

The Office Space Reckoning: What’s Next for Empty Buildings?

I have a friend who ran a small accounting firm in a mid-rise office building off the 405. He had a corner suite with a view of the freeway—nothing glamorous, but solid. For years, he paid his rent on time, kept his staff of five happy, and felt secure knowing his office space was a symbol of his firm’s steady success. Then came the pandemic, and with it, the great work-from-home migration. By 2021, his lease was up, and he made a decision that landlords across Southern California now dread: he let it go.
 
Fast forward to today, and that once-bustling office tower is still struggling to fill vacancies. My accountant friend, like so many others, now operates remotely, with employees who have no desire to return to a traditional workspace. His old office? A ghost town—one of many scattered across the region.
 
The Office Space Dilemma
Southern California’s office market is at an inflection point. Vacancy rates in key markets like Downtown Los Angeles, Orange County, and even the tech-heavy hubs of the Westside are at record highs. According to industry reports, some buildings now hover around 30-40% vacancy—numbers that would have been unthinkable pre-pandemic.
 
Many landlords are feeling the squeeze. With high interest rates and declining property values, some are defaulting on loans or handing the keys back to lenders. Others are scrambling to repurpose their spaces, but office-to-residential conversions—while a hot topic—are easier said than done.
 
The Affordable Housing Mandate and Office Conversions
California has long been in an affordable housing crisis, and state leaders see underutilized office buildings as a potential solution. Governor Gavin Newsom and local municipalities have been pushing zoning changes and incentives to encourage office-to-housing conversions. On paper, it sounds like a perfect match: empty buildings meet an urgent housing need. In reality, it’s a far more complex equation.
 
Many office towers were never designed for residential use. Deep floor plates, lack of windows, and outdated infrastructure make conversions expensive and, in some cases, structurally impractical. 
 
Developers also face regulatory hurdles, with zoning laws, permitting delays, and financing challenges slowing progress. 
 
While some successful conversions have taken place—such as the historic Tribune Tower in Oakland—most landlords are finding it more feasible to hold out for office tenants than take on the massive costs of redevelopment.
 
So What Happens Next?
The commercial real estate industry is at a crossroads, and the future of office space will depend on creative solutions. Some landlords are embracing mixed-use redevelopment, incorporating residential, retail, and entertainment into former office hubs. Others are investing in high-end amenities to attract tenants back—think wellness centers, private clubs, and hospitality-driven office experiences.
 
But the hard truth is that Southern California will have to adapt to a world where remote and hybrid work are permanent fixtures. That means some office properties will never return to their pre-pandemic heyday. It also means that cities and developers will need to work together to make adaptive reuse more financially and logistically viable.
 
As for my accountant friend, he doesn’t miss his office much. His firm is thriving, his staff enjoys the flexibility, and he no longer has to sit in rush hour traffic on the 405. 
 
For him, the office space reckoning isn’t a crisis—it’s a new reality. And for commercial real estate, it’s time to figure out what that reality looks like.
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

The Next Big CRE Disruptor: What’s Coming for the balance of 2025?

Commercial real estate is no stranger to disruption. Over the years, we’ve seen tech booms, financial crashes, pandemic-induced pivots, and policy shifts—each shaping how, where, and why properties are bought, sold, and leased.
 
Now, as we  have eclipsed two months of 2025, the question is: What’s next? What trends, policies, or economic shifts will send ripples—or shockwaves—through the commercial real estate industry this year? While no one has a crystal ball, here are the key forces that could redefine commercial real estate as we know it.
 
1. The Interest Rate Wild Card
After a rollercoaster ride of rate hikes in 2023 and 2024, all eyes are on the Federal Reserve. If interest rates come down, expect renewed investment activity as buyers jump back into the market, particularly in asset classes like multifamily, retail, and industrial.
 
On the flip side, if rates remain elevated, property values could continue their adjustment downward, forcing sellers to get realistic about pricing. Distressed assets may hit the market at more aggressive discounts, creating opportunities for well-capitalized investors to scoop up deals.
 
Either way, financing costs will remain a major player in 2025—shaping everything from new development to refinancing strategies.
 
2. The Great Office Reset Continues
Office space is still in a state of flux. While some markets have rebounded, others are saddled with record-high vacancy rates. The remote work debate is far from settled, and companies are still rightsizing their footprints.
 
The trend to watch in 2025? Adaptive reuse. Cities like New York, San Francisco, and Chicago are actively pushing for office-to-residential conversions, and the success of these projects could pave the way for similar initiatives nationwide. If office landlords can’t lease their space, many will be forced to sell, redevelop, or repurpose—and that shift could redefine entire downtowns.
 
