Browse Tag: Real estate

Commercial Real Estate News Roundup For June 22, 2015

 

CRE markets look strong for the near future, Google considers move to an abandoned shipyard, Fannie Mae helps low income families secure units in multifamily properties, retail struggling during tough Q1 and more.  It’s all here at the Commercial Real Estate national news roundup for June 22, 2015.

 

General

Office

Industrial

Retail

 

Multifamily

 

 

 

Commercial Real Estate News Roundup For June 8, 2015

Multi-family drives market nationally, 65 percent increase in loan origination nationally, industrial is industrial-strength and top multifamily amenities capture the imagination – it’s all here in the Commercial Real Estate News Roundup for June 8, 2015.

General

The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
The commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
commercial real estate industry continues to grow at a very healthy pace, and we have been extremely active in this recovery period. Part of our growth in activity is a result of some growth initiatives we undertook a couple of years ago. We have added a significant number of professionals to our origination staff. But some of that in – See more at: http://www.rejournals.com/2015/06/05/recovering-cre-market-keeping-commercial-lenders-busy/#sthash.F0SGbWwE.dpuf
  • How Low Oil Prices Could Benefit CRE GlobeSt.com, June 4,2015 – Low prices will affect various property segments, especially energy dependent locations over the next several years. Not all the news is great.

Office

Industrial

  • The Recession-Proof Sector, Commercial Property Executive, June 3, 2015 – Self-storage real estate investment trusts (REITs) do well in an up economy and a down economy.

Retail

ell and lease back more of its major stores, a strategy that has been employed by other major retailers.Read more at: https://www.bisnow.com/national/news/retail/investors-pressure-macys-to-sell-real-estate-46498?utm_source=CopyShare&utm_medium=Browser

ell and lease back more of its major stores, a strategy that has been employed by other major retailers.Read more at: https://www.bisnow.com/national/news/retail/investors-pressure-macys-to-sell-real-estate-46498?utm_source=CopyShare&utm_medium=Browser
  • “Perfect Storm” Driving Up Retail Assets, GlobeSt.com, June 1, 2015 – An aggressive market driven by retail that is anchored by grocery stores such as Trader Joes’s and Mariano’s is driving prices up and cap rates down per driving prices up and cap rates down whenever well-located product hits the market. (Requires registration).

 

Multifamily

  • City Needs More Multifamily Development, GlobeSt.com, June 3, 2015 – Urban Land Institute’s recent presentation in Los Angeles sites more multifamily development needed with affordable housing and creative use of densely populated spaces.
  • This Firm is Winning Emerging Multifamily Markets, GlobeSt.com, June 3, 2015 – Indoor-outdoor space, rooftop decks, pet-friendly amenities top the list among the elements desirable in apartment development during “Multifamily Momentum” panel at RealShare San Diego.

Latest NAR Commercial Real Estate Outlook

 

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas is provided by REIS Inc., a source of commercial real estate performance information.

Office Markets

Office vacancy rates are forecast to slightly decline from 15.7 percent in the fourth quarter to 15.6 percent through the fourth quarter of 2015.

The markets with the lowest office vacancy rates in the fourth quarter are Washington, D.C., at 9.3 percent; New York City, 9.6 percent; Little Rock, Ark., 11.6 percent; San Francisco, 12.2 percent; and Seattle, at 12.8 percent.

Office rents are projected to increase 2.4 percent in 2014 and 3.3 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 35.6 million square feet this year and 48.8 million in 2015.

Industrial Markets 

Industrial vacancy rates are expected to fall from 8.8 percent in the fourth quarter to 8.4 percent in the fourth quarter of 2015.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.6 percent; Los Angeles, 3.7 percent; Seattle, 5.8 percent; Miami, 6.0; and Palm Beach, Fla., at 6.5 percent.

Annual industrial rents should rise 2.4 percent this year and 2.9 percent in 2015. Net absorption of industrial space nationally is expected to total 110.7 million square feet in 2014 and 102.5 million square feet next year.

Retail Markets

Vacancy rates in the retail market are expected to decline from 9.7 percent currently to 9.5 percent in the fourth quarter of 2015.

Currently, the markets with the lowest retail vacancy rates include San Francisco, at 3.5 percent; Fairfield County, Conn., 3.9 percent; San Jose, Calif., 4.6 percent; Orange County, Calif., 5.2 percent; and Long Island, N.Y., at 5.3 percent.

