Archive for October, 2011

Connecticut Revaluations for Assessment Purposes

Monday, October 31st, 2011

Connecticut law requires all real estate to be revalued for assessment purposes every five (5) years. The following towns are conducting a revaluation for the 2011 Grand List (10/1/2011 Valuation Date):

Andover * Ashford * Beacon Falls * Bridgewater * Brookfield * Colchester * Columbia * Cornwall * Derby * East Hartford * East Haven * East Lyme * Easton * Enfield * Griswold * Groton * Hartford * Hebron * Killingworth * Ledyard * Lisbon * Manchester * Marlborough * Meriden * Middlebury * Middlefield * Milford * Montville * New Haven * Newington * North Stonington * Plainville * Plymouth * Portland * Prospect * Salem * Seymour * Shelton * Southington * Stafford * Thomaston * Trumbull * Vernon * Westbrook * West Hartford * Windham * Wolcott * Woodstock

Valuation notices will be issued in November, at which time there is a short window of opportunity to informally discuss your values with the revaluation company. Our Connecticut expert, Paul Steimle, has had a great amount of success utilizing this proactive approach to value reduction on behalf of our Clients. Otherwise, the formal deadline to file an appeal on your value is 2/20/2012.

Contact Lisa Story, at (617) 517-3100 x101 or lstory@paradigmtax.com, to take advantage of this opportunity and reap the property tax savings benefits over the next 5 years.

Posted in Eastern, Paradigm Info, Real Property | No Comments »

Trends for 2012 Hint at a Long Grind to Recovery

Friday, October 28th, 2011

A survey of commercial real estate investors reveals more caution and a dimmed outlook for the commercial real estate industry in 2012. According to the National Real Estate Investor, last year the theme was about the industry recovering, but this year, the recovery may be on hold for all of 2012. Among the challenges that are putting pressure on commercial real estate are high unemployment rates and global and domestic financial dysfunction.

The best opportunity for commercial real estate in 2012 remains in familiar places like primary markets with strong energy or tech sectors as well as the strong performing multi-family sector. The problem with everywhere else is demand. Demand remains small and no one expects it to ramp up in 2012. This means many investors are going to have to decrease expectations for appreciation through 2012 and possibly into 2013.

To read the full article from the National Real Estate Investor, click here.

Posted in Economy, Real Property | No Comments »

CMBS Issues Drove Down Retail Sales Volume in the Third Quarter

Thursday, October 27th, 2011

Troubles in the CMBS market affected sales activity as retail real estate investors turned their focus back to trophy assets in primary markets during the third quarter. According to Retail Traffic, sales of retail properties during the third quarter were down 46% to $8.2 billion from $15.2 billion in the second quarter, but the figure is still ahead of the $6.6 billion in sales closed during the same period a year ago. Overall acquisition activity appears to be trending down recently compared to the first half of the year.

The first half of the year saw greater financing availability and a positive outlook on recovery allowed investors to reach out for non-core assets like malls, shopping centers and unanchored properties in secondary and tertiary markets. However, the sudden stop of the CMBS market this summer caused investors in properties valued at more than $10 million to rethink their acquisition strategy as they are no longer able to know if they can secure funding for transactions involved in smaller markets with issues.

To read the full article from Retail Traffic, click here.

Posted in CMBS, Financial Services, Malls, Real Property, Retail, Strip Centers | No Comments »

Commercial Real Estate Players Expect Slow Recovery in 2012

Wednesday, October 26th, 2011

Experts in commercial real estate are expecting a slowdown in the industry’s recovery, but investors are still chasing after choice properties in the nation’s busiest cities. According to the Los Angeles Times, a survey of developers, brokers, architects and other property professionals said that a gloomy economic outlook and the absence of new jobs are weighing heavily on real estate markets. Conditions for owners have stabilized, but improvements in occupancy and rents remain elusive in some major markets.

Still, most major markets like San Francisco, Boston, Seattle and New York are expected to continue on the path or recovery due to their ability to attract highly-technical workers. The most sought after properties for investors remain those in the central business districts of Washington, New York and San Francisco and foreign investors still consider U.S. real estate a safe option to invest capital because of Europe’s financial distress and the failure of expectations in Asian markets.

To read the full article from the Los Angeles Times, click here.

Posted in Eastern, Economy, Real Property, Western | No Comments »

U.S. Commercial Property Index Rose 2.4% in August

Tuesday, October 25th, 2011

Commercial real estate prices in the U.S. rose for the fourth straight month in August, and unlike previous months, distressed properties made up only a small share of transactions. The share of distressed deals was 21.7% to be exact, the lowest total since January 2010. According to Bloomberg Businessweek, the Moody’s/REAL Commercial Property Price Index advanced 2.4% from July and its up 7.2% from a year earlier and 15% from its post-peak low in April.