3. The Rise of AI-Driven Commercial Real Estate
Artificial intelligence is quickly moving from novelty to necessity in commercial real estate. By 2025, expect AI to play a bigger role in:
·        Market forecasting – Predicting tenant demand, property values, and investment trends.
·        Automated transactions – AI-driven platforms could streamline leasing and deal negotiations.
·        Property management – Smart buildings will rely on AI to reduce energy costsand optimize occupancy.
 
The biggest disruptor? AI-powered brokerage tools. If a machine can analyze a property’s value, predict tenant turnover, and match buyers with sellers in seconds—where does that leave traditional brokers? The smart ones will adapt by using AI as a tool rather than seeing it as competition.
 
4. Industrial’s Growth Slows—Especially in Class A Logistics
For years, industrial real estate was the darling of commercial property investment, fueled by e-commerce expansion, supply chain shifts, and reshoring efforts. But as we move into 2025, cracks are beginning to show—especially in the Class A logistics sector.
 
After years of feverish development, many major markets are now oversupplied with large, high-end distribution centers, leading to rising vacancy rates and flattening rents. Markets like Dallas, Phoenix, and Inland Empire have seen an influx of new construction deliveries at a time when demand from major tenants—especially e-commerce giants—has cooled.
 
This isn’t a collapse, but it is a correction. Leasing activity is still happening, but at a slower pace, and landlords are being forced to offer concessions or lower rentsto attract tenants. Investors who banked on continued breakneck absorption rates are now reassessing their strategies, particularly in overbuilt logistics corridors.
 
That said, not all industrial real estate is slowing. Smaller, last-mile distribution centers in dense urban areas remain in demand as retailers optimize delivery networks. Similarly, sectors like cold storage and specialty manufacturing continueto see steady interest.
 
For industrial owners, 2025 will be about differentiation—Class A landlords may need to get creative with tenant incentives, while niche industrial assets will likely hold their value better in a cooling market.
 
5. Retail’s Reinvention Continues
The so-called retail apocalypse never fully materialized, but the sector is definitely evolving. In 2025, successful retail centers will be those that blend experience, entertainment, and essential services.
 
Expect to see:
·        More medical and wellness tenants filling retail spaces.
·        A continued boom in grocery-anchored centers, which have proven resilient.
·        The rise of “click-to-brick” showrooms, where online brands open physical stores to engage customers.
 
Retail landlords who embrace tenant diversity and mixed-use elements will stay ahead of the curve, while those clinging to outdated formats may struggle.
 
Final Thoughts
If history has taught us anything, it’s that commercial real estate never stands still. Every market cycle, every technological advance, and every policy shift brings new challenges—and new opportunities.
 
As we’re into 2025, the industry’s next big disruptor could come from any direction—interest rates, AI, adaptive reuse, or even a policy shift we haven’t seen coming yet. The winners will be those who stay ahead of the trends, adapt quickly, and embrace change as the only constant.
 
So, buckle up. The next CRE transformation is already underway.
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

How Presidents Have Shaped Commercial Real Estate

As I pen this column, we celebrate Presidents’ Day—a cool winter holiday originally meant to honor Washington and Lincoln’s birthdays but now mostly a day off from work and school. When I was a kid, February was a rapid-fire month of celebrations—Lincoln’s birthday on the 12th, Valentine’s Day on the 14th, and Washington’s birthday on the 22nd. Over time, two of these events have merged into one, but this year, a well-placed Friday-to-Monday stretch created a four-day weekend for SoCal school kids.
 
Reflecting on presidential legacies got me thinking: beyond politics, what decisions have truly shaped the commercial real estate landscape? From massive land acquisitions to economic policies that influenced leasing, investing, and development, presidential decisions have had a lasting impact on how, where, and why commercial real estate thrives.
 
So, in honor of Presidents’ Day, here are ten of the most influential moves that changed our industry forever.
 
1. The Louisiana Purchase (1803)
With one signature, Thomas Jefferson doubled the size of the United States, opening vast territories to expansion. This set the stage for land speculation, western development, and the eventual rise of cities that became hubs for commerce and industry. Imagine what CRE looked like before places like St. Louis, Denver, and New Orleans became economic powerhouses.
 
2. The Panama Canal (Completed in 1914, championed by Theodore Roosevelt)
By cutting transit time between the Atlantic and Pacific Oceans, the Panama Canal revolutionized global trade and transformed U.S. port cities into industrial and logistics hubs. Today’s industrial real estate boom—think massive distribution centers near ports—owes much to this early infrastructure investment.
 