Average retail rents are forecast to rise 2.0 percent in 2014 and 2.5 percent next year. Net absorption of retail space is likely to total 11.4 million square feet this year and jump to 18.9 million in 2015.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates slightly increase from 4.0 percent currently to 4.3 percent in the fourth quarter of 2015. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are Orange County, Calif., and Sacramento, Calif., at 2.2 percent; Providence, R.I., and New Haven, Conn., at 2.3 percent; and Hartford, Conn., at 2.5 percent.

Average apartment rents are projected to rise 4.0 this year and 3.9 percent in 2015. Multifamily net absorption is expected to total 216,300 units in 2014 and 171,200 next year.

 

 

 

“Mommy, Mommy, look at the maintenance!”

Cover of "Miracle on 34th Street (Special...
Cover via Amazon

I know this astonishing New York Times piece “When The 13-Year-Old Picks A $14 Million Condo” looks only at a few super-wealthy families and how some of them select apartments and condos in Manhattan, and I know that as such it doesn’t represent how the majority of families look for multifamily dwelling in the remaining 99.9% of the United States.  Even with all that being the case, I can’t help but wonder how it’s possible that an apartment story – or any real estate story — can give me the willies as much as this one did.

It’s one thing to involve your kids in important decisions. It’s perfectly fine to try to inculcate in kids a sense of propriety and shrewdness in making the arrangements that affect them. Taking an interest in the numbers, the locations, the social and economic conditions in which we live is all better done earlier than later in life because forewarned is forearmed.

But it’s something else entirely — something unseemly — when the super-rich hand over the process of finding new Manhattan digs to their kids, creating a kind of internet-fueled churn where brokers email cc: listings data to the teen sons and daughters of buyers.  It’s not that the kids aren’t qualified to compare and contrast the pros and cons of one luxury condo vs. another – in a lot of ways, they are. What boggles the mind is considering at what age it ends.  Twelve?  Ten?  Eight?  What’s the age cutoff where pointing and clicking — and working to close on — eight-figure luxury properties stops being plausible and starts being ludicrous?

Bonnie Hut Yaseen, an associate broker at Fox Residential, is used to the youth vote by now. “I’m seeing this trend where parents are coming in to look at my listings and proudly announcing that it was their son or daughter who found it,” she said. “They’re finding an unexpected resource in their children.”

Of course, there is cinematic precedent for all this. In the 1947 classic “Miracle on 34th Street,” a skeptical little girl will believe in Santa Claus only if he can arrange the acquisition of a house she saw in a magazine listing.

Ms. Yaseen said that in the past children saw their homes-to-be only when it was time for the parents to assign them their bedrooms. “Now, in some cases, the kids are coming on the first visit to an apartment because they want to know if it’s as good in reality as it looked online,” she said. “They’ll sometimes be there with paperwork, with a printout from a website.”

Read the entire story at the New York Times

Zillow and Truila Finally Merge, Form Zillow Group

After a exhaustive seven-month anti-trust review by regulators, the Zillow-Truila merger was finalized on February 17.   Zillow negotiated a $2.5 billion stock/swap merger and formed the Zillow Group that now includes Zillow, Truila, StreetEasy and HotPads. This merger created the largest online sales and rental market for residential property.

This is a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,”  Spencer Rascoff, Zillow Group’s CEO, said about the acquisition. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.”

Paul Levine, previously Trulia’s chief operating officer, will now work as the pre

– See more at: http://chicagoagentmagazine.com/zillow-trulia-deal-complete-whats-move-inc-s-next-move/#sthash.kmv0jgSI.dpuf

 

 

 

This is a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,”  Spencer Rascoff, Zillow Group’s CEO, said about the acquisition. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.”

Paul Levine, previously Trulia’s chief operating officer, will now work as the pre

– See more at: http://chicagoagentmagazine.com/zillow-trulia-deal-complete-whats-move-inc-s-next-move/#sthash.kmv0jgSI.dpuf

This is a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,”  Spencer Rascoff, Zillow Group’s CEO, said about the acquisition. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.”

Paul Levine, previously Trulia’s chief operating officer, will now work as the pre

– See more at: http://chicagoagentmagazine.com/zillow-trulia-deal-complete-whats-move-inc-s-next-move/#sthash.kmv0jgSI.dpuf

This is a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,”  Spencer Rascoff, Zillow Group’s CEO, said about the acquisition. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.”

