Why LA landlords are choosing to sell rather than retrofit - Soft Story Advisors

Why LA landlords are choosing to sell rather than retrofit

One word: Earthquakes

Los Angeles may have lucked out in comparison to the East Coast this year, but there is one ominous natural disaster that is keeping landlords up at night.

Property owners are now choosing to sell their buildings altogether, rather than deal with the cost of retrofitting older apartment buildings put at risk by earthquakes, CoStar reported.

Approximately 13,500 properties in L.A. in need of retrofitting, according to a list released last year by city officials. Around 3,000 owners have begun the daunting process and over 300 buildings have completed the retrofitting.

City ordinance requires the retrofit of pre-1978 wood-frame, soft-story and non-ductile concrete buildings. But the cost of retrofitting, which includes construction costs and tenant relocation expenses, is seeming to be too much for some.

Colliers International even created a new task force to address properties that have seismic problems under the leadership of senior vice president Reza Ghobadi. Just this year, Ghobadi has sold five properties on the City’s seismic retrofit list. The combined total for the sales clocked in at nearly $18 million — a pretty penny for buildings that could potentially face destruction when the “big one” at the San Andreas Fault comes. [CoStar] – Natalie Hoberman

About Us

Real Estate and Business Veteran, Gordon Myers founded Soft Story Advisors out of the real need he witnessed daily, in the field.

Building Owners are stressed and concerned with hiring the best contractor and/or engineer to comply with various city ordinances because they know that a bad decision can be a very expensive and painful experience.

Licensed as a Realtor in 1988, Gordon has been actively buying, selling, developing, managing and investing in real estate and can easily recognize a one-sided deal vs. a good, fair one!

He immediately recognized the opportunity and foresaw the chaos when the Ordinance came out, requiring that approx. 12,500 city-identified, multi-family dwellings do the necessary work to support their “soft story,” buildings to better withstand a significant earthquake.

Lessons were learned from Northridge in 1994, and again in Mexico in 2017, providing evidence that Soft Story Buildings are more likely to collapse with any lateral movement during a strong earthquake.