How each type is priced
- Leased office, retail, and industrial sell on net operating income and cap rate: the buyer buys the leases. Term remaining, tenant credit, escalations, options, and who pays operating expenses matter more than finishes.
- Vacant or owner-user buildings sell on price per square foot against recent sales of similar buildings, with functionality (clear height, loading, parking ratio, power) driving the comparison.
- Mixed-use is priced on both, and in Los Angeles the residential units above the storefront bring the RSO and just-cause rules with them — see selling an apartment building in Los Angeles.
- Land sells on what can be built: zoning, density, entitlements in hand, and the city's current housing programs. An unentitled lot and a fully entitled one can differ by multiples.
- See cap rate, NOI & GRM explained for the arithmetic buyers use.
The lease audit buyers run (so run it first)
- Every lease, amendment, and option, with a rent roll that matches them to the dollar.
- Estoppel certificates from each tenant confirming rent, term, deposits, and that no side agreements exist — lenders require them, and collecting them takes weeks in a multi-tenant building.
- Operating-expense reconciliations for the last two years: CAM, taxes, and insurance pass-throughs are where buyers find surprises.
- Trailing 12 months of actual income and expenses, plus a current budget.
- Deferred maintenance and capital items — roof, HVAC, elevators, parking, ADA path-of-travel items that a change of use or tenant improvement can trigger.
The Los Angeles compliance questions
- Zoning and use. Buyers check the parcel in the city's zoning system (ZIMAS) and confirm the certificate of occupancy matches the actual use. Unpermitted mezzanines, conversions, or a use the zone does not allow show up here.
- Seismic. Beyond soft-story wood-frame buildings, the city's ordinances also reach non-ductile concrete buildings on a longer timeline; retrofit status and any open orders are disclosable and priced.
- Environmental. Commercial buyers routinely order a Phase I environmental site assessment; industrial, automotive, dry-cleaning, and older gas-station parcels should expect it and may face a Phase II. Having your own recent report shortens escrow.
- Business tax and registration. Rental income in the city is subject to the Los Angeles business tax; buyers ask whether the account is current.
Measure ULA and transfer taxes
Every sale inside the City of Los Angeles pays the standard documentary transfer tax — $1.10 per $1,000 to the county plus $4.50 per $1,000 to the city. Sales above roughly $5.3 million also pay Measure ULA: 4% of the entire price, and 5.5% above roughly $10.6 million (thresholds adjust each July for inflation; confirm the current figures). ULA applies to commercial property exactly as it does to homes, is paid by the seller, and is calculated on the whole price rather than the excess — a $5.4M sale pays roughly $216,000 more than a $5.2M sale. Price near the line with that arithmetic in front of you, and remember the rule is the city the parcel sits in: Vernon, Commerce, Burbank, Glendale, and unincorporated county each have their own schedules.
How the sale usually runs
- Pricing and packaging. An offering memorandum with the rent roll, T-12, lease abstracts, site plan, zoning summary, and photos; pricing set with your agent off income or comparable sales as above.
- Marketing. Commercial platforms, the MLS where appropriate, broker networks, and direct outreach to owner-users and investors who buy this type in this submarket.
- Offer and due diligence. Typically 30–45 days for document review, inspections, the Phase I, lender underwriting, and estoppels; larger or land deals run longer.
- Escrow and closing. Prorations of rents, deposits, and taxes; the property is reassessed to the sale price under Prop 13; transfer taxes and, above the threshold, ULA are paid at closing. Plan 45–90 days from accepted offer to close for a financed buyer.
The 1031 clock
To defer gain, identify replacement property within 45 days of closing and close within 180 days, with a qualified intermediary engaged before the sale closes. Between depreciation recapture, capital gains, and ULA, the tax planning on a Los Angeles commercial sale should start before the listing agreement (our CPA guide covers who to hire).
See the market you are selling into
Browse what is listed now: office, retail, industrial, mixed-use, and land for sale in Los Angeles, or all commercial real estate in Los Angeles. The statewide playbook is in how to sell commercial property in California.