Paul Levine, previously Trulia’s chief operating officer, will now work as the pre

– See more at: http://chicagoagentmagazine.com/zillow-trulia-deal-complete-whats-move-inc-s-next-move/#sthash.kmv0jgSI.dpuf

According to Chicago Agent Magazine, the finalization was “a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,” as Spencer Rascoff, Zillow Group’s CEO, said about the acquisition. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.”

Zillow Group’s largest competitor is Move, Inc who operates NAR’s realtor.com.  Move is owned by News Corp (NASDAQ:NWSA), but is operated by the National Association of Realtors.  On Tuesday, Move said in a statement on the Zillow-Trulia deal that “Zillow’s year of the merge will be Realtor.com’s year of the surge. As our competitor grapples with the challenges of integrating two very similar businesses, Realtor.com will continue to provide the most accurate and up-to-date property listings in America, as well as the most valuable professional tools for brokers and agents.”

The multifamily / apartment listings on the platforms mentioned above are give it the commercial angle that makes this long-awaited mega-merger worth watching.

5 Reasons to Buy Vs. Rent Commercial Space

Chinwe Onyeagoro
Chinwe Onyeagoro, CEO, FundWell

Purchasing commercial real estate is huge decision that has far reaching impacts on your business’ cash flow, balance sheet, and funding options. So it is really important that entrepreneurs take their time and carefully consider when and why it might make sense to stop renting and invest in commercial property.

A recent report on Small Business Financial Health released earlier this month by FundWell, in partnership with the Federal Reserve Banks of San Francisco and Chicago as well as Pepperdine University, found that only 22% of businesses with excellent financial health had cash available from operations to invest in commercial real estate. In other words, even businesses that are top performers require some third party financing to buy commercial property. That being said, most lender and/or equity investors that a business owner approaches for funding to invest in commercial real estate will want to see that the following five conditions are met:

1) Set Long Term Space Needs – Before you lock yourself into one retail, office, or industrial property, you should have a firm handle on how much physical space your business will need to operate over the next three to five years. Given the time, energy, and costs associated with making this type of investment and building out the space to meet your needs, the last thing you want is to outgrow it after just a year. So if your company is still expanding – staff, customers, and/or products/services – and you cannot confidently project how much space your business will need to operate within the next two to three years, then you should consider waiting until you have a better handle on your future size and build out requirements before you buy.

2) Show Historical Profits – A commercial property is a long term business asset. Entrepreneurs that are in the best position to make investments of this type are those that have a proven business model and a track record of profitability. A business that is profitable typically pays business taxes and has excess cash at the end of each year that can be used to reinvest in the business. Typically businesses that have only been profitable for one or two years focus on reinvesting in business operations to ensure the company has the marketing and business development talent and other staff, inventory, and furniture/fixtures/equipment to support growth. However, by year three and four of profitability, business owners are in a strong position to begin investing in longer term assets like commercial property.

3) Build Cash Reserves – Buying commercial real estate takes “cold hard” cash. When you make an offer to acquire a commercial building, you typically need to provide a cash deposit to demonstrate to the seller that you are serious about completing the transaction. Deposits can run anywhere from 1 to 10% of the total negotiated purchase price of the property. For example: In the case of a retail café that you get under contract for $500,000, the “out of pocket” deposit that you will need to pay is anywhere from $5,000 to $50,000. And even after you get the property under contract, in order to get a loan to complete the purchase an entrepreneur typically needs to show that you have between 10% and 40% of the purchase price available in your bank, money market, and/or investment account to satisfy a prospective lender’s down payment requirements.

4) Evaluate Relative Affordability – It should come as no surprise that any decision to purchase property should include a “rent versus buy” financial analysis. This type of analysis typically involves at minimum a comparison of the monthly rent and estimated mortgage payment, including interest, principal, and taxes. In this comparison, you are not just looking to evaluate which expense is higher; you are looking to determine the relative affordability of each option. Ideally, your space related expenses should be roughly 10% or less of your total revenues. So if you are currently renting office space that represents 5% of your total sales and you now have an opportunity to purchase an office condo at a price and with a mortgage payment that represents 25% of your annual revenues, you need to either hold off on buying property until commercial real estate market values settle down or find another acquisition target that is more affordable.