3. The Smoot-Hawley Tariff Act (1930)
Passed under President Hoover, this protectionist tariff worsened the Great Depression by stifling trade. The ripple effects devastated commercial real estate, as businesses closed, industrial demand plummeted, and office vacancies soared. A lesson learned: real estate is highly sensitive to trade policy and economic shifts.
 
4. The Small Business Administration (1953, Eisenhower)
By providing federally backed loans to small businesses, the SBA made it easier for entrepreneurs to purchase office and industrial spaces. Countless shopping centers, strip malls, and local office buildings have been filled by SBA-assisted businesses over the years, fueling demand for small-bay industrial, retail, and professional space.
 
5. Nixon Opens China (1972)
When Richard Nixon reestablished diplomatic and trade relations with China, the move triggered decades of economic transformation. Factories in the U.S. closed as manufacturing shifted overseas, reshaping industrial real estate. Warehouse and logistics space replaced manufacturing plants, and West Coast port cities like Los Angeles, Long Beach, and Seattle became critical import hubs.
 
6. Reagan’s 1986 Tax Reform Act
This landmark tax overhaul eliminated many real estate tax shelters and changed depreciation rules, altering how investors approached CRE. The shift led to a market downturn in the late ’80s, followed by a new focus on long-term, sustainable investing strategies. Investors learned that tax policy alone shouldn’t dictate real estate decisions.
 
7. Enterprise Zones (1980s-Present)
Various presidents have championed enterprise zones—designated areas offering tax breaks and incentives to encourage business investment in struggling regions. These policies, from Reagan’s initiatives to the Opportunity Zones under Trump, have fueled development in underutilized areas, sparking growth in commercial real estate.
 
8. The Affordable Care Act (2010, Obama)
While primarily a healthcare law, the ACA’s impact on commercial real estate was profound. The expansion of medical facilities, urgent care centers, and specialty clinics surged, increasing demand for medical office space. Meanwhile, some businesses downsized their footprints in response to new insurance mandates. When selling real estate assets, a 3.8% tax was imposed as well.
 
9. Trump’s Tariffs (2018-Present)
Trade wars with China and other nations led to increased manufacturing costs and supply chain disruptions. However, these policies also triggered a renewed push for domestic production, fueling demand for industrial space and reshoring manufacturing facilities—a trend that continues today.
 
10. COVID Lockdowns (2020, Trump & Biden)
Perhaps no recent event has reshaped commercial real estate more than the COVID-19 lockdowns. Office vacancies skyrocketed as remote work took hold, retail faced massive upheavals, and industrial real estate boomed with e-commerce demand. The long-term effects are still unfolding, but one thing is certain—CRE will never look the same again.
 
Final Thoughts
Presidents’ decisions don’t just influence policy—they reshape the very fabric of our cities, our businesses, and the commercial real estate from which we operate. From land acquisitions to tax laws to trade policies, every move in Washington sends ripples through our industry.
 
Looking ahead, the question remains: what policy decisions today will shape the next era of commercial real estate? If history is any guide, the effects will be felt for decades to come.
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

The Industrial Gold Rush Slows: Why Class A Logistics Development in Southern California Is at a Crossroads

If you’ve driven through the Inland Empire lately, you’ve likely noticed the seemingly endless stretch of massive warehouses sprouting up like weeds after a rainy season. These aren’t your grandfather’s industrial buildings—these are Class A logistics facilities, the gold standard of modern warehousing.
 
But what exactly defines a Class A logistics building, and why has Southern California been ground zero for their development?
 
What Makes a Logistics Building “Class A”?
In commercial real estate, “Class A” is the best of the best. For logistics buildings, that means high ceilings (32 to 40 feet clear height), wide column spacing, expansive truck courts, and an abundance of dock doors. These facilities are designed for maximum efficiency, helping retailers and logistics companies move goods as quickly as possible.
 
Modern Class A warehouses also feature state-of-the-art technology, including automation, robotics, and advanced climate control for specialized storage needs.
 
Sustainability has also become a priority, with many new projects incorporating LEED certification, solar panels, and EV infrastructure to meet California’s stringent environmental regulations.
 
Why Has Southern California Been a Logistics Boomtown?
Southern California has long been a logistics hub, but in recent years, industrial development has reached unprecedented levels, particularly in the Inland Empire. The reasons have been as clear as a truck’s route on a traffic-free I-10 (if only that ever existed).
 
First and foremost, the Ports of Los Angeles and Long Beach handle nearly 40% of U.S. imports, making the region a critical entry point for goods from Asia. Companies have historically needed distribution centers close to these ports to move inventory quickly, reducing supply chain costs and delivery times.
 
