Welcome to Paradigm Tax Group's Industry News PageThis page is designed to provide current news and industry articles that impact property taxes across the nation. Scroll down the right side column to select news related to a specific industry segment (i.e. Real Property, Personal Property).
February 3rd, 2012
Proposals to slash commercial property values by 40% in Iowa in order to lower property taxes are being met with great resistance from advocates of local governments. According to the DesMoinesRegister.com, sources say that the proposal to cut property taxes that currently sits at the top of Iowa Governor Terry Branstad’s legislative agenda would almost certainly lead to cuts in police and fire protection, libraries, and road maintenance and safety inspections.
Branstad’s proposal would cut the taxable value of commercial, industrial and railroad properties by 40% over eight years. In addition, the bill would limit how much local governments could use taxes to increase their budgets, while at the same time giving cities, counties and school districts as much as $240 million annually to help offset revenue losses. That assistance would come from Iowa’s state treasury, which is funded mainly by the income tax.
To read the full article from the DesMoinesRegister.com, click here.
Posted in Mid America, Real Property | No Comments »
February 2nd, 2012
The recent elimination of California redevelopment agencies should cause a large amount of Bay Area properties to hit the market in the upcoming months. According to the San Francisco Business Times, the potential of dozens of properties hitting the market could provide opportunities for private landowners and developers to snap up sites at potentially fire sale prices. The downside is that years of city work on development proposals and millions of tax dollars could go to waste.
Some redevelopment sites could still likely move forward as successor agencies are still able to take on projects that have enforceable obligations. However, these agencies still have to answer to an oversight committee made up of public officials such as county and school board members who have to answer to the California State Controller.
To read the full article from the San Francisco Business Times, click here.
Posted in Real Property, Western | No Comments »
February 1st, 2012
New York City Real Estate Assessment notices have now been published and delivered. This is a friendly reminder that the deadline to appeal your assessment is March 1, 2012.
Paradigm Tax Group is currently in the process of reviewing financials for our Clients as well as performing workups and budgets for the 2012 tax year in preparation for that upcoming March 1st appeal deadline. If you have property in New York City that you would like reviewed for property tax savings opportunities, now is the perfect time to speak with us. Please note if you miss the March 1st deadline, you will not have another opportunity to appeal until the following year.
Please don’t hesitate to contact Paradigm Tax Group for more information. To learn more about Paradigm Tax Group and our New York City office, click here.
Posted in Eastern, Real Property | No Comments »
January 31st, 2012
Private equity firms are in a prime position to become the next big investors in the senior living segment of multi-family. According to the National Real Estate Investor, private equity groups are looking for places to put their money to work amid poor economic conditions and a rather lackluster commercial real estate market. Investors are drawn to the market due to the sheer volume of seniors who might need special housing, in addition to current occupancies rising and the lack of new construction under way.
The main concern to an all-in approach for private equity investors on the senior living market is the fact that many of the large portfolios have recently been traded. With a shortage of these deals on the table, investors will look towards individual assets to assemble a portfolio. Many believe the best bet is to look at underserved markets, underperforming properties and creative approaches like buying non-profit assets and converting them to for-profit entities.
To read the full article from the National Real Estate Investor, click here.
Posted in Financial Services, Multi Family, Real Property, Senior Living, Special Services | No Comments »
January 30th, 2012
Retailers who continue to use the same strategies and fail to make adjustments are the ones that will continue to struggle with current economic and market conditions. According to GlobeSt.com, many retailers are continuing to perform poorly, but decreased storefront sales don’t necessarily translate to store closures. These days it is normal for retailers to look at culling poor-performing stores via closures or the downsizing of their footprints square footage.
Downsizing can create both opportunities and problems for landlords. Looking forward, landlords need to be thinking proactively about their portfolios moving into 2012 and try to anticipate where their retailer issues might be. The main factors going into the decision of whether or not to close are the market, quality of the property, and location. When it comes down to it, struggling stores located in tougher locations are the ones most likely to close.
To read the full article from GlobeSt.com, click here.
Posted in Economy, Real Property, Retail | No Comments »
January 27th, 2012
US commercial property sales, led by retail and apartments, rose 57% in 2011 to more than $220 billion. According to a report by Real Capital Analytics, more than 14,700 properties, each worth at least $2.5 million, changed hands in 2011. Retail transactions rose 91% from 2010 to $42.4 billion, and sales of low-rise apartments rose 70% to $34.5 billion. By itself, Manhattan accounted for 12% of the total deal volume.