5) Target Stable or Emergent Communities – Last but not least, you must consider the golden rule of real estate investing “location, location, location”. It is really important that you do your homework an identify neighborhoods, commercial districts, geographic areas that have relatively flat and/or upward trending market values (limited volatility in real estate prices). Some leading indicators of strong/high potential community areas are those with: increasing real estate development activity, major public infrastructure investments (i.e., roads, schools, public transit, and police station), expanding high quality commercial base (i.e., new grocery/retail, cafes/restaurants, etc.). If you choose the wrong area and market values in your chosen location drop, you run the risk of losing valuable customer traffic as well as eroding your equity interest in the property.

There you have it! There is a time to rent and a time to buy. However, before you purchase commercial property, review your business plan; consult with your accountant and an experienced commercial real estate broker to ensure you are really ready and able to make this investment. If you are, that’s great; you are well on your way to building long term assets for your business. If not, congratulations for taking this important step and remember to use the five criteria outlined above as a reference to better position your company to buy commercial real estate in the future.

ABOUT THE AUTHOR

Chinwe is the CEO & Co-Founder of FundWell. Chinwe has a strong personal interest and a professional track record devoted to helping organizations raise capital. She co-founded, capitalized, and operated a boutique consulting firm that over the last seven years has successfully raised a total of $120 million in grants, competitive loans, tax incentives, government subsidies, and owner equity financing on behalf of clients across the country. Chinwe’s consulting experience includes McKinsey & Company, where she provided financial and strategic business advisory services to Fortune 1000 company executives, and while at Monitor Company (now owned by Deloitte) she provided strategy and financial analysis for public and private sector clients, and managed a $3 billion dollar real estate account. Chinwe has a B.A. in Economics from Harvard College and is a Henry Crown Fellow of the Aspen Institute.

ABOUT FUNDWELL

FundWell (www.fundwellre.com) is an online resource that prequalifies and connects commercial real estate investors and small businesses seeking funding with a growing number of bank loans, non-bank debt funding, and other credit related financing options. FundWell delivers a 75% loan approval rate in a marketplace where they typically face a 30% approval rate. FundWell helps commercial real estate brokers increase deal flow and speeds up closings by referring their clients to prequalified lenders that will fund their real estate needs and business expansion plans. FundWell also helps real estate brokers access financing to grow their businesses. Since 2012, FundWell’s online financing marketplace and financial health information has reached over 24,000 small businesses, working in partnership with over 300 lending partners across the country that span 13 different types of loan products from conventional bank loans and SBA loans to factoring, equipment loans and commercial real estate loans. Try the FundWell Instant Loan Eligibility App at www.fundwellre.com to connect with FundWell and learn more about the financing options best suited for your business needs.

Commercial Real Estate News Roundup for Sept 17, 2014

Centre ville d'Atlanta, Géorgie, Etats-Unis

An Atlanta transit landlord goes vertical, avoiding the perils of studying the wrong thing, and Chicago’s River North celebrates its fifth decade of renewal.  Its’ all here in the Commercial Real Estate News Roundup for Sept. 17, 2014

General

Survey Finds Commercial Real Estate Executives Overwhelmingly Optimistic About Next Year, REIT.com, Sept. 12, 2014 –  Law firm asks its commercial real estate clients what the coming year will bring, explosion of exuberance results.

Commercial real estate professionals cite pension reform and taxes among Illinois’ most critical issues, REJournals, Sept. 9, 2014 – Even though the commercial real estate industry in Illinois gets pretty favorable treatment from tax set-asides like TIFs, tax cuts named near the top of critical issues in the state.

The Rise of Real Estate Tech, CityLab, Sept. 11, 2014 – Bits and bytes reach dizzying heights in Gotham.

Banks shed bad loans, but Chicago delinquencies highest in U.S., Crain’s Chicago Business, Sept. 8, 2014 – Chicago lags behind in the unwinding of troubled loans.

Office

Tech Turns Chicago Skid Row Into Top Market, BusinessWeek, Sept. 11, 2014 – Chicago’s River North renaissance since the 1970s era of post industrial blight is really something to behold.

Start-up looks to solve start-ups’ real estate problem, Baltimore Sun, Sept. 8, 2014 – Start-up starts up, stalls as it searches for office space, the turns its experience in to a solution.