The rise of e-commerce further accelerated demand. Consumers now expect next-day or even same-day delivery, requiring strategically located fulfillment centers. Major players like Amazon, Walmart, and FedEx aggressively expanded their logistics footprint to keep pace.
At its peak, the Inland Empire was a developer’s dream—land was more affordable than in Los Angeles or Orange County, and proximity to major transportation corridors made it an ideal distribution hub. Vacancy rates were historically low, and new warehouses were often leased before construction was even completed.
 
A Market Shift: From Undersupply to Oversupply
But what was once a perfect storm of demand has now flipped on its head. Since mid-2022, the market has cooled significantly, and supply has now outpaced demand.
 
Massive speculative development, combined with a post-pandemic slowdown in e-commerce growth and shifting inventory strategies, has led to a glut of new industrial inventory—especially in the Inland Empire. The frenzied leasing activity of 2020-2022 has slowed, leaving many newly constructed warehouses sitting empty.
 
The impact? Rents have begun to soften, and landlords are increasingly offering concessions—free rent, tenant improvement allowances, and flexible lease terms—to spur absorption. It’s a stark contrast to just a couple of years ago when landlords held all the leverage.
 
The Investment appetite Adjusts
Institutional investors, once bullish on Southern California’s industrial sector, are now treading more cautiously. Rising interest rates have further complicated the picture, making development financing more expensive and prompting some developers to hit pause on new projects.
 
Still, despite the current correction, Southern California remains one of the most critical logistics markets in the world. As long as goods continue flowing through its ports, the region will be a key player in global trade. The question is whether landlords, developers, and investors can adjust to a new reality—one where growth isn’t limitless, and strategic leasing efforts will be just as important as new construction.
 
The Road Ahead
So, what’s next? The market is recalibrating, and 2024 will be a year of absorption rather than expansion. Developers and investors who were riding the wave of relentless demand will now need to focus on filling vacancies, managing rental expectations, and offering incentives to attract tenants.
For communities, that means fewer new projects breaking ground—but also a more balanced industrial market that could lead to more sustainable long-term growth.
One thing’s for sure—those massive warehouses aren’t going anywhere. But for the first time in years, some of them might be sitting empty a little longer than expected.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

New Law Shakes Up Buyer Representation in California—What It Means for Commercial Real Estate

A major shift has arrived in California real estate, and if you’re in the business—whether residential or commercial—you need to pay attention.
 
As of January 1, 2025, Assembly Bill 2992 (AB 2992) requires that real estate agents representing buyers must enter into a written buyer-broker representation agreement with their clients. While this practice has long been common in residential real estate, the fact that it now extends to commercial transactions adds a new layer of formality—and potential friction—to the way deals get done.
What’s in the Law?
For starters, this isn’t just a suggested best practice. Under AB 2992, written agreements are now mandatory when representing buyers. No more handshake deals or loosely defined relationships. Brokers must present and execute a buyer-broker representation agreement with their client before submitting an offer on a property.
These agreements must include:

• The broker’s compensation terms

• A breakdown of the services the broker will provide

• The conditions under which the broker gets paid

• The duration of the agreement and how it can be terminated

For individual buyers, these agreements cannot exceed three months—and automatic renewals are prohibited. However, if the buyer is a corporation, LLC, or partnership, there’s no limit on duration.
In addition, before signing, brokers must provide buyers with a written agency disclosure form, ensuring they fully understand the nature of the representation and the broker’s role in the transaction.
What This Means for Commercial Real Estate
While commercial brokers are no strangers to formal agreements, this law forces a more structured and transparentapproach to buyer representation. In some ways, this is a good thing—establishing clear expectations up front can reduce misunderstandings later. But in an industry where relationships and flexibility are key, some see this as unnecessary government interference.
Brokers will now need to:

• Lock in client commitments earlier. Those informal “let’s see what’s out there” conversations may now need to be backed by signed paperwork sooner than some clients expect.

• Clearly define compensation terms. No more vague or open-ended agreements. Brokers must spell out exactly how and when they will be paid.

• Educate clients about the new rules. Some buyers, especially those used to the old way of doing things, may push back on signing agreements upfront. Brokers will need to walk them through why this is now required.

The Big Picture
California has been moving toward more consumer protection in real estate for years, and AB 2992 is just the latest step. While it might create short-term headaches for brokers who are used to looser arrangements, it ultimately aims to bring more clarity and accountability to buyer-broker relationships.
Whether this shift strengthens the industry or just adds another layer of red tape remains to be seen. But one thing is certain—if you’re working with buyers in California real estate, you’d better get those agreements in writing.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

A Decade of Change: The 10 Biggest Events in Commercial Real Estate Since 2015

Today marks a milestone I never imagined when I wrote my first column for the Southern California News Group ten years ago. Back then, I approached commercial real estate as a puzzle—complex, fascinating, and full of moving parts. Ten years later, that hasn’t changed, but the pieces themselves certainly have.
 
