“In every conceivable manner, the family is link to our past, bridge to our future.” – Alex Haley
I thought the above quote does a nice job of encapsulating the influence that time has on the “family dynamics”. In my work with multi-generational families and their commercial real estate portfolios I continue to observe how significantly a family’s history plays an influence on their present and future dynamics. There are families I work with that have been committed to building a strong and unified bridge even in the face of generational and economic difficulties. These families have taken responsibility for the past. They have turned these challenges into a present opportunity to develop a cohesive yet adaptable plan with their family and their real estate holdings with the aim of carrying forward a positive message over the generations. Other families that I work with have allowed their family history to greatly hinder their present relationships thus creating a faulty operating environment of victimhood and blame. The good news is that in the latter circumstance there is always an opportunity for a family to use their history to forgive, heal and reunify. It is incredibly gratifying work for me to observe families that recommit themselves to each other and drop past transgressions. These families work to take responsibility for their past narratives and build their legacy strategy for the present and future generations. The results of this commitment are stronger and richer relationships and a more collaborative and respectful working environment to make difficult decisions with their commercial real estate portfolios.
— Jeff Gould, LAA Principal and Founder
For 2018 we wanted to point out three macro trends in commercial real estate that are becoming increasingly relevant to our clients:
- Wealth Transfer – The wealth transfer “wave” is growing like a tsunami with trillions of US dollars are anticipated to be transferred from generation to generation over the next 5 to 10 year period. A good portion of this wealth transfer is associated with tangible assets including commercial real estate. Effective wealth transfer strategies are becoming increasingly imperative to address issues associated with real estate transfers and family dynamics.
- Building Modernization & Technology – Technology is shifting The commercial real estate landscape rapidly and owners are recognizing that they need to get up to speed quickly on modernization strategies because tenants are demanding these upgrades. Yes, modernization and efficiency costs money but these strategies can be the catalyst to attracting and retaining tenants, yielding operational efficiencies, and leading to financial ROI.
- Taxes, Taxes, Taxes – Tax reform has been the big elephant in the room for commercial real estate owners. Our team is constantly working with estate planning advisors to develop effective transition plans with commercial real estate portfolios that help to mitigate tax impact for the next generation of families that inherit these assets.
A Legacy property is a real estate asset that has maintained its historical and/or cultural significance over multiple generations. It is a symbolic representation of not only the community for which it serves but also the storied history of family owners that have been responsible for ensuring its transition over time.
Ownership transitions with legacy properties are ripe with potential trials and tribulations that, if not properly planned for, can lead to disagreement, distress, and financial surprises that have a lasting impact on both the value of the legacy property and the human relationships established over multiple generations of ownership.
The most successful multi-generational property owners establish a property succession plan to address both the “human” and “property” level dynamics for today, tomorrow and over time. The establishment of an actionable succession plan allows the current owner and their family to re-discover the property in the context of current and future market cycles and plan for change. This plan is oriented around some of the following key questions from both a “property” and “human” level.
- “Property” Level Dynamics – Today, Tomorrow, and Over-Time
- What are the short and long-term goals with this asset?
- What are the current and impending risks and opportunities associated with this property – Tenant, Debt, Tax Implications, Operations, Rehab, Redevelopment, Restrictions, etc.?
- What are areas of operational and value enhancement that owners needs to start planning for today
- What does the current market look like for this property and how is this anticipated to change in the future?
- Is technology going to have an impact on the future viability of this asset? If so, how?
- “Human” Level Dynamics – Today, Tomorrow, and Over Time
- What does the current and future organizational chart and decision making tree look like for this property – Investment, Management, Ownership?
- What does the make-up of the next generation of owners look like as it relates to estate planning – Trustees, Beneficiaries, etc.?
- What are the interests, skills, conflicts and emotional states of the next generation of property owners?
- What roles and responsibilities do I need to consider filling now to ensure a smooth transition over time?