Significant price gains aren’t expected in the near future as loan organizations based on CMBS slow and demand for vacant space continues to fade away. $49.8 billion of commercial property changed hands in the third quarter compared to $58.5 billion in the second quarter, leading experts to believe there is more caution among investors in general, especially those in commercial real estate.

To read the full article from Bloomberg Businessweek, click here.

Posted in CMBS, Real Property | No Comments »

Equalized Tax Rates in Cook County Increase

Monday, October 24th, 2011

Cook County recently finalized 2010 pay 2011 tax rates and, in general, tax rates increased. The budget requirements of the more than 1,500 taxing agencies in the county were higher than expected; as a result, tax rates were also higher than expected – some percentage increases are in the double-digits. For sample rates, click here.

The second half installment 2010 pay 2011 tax bills are due November 1st. Remember, once you receive the tax bills, it is too late to file an assessment appeal! Taxes in Cook County are paid in arrears so the timeframe to file assessment appeals is months before the tax bills are even finalized.

For more information, please contact John Meyer at (312) 252-0324, or jmeyer@paradigmtax.com.

Posted in Mid America, Paradigm Info, Real Property | No Comments »

Lackluster Retail Fundamentals No Cause for Concern

Friday, October 21st, 2011

Even though third quarter vacancy rates were flat and asking rents were slightly down from the previous quarter, researchers say retail fundamentals were in line with expectations over the last three months. According to Retail Traffic, in view of retail space coming online this year, the lackluster figures seemed to be due to insufficient demand for new space among retail clients. Concerns over the economy have led to retailers feeling less than confident about opening new stores.

Overall retail vacancy rates decreased 10 basis points to 7% from the second to third quarter after remaining flat for three consecutive quarters. Asking rents declined 0.5% over the same time frame to $14.65 per square foot. In spite of economic uncertainty and the fear of a double dip recession, fairly stable unemployment figures and rising retail sales serve as proof that another downturn for the sector remains only a distant possibility.

To read the full article from Retail Traffic, click here.

Posted in Economy, Real Property, Retail | No Comments »

Commercial Real Estate Deals Decline in U.S. as Rebound Cools

Thursday, October 20th, 2011

Concerns over the economy and restraints on debt financing limited deals have caused the commercial real estate market across the country to slow over the past three months. According to SFGate.com, a total of $49.8 billion of commercial property changed hands in the third quarter, down from $58.5 billion in the previous three months. The decline of 15% is the second biggest since the first quarter of 2009 and growth doesn’t look like it will accelerate as long as current conditions remain unsettled.

Commercial property demand has rebounded slightly since the end of the recession in 2009, particularly in the major markets of New York City, Washington DC and San Francisco. However, the fear of a double-dip recession has crept into the market over the past few months. Results for third quarter deals for office, hotel, industrial, apartment and retail properties were still up 39% from the same time in 2010, evidence that the recovery is just slowing and not coming to a complete stop.

To read the full article from the SFGate.com, click here.

Posted in Apartments, Eastern, Economy, Hospitality, Hotels, Multi Family, Office, Real Property, Retail, Strip Centers, Western | No Comments »

Insurers See an Opening in Commercial Mortgages

Wednesday, October 19th, 2011

Warnings of increasing risk in the future have led to weak investor interest and wary lenders in the commercial mortgage market over the past several months. However, according to The New York Times, one bright spot is emerging as life insurance companies have taken advantage of the lull to become major lenders. In fact, in the second quarter of this year, the life insurance industry underwrote $15.7 billion in new commercial mortgages - the largest volume on record since the number has been tracked. This number doubles the amount of the first quarter of the year and exceeds the previous high of the fourth quarter of 2005 by $3.2 billion.

The increase in life insurance company interest in commercial mortgage lending comes as a bit of a surprise as they are traditionally conservative, favoring high-quality borrowers and trophy properties while keeping the bulk of their loans on their balance sheets. Typically, investment banks dwarf life insurance companies in this area as they pool most of their mortgages and issued bonds against these loans. But this quarter, while the total amount of commercial mortgages increased 0.1% in the second quarter over the previous quarter, the amount held by life insurers increased 1.5%.

To read the full article from The New York Times, click here.

Posted in CMBS, Financial Services, Real Property | No Comments »

Increase in Hotel Transaction Activity is Expected

Tuesday, October 18th, 2011

Indications are that an increase in hotel transaction activity will occur over the next 24 months. Keep in mind the Transaction Price Segregation as you complete your due diligence checklist. The TPS is used to manage your transfer and real estate taxes on acquisitions.

The advantages of employing TPS as a methodology of valuation are as follows:

Qualified property tax due diligence
Reduced real estate tax exposure
Reduced transfer/recordation tax liability
Refund of realty transfer tax when total sales price is recorded
Reduced cost on property tax litigation/appeals
Tangible personal property inventory and fixes asset reconciliations

For more information, please contact Sharif Mitchell at (646) 416-7893 or smithcell@paradigmtax.com.

Posted in Hospitality, Hotels, Paradigm Info, Real Property | No Comments »

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