Writing this column has given me a front-row seat to some of the most dramatic transformations in the industry, many of which have touched not just buildings and businesses but the way we live, work, and shop. To mark this anniversary, I’ve reflected on the ten biggest events and trends that have shaped commercial real estate over the past decade.
 
1. The Rise of E-Commerce and the Decline of Traditional Retail
It’s hard to overstate how much e-commerce has changed the retail landscape. When I started writing, shopping malls were struggling, but most still felt like community hubs. Today, many of those same malls have been converted into warehouses, medical centers, or even housing. The retail spaces that survived learned to adapt, focusing on experiences that can’t be replicated online.
 
2. The Co-Working Revolution (and WeWork’s Wild Ride)
Remember when co-working spaces were just for freelancers? Then came WeWork, which turned flexible office space into a global phenomenon before its very public implosion. Despite WeWork’s struggles, the concept of flexible office space took root, and today, hybrid work models have made flexibility more important than ever.
 
3. The Industrial Real Estate Boom
Ten years ago, warehouses were the quiet workhorses of real estate. Now, they’re the rock stars. E-commerce and the need for faster deliveries turned industrial space into one of the hottest commodities in Southern California, with the Inland Empire leading the charge. Finding available space became a challenge as rents soared and demand outpaced supply.
 
4. The Pandemic’s Impact on Offices
COVID-19 changed everything—especially how and where we work. Remote work, once a perk, became a necessity, and it sent shockwaves through the office market. Companies downsized, reconfigured, or questioned their need for physical offices altogether. Landlords are still figuring out what the future holds, and so are the rest of us.
 
5. Adaptive Reuse Gains Traction
If the last decade taught us anything, it’s the value of reinvention. Underperforming malls, empty office buildings, and even old hotels were transformed into new uses like housing and mixed-use developments. Adaptive reuse isn’t just practical—it’s creative, and it highlights the industry’s ability to evolve.
 
6. The Explosion of PropTech
Technology found its way into every corner of real estate over the last decade. From smart buildings to digital platforms that streamline leasing and property management, PropTech became an essential tool. The days of handwritten rent checks and manual building inspections feel like ancient history now.
 
7. The Affordable Housing Crisis
Southern California’s housing crunch became impossible to ignore. Every discussion about development now comes with a focus on affordability—or the lack thereof. The crisis has pushed the industry to grapple with tough questions about zoning, density, and who real estate truly serves.
 
8. The Climate Change Imperative
Sustainability moved from being a "nice-to-have" to a “must-have.” Green buildings, renewable energy, and water-efficient designs are now priorities, especially in Southern California. Climate-conscious development isn’t just about compliance anymore—it’s about future-proofing properties for the generations to come.
 
9. Opportunity Zones
When Opportunity Zones debuted in 2017, they were hailed as a game-changer for distressed communities. While they did spur development, they also sparked debates about whether they truly benefited the people they were meant to help. Still, the program left its mark on how we think about incentives and investment.
 
10. Institutional Investors Enter the Single-Family Market
If you’ve struggled to buy a home in recent years, you’re not alone—and institutional investors are part of the story. Over the last decade, major players entered the single-family rental market, buying up homes in bulk and changing the dynamics of suburban housing. The shift sparked debates over affordability and fairness, but one thing is certain: it reshaped the market.
 
A Decade of Transformation
Reflecting on these changes, I’m struck by one constant: real estate never stands still. It adapts, reinvents itself, and reflects the world we live in—sometimes for better, sometimes for worse, but always with a story to tell.
 
Writing this column has been one of the greatest privileges of my career. It’s given me the incentive to reflect, introduced me to some awesome people and enabled me to highlight issues that confront owners and occupants of commercial real estate. 
 
I’m grateful for your readership!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

What the Gulf South can teach us about commercial real estate

I’m penning this column overlooking the Mississippi sound - a tributary of the Gulf of Mexico. After spending time in New Orleans, Biloxi, and Mobile, I’ve been reflecting on what the Gulf South has to teach us about commercial real estate. These cities, rich with culture and history, also hold valuable lessons for commercial real estate in a region shaped by its unique economic drivers and environmental challenges. Here’s what stood out:
 
Resilience in the Face of Natural Disasters
The Gulf South has faced its share of hurricanes and flooding, but it’s clear that resilience is embedded in the fabric of its development. From elevated structures to advanced drainage systems, commercial real estate projects here are built to withstand nature’s extremes. For anyone in the industry, it’s a reminder that risk mitigation is not optional—it’s a necessity.
 