We are excited to announce our newest case study series co-hosted by Inheriting Wisdom and Lineage Asset Advisors entitled The Legacy Properties Series: The Value, Significance and Inherent Obstacles for Multi-Generational Owners. Please stand by for more information on the second part of our series which delves into the storied history of some of the most unique properties and owners in Southern California.
WHAT: The Legacy Property Series – Highlighting Unique Properties & Their Family Ownership
WHEN: Ongoing, First event on October 19th, 2017 at 5:30pm
WHERE: Multiple locations, First event at Culver City Hotel
The Legacy Property Series provides attendees with rare insight into the untold history of some of Southern California’s most unique and storied properties told from the perspective of the current owner. This series touches on topics that are relevant to multi-generational families that own commercial real estate. Expect an interactive experience that real estate families can relate to and learn from…
The Property – Hear the unique and storied history of these legacy properties. Participate in a guided tour of the asset. Gain first-hand perspective about the property and its transitions from the owner.
The ownership Perspective – Gain candid insight from the property owner about the challenges they have faced related to investment and management decision, internal family dynamics, estate planning strategies and other financial and transitional dynamics.
A multi-generational Perspective – Listen as owners share their experiences, harnessing the strengths, and coping with the challenges of unique legacy assets. Relate to others who know the powerful influence of the dynamics of family decisions.
Meet other legacy property owning families who will share their valuable observations, insights, experiences, and strategies in transitioning their commercial real estate assets from generation to generation.
Stay tuned for the next event in the series…
- October 19, 2017, The Culver City Hotel with Maya Mallick
- January 2018, more details to follow.
Jeff Gould, Lineage Asset Advisors
Drs. Carolyn Friend & Jamie Weiner of Inheriting Wisdom
Founded in 1985, Make-A-Wish® Tri-Counties has granted the wishes of more than 1,500 local children in Ventura, Santa Barbara and San Luis Obispo counties on the central coast of California. Jeff Gould joins the board this August 2015.
“Jeff Gould, director of the Los Angeles Better Buildings Challenge agreed: ‘We are seeing an increasing interest from brokers, landlords and tenants alike on how to integrate energy and water efficiency into the conversation during a transaction — the natural intervention point for this conversation is during a sales, lease or financing event.’”
“What was most critical to the church was ensuring the preservation of the senior affordable housing on the property,” Jeff Gould, Colliers International VP, tells GlobeSt.com. Gould represented the seller in the transaction along with his Collier’s colleagues VP David Casper, SVP Mark Tarcynski and VP Adam Ticsher.
Link to PDF Article
Symphony Development, which specializes in student housing and college-related mixed-use projects, bought a 1.5-acre US Postal Service site (9534-9546 Reseda Blvd), one block west of Cal State Northridge for $5.5M. The buyer plays to redevelop the site, now occupied by an aging one-story post office, when the lease expires in six years. According to Colliers’ Jeff Gould, who repped both sides, the Northridge Specific Plan calls for higher-density development over the next decade in this region, including multifamily housing and mixed-use retail development.
Link to PDF
The former Plummers Furniture building at 244 E. Thousand Oaks Boulevard has reportedly sold for $2.6 million, according to Colliers International, which closed the sale. The prominent retail property was sold to a private investment group, SNS Partners LLC, in an all-cash deal, according to Colliers’ senior associate Jeffrey Gould, who along with Chris Itule represented both parties in the transaction. The seller was a Los Angeles family trust. The buyer, who owns multiple properties along Thousand Oaks Boulevard, intends to offer the 21,000-square-foot building for lease to retail or office tenants, according to Colliers.
Link to Article
Our team at Lineage Asset Advisors is dedicated to the highest level of integrity and professionalism. We look forward to being a resource for you on commercial real estate related matters. Please feel free to contact us anytime with questions.
Principal | Founder
Get In Touch
Lineage Asset Advisors, Inc.
1804 14th Street
Santa Monica, CA 90404
5959 Topanga Canyon Blvd, Suite 220
Woodland Hills, CA 91367
BRE License #01437048