Amazon files plans to build two more office towers downtown, The Seattle Times, Sept. 11, 2014 – Emerald City orders up two more downtown office towers from Amazon. No word if the free shipping option was used.

The victims of open offices are pushing back, BBC, Sept. 12, 2014 – A backlash is forming against the wall-free notions recently popularized in office layout trends. As it turns out, there’s benefit to focus and concentration.  Who knew?

Industrial

Tulsa’s available industrial space continues to decrease, Tulsa World, Sept. 9, 2014 – The 1963 Gene Pitney hit recording of Burt Bacharach’s “24 Hours From Tulsa” notwithstanding, the trip downtown is seeing a little more commercial traffic.

E-retailing Boosts Industrial Demand, National Real Estate Investor, Sept. 10, 2014 – One more bit of evidence of the seesaw where online retail’s disrupting of traditional retail means heightened warehousing and logistics demand.

Retail

How Gentrification Impacts Retail Development, GlobeSt, Sept. 12, 2014 – When the neighborhood heightens, the same old retail solutions just don’t cut it.

Broker eats up data on New York City’s ever-evolving restaurant, retail scene, Real Estate Weekly, Sept. 15, 2014  – Wherein a young man is rescued from a diplomatic career to become an expert on Manhattan’s retail property scene.

MARTA moves forward to build atop rail stations, Atlanta Business Chronicle, Sept. 15, 2014 – Air rights in Atlanta are the topic as a transit giant decides to go vertical.

Multifamily

Developers warn of multifamily glut in NJ real estate, North Jersey Record, Sept. 12, 2014 – Is New Jersey building too many apartments?  Some developers think so.

Apartments on the rise? Applications for multifamily projects jump 86 percent in Oregon, Portland Business Journal, Sept. 10, 2014 – Oregon’s residential real estate picture has lots of room for multifamily, says recent report.

Even with rising rents, apartment living dominates Omaha housing landscape, Omaha World-Herald, Sept 13, 2014 – Raising the rent in a market like Omaha isn’t the most common local trend among the secondary markets, but it sure is a welcome one for landlords.

Commercial Real Estate News Roundup for Sept. 10, 2014

Phoenix_AZ_Downtown_from_airplane

Disrupting the taxicab industry is a job that needs more elbow room, the rise of the “dirt REIT”, and Phoenix, AZ (pictured above) rises from the ashes like a…well, like a Phoenix.  It’s all here in the Commercial Real Estate News Roundup for September 10, 2014

General

Some Retirement Plans Include Private Commercial-Property Funds, WSJ, Sept. 5, 2014 – The 401(k) industry is learning that commercial real estate is an earner when equities don’t quite meet expectations.

Brokering New Ground in California Commercial Property, WSJ, Sept. 2, 2014 – The double-commission comes under scrutiny in the Golden State legislature.

 

Office

Conshohocken, Pa., an Old Steel Town, Now an Office Hub, New York Times, Sept. 2, 2014 – Renovation, restoration and new vision in Pennsylvania’s steel country leads to a white-collar boom.

Prominent L.A. developer to build unconventional office at Playa Vista, LA Times, Aug. 28, 2014 – A major shaper of the downtown Los Angeles skyline returns to the development world, plans in hand.

Uber has already outgrown its brand new offices, SF Chronicle, Sept. 4, 2014 – Taxi-industry-demolishing web application’s home offices grow too fast for their floorspace. No word if Uber drivers will haul any packed-up boxes on moving day.

Silicon Valley Offices Are Stunningly Pricey, Just Like the Workers Inside, Wired, Sept. 3, 2014 – “You have to spend money to make money,” observes everybody who ever made money. Coincidentally, spending money is a great way to lose money, but few in Silicon Valley would admit it.

 

Industrial

Shovels are turning for Twin Cities industrial projects, Minneapolis Star-Tribune, Sept. 6, 2014 – Twin Cities Metro area enjoying an industrial resurgence as projects aim to fill in the space between the 10,000 lakes.

Tesla: Envisioning the impacts on life in Nevada, Reno Gazette Journal, Sept. 6, 2014 – Big doings promised in the desert, as a 5 million square foot battery factory is planned by Tesla Motors.

 

Retail

Looking for retail, office space in downtown Mobile? Try this new tool, Alabama.com, Aug. 26, 2014 – Handy snapshot of retail space opportunities in downtown Mobile, AL.