Industry-Specific Demand
The economic lifeblood of the Gulf South—energy, maritime industries, and tourism—directly shapes its real estate market. You can see it in the industrial warehouses near ports, the corporate campuses for energy firms, and the hotels that cater to millions of visitors each year. Success in commercial real estate hinges on understanding and aligning with these local economic drivers.
 
Port and Logistics Infrastructure
From the Port of Houston to the Port of New Orleans, this region thrives on its strategic position in global logistics. Warehouses, distribution hubs, and industrial spaces are crucial to keeping goods moving. For investors, areas like these with robust logistical networks are ripe with opportunity.
 
A Business-Friendly Environment
States in the Gulf South know how to attract business. Lower taxes and incentives make the region appealing for commercial real estate development, and it shows in the range of office, industrial, and mixed-use projects taking shape. For developers, understanding these incentives can make all the difference.
 
Adapting to Climate Challenges
With rising sea levels and more intense storms, sustainability is no longer just a buzzword here—it’s an imperative. Green building practices, renewable energy integration, and eco-conscious designs are becoming standard. It’s clear that in regions like this, sustainability isn’t just good ethics; it’s good business.
 
The Power of Culture and Demographics
From the vibrant streets of New Orleans to the historic charm of Mobile, the Gulf South’s cultural identity is unmistakable. This diversity is reflected in the demand for mixed-use developments, retail spaces, and community-focused projects. Commercial real estate that taps into the local culture not only thrives but also strengthens the connection between spaces and people.
 
Emerging Secondary Markets
While cities like New Orleans and Houston often grab the headlines, smaller markets like Biloxi and Mobile are quietly gaining traction. These areas offer lower barriers to entry and opportunities for significant growth. For those willing to look beyond the obvious, the Gulf South’s secondary and tertiary markets are full of potential.
 
Tourism and Hospitality
The Gulf South is a magnet for tourists, whether they’re drawn to New Orleans’ festivals, Biloxi’s casinos, or the Gulf Coast beaches. This creates steady demand for hotels, vacation rentals, and entertainment venues. For commercial real estate, the lesson is clear: when you invest in what makes a place unique, the returns often follow.
 
Our recent travels were a vivid reminder that the Gulf South is more than just a fascinating region—it’s a case study in the importance of adaptability, alignment with local economies, and resilience in commercial real estate. These lessons aren’t just regional but universal for the commercial real estate industry.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

What the Monterey Peninsula Can Teach Us About Commercial Real Estate

As I shared last week, I celebrated the 68th year of my birth recently. My wife treated me to a weekend at Pebble Beach. I know. But someone had to do it.
 
We stayed in a spot overlooking the iconic Pebble Beach golf links—home of the annual AT&T Pro-Am and countless major championships over the years. The golf course has witnessed so many unforgettable moments, from Jack Nicklaus’ famous one-iron shot to a foot at the 17th hole in the 1972 U.S. Open to Tiger Woods’ runaway U.S. Open victory in 2000. Orange County is well represented, too, with Mark O’Meara hoisting the AT&T trophy a record five times and Jordan Nasser claiming the title of California amateur champion there in 2006. As a lifelong golfer, I was in awe.
 
The weather can be a bit tricky in January, but we rolled lucky snake eyes—clear skies and cool temps. Perfection!
 
So what do my ramblings about the former home of the Crosby Clambake have to do with commercial real estate?
When you think about Pebble Beach, it’s easy to picture the world’s greatest golfers competing on a pristine course, overlooking the rugged coastline. But beneath the beauty and the legends, Pebble Beach is a masterclass in careful planning, adaptability, and excellence—the same principles that apply to success in commercial real estate. 
 
Let me share a few lessons I learned during my visit.
 
It’s the journey, not the destination, that matters.
Each hole at Pebble Beach presents a unique challenge, much like every deal in real estate. Some days, the weather’s perfect, and every shot falls into place. Other days, you’re fighting wind, sand traps, and frustration. But just like in golf, the process of getting there—the strategy, the effort, the adjustments—is where the real value lies. The destination—a trophy, a closing—is just the cherry on top.
 
Professional golfers and real estate agents eat what they catch.
Golfers and real estate professionals share a bond: there’s no safety net. A missed putt or a deal that falls through means starting over. But that pressure drives us to be resourceful, resilient, and relentless. It’s not for everyone, but for those who thrive under the challenge, the rewards are sweeter because we’ve earned every bit of them.
 
Don’t overlook the trees for the forest.
Golfers know that every hole, every shot, every decision matters. It’s tempting to focus on the big picture—your scorecard, the finish line—but the real work happens one stroke at a time. In real estate, the same holds true. It’s the small details that often make or break a deal—a clause in the contract, the way you handle a client, or even the vibe of a property. Don’t lose sight of the trees.
 