Sales increased as investors went after higher yields from successful real estate properties and debt-laden owners ridded themselves of properties acquired before the recession. The second half saw the frequency of deals slow down as turmoil in the market for CMBS curbed financing. Office properties and hotels in particular fell in the fourth quarter of 2011 after two quarters of significant year-over-year gains. Buyers have started to broaden their horizons both geographically and by property type.
Posted in CMBS, Eastern, Economy, Financial Services, Real Property | No Comments »
January 26th, 2012
Are you planning on buying or selling a hotel? Have you addressed the sales tax implications of the transaction? During the hectic activity that accompanies the purchase of a business, buyers and sellers frequently overlook two sales tax issues that can arise when a transaction is structured as an asset sale. For specific transactions, the statutes and regulations of the jurisdiction where the transaction will take place must be consulted to provide guidance for your particular transaction.
First, is sales tax due on any of the assets that are being purchased? In most states the sales tax is applied to all sales of tangible personal property unless a specific exemption applies to the sale. Second, is the purchaser subject to liability for the seller’s outstanding sales tax due as a successor to the business? Most states have a provision whereby the state taxing authority can collect a seller’s outstanding tax liability from the purchaser in an asset sale.
To read more from Paradigm Tax Group on the two sales tax issues that can arise when a transaction is structured as an asset sale, click here. For more information, contact Holly Unck at (602) 427-4059 or hunck@paradigmtax.com.
Posted in Hospitality, Hotels, Real Property | No Comments »
January 25th, 2012
Reality is starting to set in for those who have borrowed or lent the billions of dollars in commercial real estate loans made five years ago that are now coming due. According to The New York Times, experts have warned of a rash of recapitalizations, refinancing, and building sales. In New York City alone, nearly $70 billion worth of commercial mortgages that were bundled together and issued as collateral for bonds are maturing this year. $26 billion of those are five-year loans that were originated during the height of the real estate bubble.
Because many of the loans were created when property values were much higher than they currently are, it will be difficult to achieve reasonable refinancing. In addition, most large CMBS typically require a much larger payment upon maturity as they are not self-amortizing. The economy has also caused the pool of lenders to shrink, and the market for CMBS to remain relatively small.
To read the full article from The New York Times, click here.
Posted in CMBS, Eastern, Economy, Financial Services, Real Property | No Comments »
January 24th, 2012
It is becomes increasingly difficult for commercial property owners to find funding to make necessary improvements in order to retain or enhance their property’s value. However, according to BusinessExcellence, cost segregation studies provide property owners an opportunity to write off depreciation of building assets over a shorter period than the 39-year depreciation period that’s typical for real property assets in the United States. This in turn can lead to larger tax reductions, allowing the saved expenses to be used for improvements.
This approach itemizes assets of a property as either real (i.e. the structure of the building) or personal (i.e. non-structural improvements) assets. By keeping the shorter life expectancy personal property assets separate, it is possible to claim a greater rate of depreciation over a shorter period of time. Cost segregation can be applied to several commercial property types, including apartments, grocery stores and office buildings to name a few.
To read the full article from BusinessExcellence, click here.
Posted in Economy, Personal Property, Real Property | No Comments »
January 23rd, 2012
In the recent Hotel Sales Survey by LW Hospitality Advisors, 130 single-asset sales of more than $10 million in 2011 showed that the dollar volume of U.S. hotel transactions is gaining speed. According to HotelNewsNow.com, the deals totaled approximately $8.9 billion and compromised about 41,000 rooms. In comparison, the 2010 Hotel Sales Survey identified 84 transactions of the same criteria totaling only a little more than $5 billion and 24,000 rooms.
With enormous amounts of debt coming due in the next couple of years, it is predicted that this level of activity will continue. Once the economy further stabilizes, there will be an influx of pent-up demand on behalf of the buyers and sellers. Transactions should range from large headline deals, to lower-priced transactions, as many are saying that the smart money is discovering great opportunities in the secondary and tertiary markets.
To read the full article from HotelNewsNow.com, click here.
Posted in Economy, Hospitality, Hotels, Real Property | No Comments »
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