SouthCoast malls adapt to fend off e-commerce giants, South Coast Today, Sept. 7, 2014 – Physical shoppers: they exist, they spend money, they prefer laying hands on product and they’re not all over 30. Take heart, retail sector.

Retail vacancies at five-year low, North Jersey.com, Sept. 2, 2014 – Absorption in the Garden State has driven vacancies down.

 

Multifamily

What slowdown? Phoenix, Valley cities considering a number of real estate projects, Phoenix Business Journal, Sept. 2, 2014 – The jewel in the desert, so recently marked by bustout residential developments, has picked up steam in the multifamily sector.  Booms and busts come and go, but demand remains.

Many in Seattle are taking a stand against rise of micro-apartments, Seattle Times, Aug. 28, 2014 – Dorm-style housing is enjoying a boom in Seattle, but are residents happy with what comes attached?

 

Land

Time to Buy the Farm? WSJ, Sept. 7, 2014 – Ladies and gentlemen, presenting dirt REITs.

Virginia farm real estate value increases, Hampton Roads Pilot, Sept. 2, 2014 – Tobacco and other cash crops are driving prices skyward in Virginia.

 

Download: NAR Commercial Regulatory Report

I’m not sure how I missed this, but miss it I did.  NAR’s June 2014 Commercial Regulatory Report is available for free download, containing updates and summaries of  recent NAR actions in the regulatory space, including FAA, EPA, SEC, GSA and SBA.  If any property in your portfolio involves air, ground or finance (find me one that doesn’t!) you need to check out the report.

Check it out below or download a PDF from Realtor.org

June 2014 Commercial Regulatory Report_SAS

 

Politician Cites 1031 Exchanges As…Divine Financial Advisory?

US Capitol Building

Ah, the political season.  The time when persons with sometimes monumentally odd ideas about cause and effect stand on a stump and broadcast these ideas loudly and clearly.

Well, loudly, anyway.

Meet Ben Carson.  A retired surgeon from Detroit, Carson’s political star is rising thanks to a strong showing in a recent straw poll. Riding the wave of recent notoriety brought him to a radio appearance, where an interviewer asked, in the context of Carson’s self-declared religious faith, if he had ever been “angry with God”.

Incredibly, his answer somehow included one of the real estate industry’s most venerable tax deferments and a favorite topic here at The Source: the IRS 1031 exchange.

The only other question I was given time to pose came […] when I asked Carson, who self-identifies as deeply religious, if he’s ever doubted or been angry with God.

Yes, indeed, he indicated, recounting an incident in which the Lord apparently subjected him to Job-like tortures over a problem involving residential real estate. After buying a new house, he just couldn’t unload the old one. “My house was on the market for five years. And I said, ‘I pay my tithes. I am faithful. I try to help people. So why is this happening to me?’ ” Carson told me.

“And [then] I found out about the ‘1031 Exchange’ [named for a tax code provision] where if you sell a piece of property and you make a very, very large profit on it, you don’t have to pay huge taxes on it if you can roll it over into another property of higher value.”

Carson’s story went on in this disjointed fashion, and didn’t seem particularly illuminating, except to suggest that it definitely wasn’t an ordinary crisis of faith and the Almighty must be a savvy adviser on the Internal Revenue Code.

So Where Did 1031 Exchanges Come From?

While it’s far from clear if Carson believes 1031 exchanges to be the work of a higher power than Congress, his answer provides food for thought. Given that I’ve written about 1031 so many times, I thought I might contribute some clarity on the point.

1031 exchanges first appeared as part of the Revenue Act of 1921, passed as a package of federal tax reductions by a Republican-majority Congress on November 23 of that year. Lauded by Treasury Secretary Andrew Mellon, the Act repealed a tax on wartime excess profits, reduced the top marginal rate on individuals from 73 to 58 percent and instituted a new and more easily avoided corporate tax.

Specifically for Dr. Carson’s benefit: everything Congress votes on is in the public record.  And a quick look at that 1921 Senate vote (found here) lists many luminaries, including  future President William McKinley (voted aye), Wisconsin firebrand Bob LaFollette (nay), and Delaware’s quasi-aristocratic Thomas du Pont (no vote).

The almighty, however, is not listed in the roll call.

(Photo credit: ttarasiuk)