Focus on the freedom.
Standing on the 18th fairway at Pebble Beach, gazing out at the Pacific, I couldn’t help but feel an incredible sense of freedom. Golf, like real estate, offers that in spades. You’re not tied to a desk or a clock. Sure, there are deadlines, but the autonomy to chart your own course is priceless.
 
There are many ways to score.
The beauty of golf—and real estate—is that there’s no single path to success. Some win by overpowering the course with booming drives, others by finesse around the greens. In real estate, success can mean building relationships, mastering negotiations, or finding creative ways to add value. The key is to play to your strengths and embrace the diversity of opportunities.
 
As I soaked in the beauty of the Monterey Peninsula, I realized how much the game of golf and the art of real estate have in common. Both demand patience, creativity, and a deep appreciation for the journey. And both, when done well, offer rewards far beyond the scorecard.
 
So, the next time you’re out on the course—or walking through a property—remember this: it’s not just about where you’re going. It’s about how you get there. And sometimes, the view along the way is the greatest reward of all.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

Crazy Things

2025 marks some milestones in my commercial real estate career as well as my stint as an Orange County Register contributing columnist. I’ve now been plying my brokerage trade for 40 years! Wow. Some reading this column aren’t even forty years old, and here I am, doing the same thing for over four decades. February 2025 will also be my 10th anniversary as your faithful commercial real estate voice through these pages. It’s been my honor to share weekly thoughts, market insights, and best practices with you. By the time you read this, I will have completed another orbit around the sun—my 68th. So, there’s that.

Today, I thought it would be fun to share some of the craziest things I’ve witnessed during my forty-year commercial real estate career. Here goes:

There’s a Hole in the Bucket, Dear Liza
This was maybe the most monumental issue I’ve ever overcome. Late one day, I got a call from the buyer of a business park telling me there was a hole in the parking lot. I thought he was joking since we were scheduled to close escrow in a week. He assured me he wasn’t and added that the hole was growing larger by the moment. I quickly got in my car, drove to the site, and was horrified by what I saw. There was a hole the size of a VW Beetle—and it was growing. At this rate, it seemed destined to swallow the entire parking lot and maybe the buildings, too.
Fortunately, we discovered the City of Brea was responsible. A leaking waterline, left unchecked for decades, had caused the collapse. The city fixed the problem just in time for escrow to close, but it’s a moment I’ll never forget.

Bridge to Nowhere
This one is a classic “new agent” story and one of my favorites. We were touring office space on the fifth floor of a newly constructed building. Little did we know that when the door closed behind us, there was no exit. We found ourselves trapped on a fourth-story balcony overlooking a major thoroughfare. This was before the days of cell phones, so we had very few options. Fortunately, a vagrant passed by, and after a bit of bribery, he helped free us. Lesson learned: always check for an exit before the door closes behind you!

Freeze, Gopher!
The scariest tour I ever conducted happened in a vacant building in Anaheim. My partner and I arrived early to preview the premises and turn on the lights for our client. As we fumbled in the dark for the power panel, we suddenly heard, “Freeze!”
Two Anaheim PD officers, guns drawn, confronted us. It turns out we had tripped a silent alarm in our search for the lights. Thankfully, they realized we weren’t burglars, and we were able to laugh about it later… much later.

Rain, Rain, Go Away
We once sold a site in Anaheim that had formerly been a fiberglass manufacturing company. Years of fiberglass residue had permeated the floors and soil around the building. I was certain the site would fail its environmental test, killing our escrow. But, as luck would have it, torrential rains hit the night before the inspection. The rain washed away all visible traces of the residue, and the site received environmental clearance. Sometimes, Mother Nature lends a hand.

Houston, We Have a Problem
Never in my career was I as scared as during the financial meltdown of 2008 and 2009. It felt like the end of our industry. I had already survived the savings-and-loan implosion and the dot-com bubble burst, but this was different. I had the largest deal of my career under contract, and it blew up during this time. After mourning the loss, I put my head down and got to work. It was tough, but the market eventually rebounded, as it always does.

Microscopic Foe
Exactly five years ago, I attended an economic presentation by Northwestern Mutual. The forecast predicted a strong economy through 2020, with only a slight chance of softening. There was a brief mention of a virus causing supply chain issues in China, but the presenter didn’t seem concerned about its impact on the U.S. economy.
Two months later, we were quarantined in our home offices. I was convinced this was the black swan event that would crater our commercial real estate market. For six weeks, it looked like I was right. But then something unexpected happened. Industrial real estate values skyrocketed. Between June 2020 and June 2022, rents and per-square-foot values tripled in some cases. It turns out all that online shopping required a lot of warehouse space.

