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Tuesday, Sep 26, 2023

Entitlements, Leases Drive Land Practice

Real estate law firm Gaines & Stacey has seen a flurry of business thanks to a booming housing market and pandemic-related lease negotiations, founder Fred Gaines said.The Encino firm at 16633 Ventura Blvd. saw developers come to them for entitlements during the past year, especially for projects where a lot of money had been spent already.“People said, ‘Let’s use this time to get entitlements done and have them in hand at the other end of the tunnel,’” added Gaines. “I work with people on making applications, going through the entitlement process, getting approvals.”Government commissions needed for the entitlement process, such as planning boards, city councils and coastal commissions, were waylaid last year while entities figured out how to deal with the virus.Current lease negotiations at Gaines’ firm deal heavily with sanitation requirements and other health guidelines related to COVID.“It has certainly come up as an issue from design to contracting to those who are looking into tenancy now, between landlords and tenant as far as who will be responsible for aspects of sanitation,” explained Gaines. “It’s really an open question that no one really knows yet.”The open floor plans popular for the last decade raise questions for the post-COVID office.“Architects, engineers and some of those more creative office spaces, when people go back to those offices sometime this year, are they going to require barriers and more separation?” Gaines asked.He expects legal issues like these to influence lease language in the future too.“We’ll start to see new standard lease language that will be more even-handed on how a situation like this gets handled,” he said.Mid-year, multifamily projects continued on their way to approval and construction while other projects – depending on the industry – weren’t so lucky.The real estate attorney has seen projects pulled from the hospitality sector, while retail and office has been “very slow,” Gaines told the Business Journal.Depending on summer travel and possible changes in business stays, that might change: “You see new hotel growth when hotel occupancies are 75 to 80-plus percent. That’s when people say, it’s time to look into adding hotel stock. I don’t think we’re going to get back up to that occupancy percentage. We’ve been way down in the 20 percent range. I think travel over the summer might double that – people are going to take long driving trips.”Gaines isn’t as optimistic with business travel. “Businesses have adjusted to doing less business travel and some of that will maintain. A third of the business travel from before might not ever come back,” he noted.In addition to his role as firm founder, Gaines also serves as chairman of the Valley Economic Alliance. He stepped down from the Calabasas City Council late last year to concentrate on his role at the nonprofit.

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