Conclusion
Forty years in commercial real estate has given me a front-row seat to some of the wildest, scariest, and most surprising moments. From sinkholes to silent alarms to global pandemics, this industry is anything but predictable. Yet, through it all, I’ve learned to adapt, stay resilient, and find humor even in the craziest situations.
As I celebrate these milestones, I’m reminded of what a privilege it is to do what I love and share my experiences with you. Here’s to the next adventure—and maybe even crazier stories—in the years to come!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.
 
 

2025 Predictions

Happy new year dear readers and welcome to 2025! Yes.  It’s that time of year when I get to prognosticate on what this year might bring in the world of commercial real estate. I have a high bar to reach since my 2024 crystal ball was in fact, crystal. 
 
So what might 2025 bring? Let’s get our Nostradamus on, shall we?
 
The State of the Market
As we step into 2025, it’s clear that the ripples of 2024’s market conditions are still making waves. The industrial sector remains a mixed bag—demand for large logistics spaces has softened compared to its pandemic-era peak, but there’s still steady activity in the smaller spaces under 200,000 square feet. Many owners entered this year holding their breath as vacancy rates ticked up in certain submarkets.
 
Interest rates, the ever-present elephant in the room, continue to dampen transaction activity. The cost of financing has sidelined some buyers and made leasing a more attractive option for others. Meanwhile, sellers are navigating the gap between the prices they want and the reality of what the market will bear.
 
Prediction #1: The Return of Creativity
Necessity is the mother of invention, and in 2025, we’ll see more creativity in deal structures. Sale-leasebacks, options to buy, seller financing, and joint ventures will gain prominence as market participants find ways to make deals pencil. Sellers who resist adjusting to the current pricing environment will need to meet buyers halfway through innovative terms.
 
For tenants, expect landlords to sweeten the pot. More free rent, tenant improvement allowances, and flexible lease terms will be offered as owners vie for occupancy in a more tenant-favorable environment.
 
Prediction #2: Resilient Submarkets
While some industrial hubs will see softer demand, others will shine. In 2025, we’ll see heightened activity in submarkets that offer strategic advantages—whether it’s proximity to major ports, affordable labor, or access to large consumer bases. The Inland Empire in California and areas in the Midwest and Southeast will likely see continued attention from both owners and occupants. 
 
What’s interesting is the “flight to quality” within these markets. Class A properties with modern amenities, ample parking, and high clear heights will see increased demand because the price gap has narrowed between older, less functional spaces. 
 
Prediction #3: The Rise of Reshoring
Last year, we started to see the effects of reshoring—companies bringing manufacturing and distribution closer to home. In 2025, this trend will accelerate as the new administration takes office - especially in the industrial sector. Proximity to end users, reduced reliance on overseas suppliers, and geopolitical stability are driving this shift.
 
What does this mean for commercial real estate? 
Secondary and tertiary markets will shine as companies seek affordable land and labor. Don’t be surprised if you hear about booming activity in places you’ve never associated with industrial growth before.
 
Prediction #4: AI Steps Into the Spotlight
Artificial intelligence will play a bigger role in commercial real estate in 2025. From automating lease management and analyzing market trends to predicting tenant behavior, AI tools are becoming indispensable. Brokers, landlords, and investors who embrace AI will gain an edge in efficiency and decision-making.
 
One area poised for disruption is site selection. AI-driven platforms will help occupants analyze logistics networks, labor availability, and even local energy costs to identify the best locations. On the transactional side, expect faster due diligence as AI speeds up property evaluations, financial modeling, and risk assessments. Those who adapt quickly will find themselves ahead of the curve.
 
Prediction #5: Caution, Not Panic
If 2024 taught us anything, it’s that this market rewards patience. In 2025, investors will remain cautious but opportunistic. Those with cash will find opportunities to acquire properties at more reasonable valuations. Expect a slow-but-steady transactional pace as everyone waits for interest rates to stabilize and inflation to ease.
 
Occupants, meanwhile, will be strategic, leveraging market conditions to secure favorable terms while keeping a close eye on operating costs. Gone are the days of hasty decisions; this year, it’s all about deliberate, informed choices.
 
Looking Ahead
If I’ve learned anything from years in this business, it’s that predicting the future is equal parts art and science. The trends we see now—creativity in deals, resilient submarkets, reshoring, the rise of AI, and cautious optimism—are the best indicators of what’s to come.
 
So, dear readers, here’s to a year filled with resilience, adaptability, and maybe even a few surprises. Let’s revisit these predictions in 12 months to see just how clear my crystal ball was this time.
 
Cheers to a prosperous 2025!
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.