Archive for November, 2011

Strong 2012 Forecasted for Rebounding Industrial Sector

Wednesday, November 30th, 2011

While uneven, the recovery of the industrial real estate sector has slowly begun throughout 2011 and experts expect growth to continue into 2012 and beyond. According to the National Real Estate Investor, larger distribution centers are experiencing the most growth while outlying markets continue to have high vacancy rates and are drawing less interest. The quality of product available to investors has been hit or miss, but over the course of the year, there has definitely been a lot more of it.

Volumes of industrial acquisitions were up year over year with the third quarter of 2011 alone showing $17.8 billion in industrial properties changing hands, a 65% increase over the same time in 2010. Initial fears of a let up in activity for 2012 have been reversed as there are a lot of sellers coming to the market and a lot of buyers keeping things extremely active. Overall, large institutional investors are remaining in primary markets where value-add investors and private equity firms are dipping into second-tier markets.

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

Posted in Distribution Centers, Economy, Industrial, Personal Property, Real Property, Warehouse | No Comments »

$1.6 Billion Shaved off Michigan Property Tax Bills

Tuesday, November 29th, 2011

Property owners in the state of Michigan have seen property taxes fall nearly $900 million between 2007 and 2010, amounting to a reduction of $1.6 billion when adjusted for inflation. According to Bridge Michigan, though many have not recognized the benefits, these “Shadow Cuts” have eased the burden on residents and businesses in recent years. Property tax revenues overall in the state have fallen $880.3 million between 2007 and 2010, a 6% decline.

From the standpoint of businesses specifically, $324 million of tax cuts have been provided in the commercial, industrial, and utility sectors. The business taxes came at a time when business lobbying groups were pushing for elimination of the state personal property tax, which raises about $1.2 billion a year, mostly for local governments and schools.

To read the full article from Bridge Michigan, click here.

Posted in Economy, Mid America | No Comments »

Growth in Commercial Real Estate Markets Expected in 2012

Monday, November 28th, 2011

Commercial real estate markets have been relatively even in 2011, but according to the National Association of Realtors, improving fundamentals could mean a more positive trend in 2012. The market is expected to follow along the same lines as the economy as vacancy rates should trend lower and rents should experience a modest rise in the coming year. Overall, from the fourth quarter of this year to the fourth quarter of 2012, vacancies are forecasted to decline 0.6% in office, 0.4% in industrial, 0.8% in retail, and 0.7% in multi-family.

One factor that is contributing to the projected decrease in vacancies is that construction activity remains low, with the majority of the industry claiming that it is a buyers’ market in terms of development acquisitions. Prices at the moment are below construction costs in 83% of the markets across the nation.

To read the full article from Bloomberg, click here.

Posted in Economy, Industrial, Multi Family, Office, Real Property, Retail | No Comments »

Traditional Lenders Continue to Finance Retail

Wednesday, November 23rd, 2011

The retail industry was one of the more favored targets for lending in the third quarter as banks and life insurance companies increased their efforts towards commercial properties. According to Retail Traffic, loan organizations for retail properties increased 37% between the second and third quarters in 2011, and the average loan size on retail assets also went up to $20.9 million from $15 million in the first quarter.

The increase in lending for retail points to the fact that traditional lenders still have an appetite for retail properties, but prefer that they feature good credit anchor tenants, long-term leases, and good locations. Life insurance companies are the most picky when it comes to location as they will only lend to properties featured in the top 50 markets in the country. Where life insurance companies accounted for 26% of all originations for commercial property in Washington DC and 14% in Manhattan, they only accounted for no more than 10% in tertiary cities across the country.

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

Posted in Big Box, Eastern, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »

Taxing Jurisdiction-Filed Real Property Tax Appeals in Pennsylvania

Tuesday, November 22nd, 2011

Pennsylvania is one of few states that recognizes the right of the taxing jurisdiction to initiate a real property tax assessment appeal on any tax parcel it sees fit. According to the Institute for Professionals in Taxation (IPT) in their November 2011 tax report, this statutory right has been in existence for several years but was just recently reincorporated in the Consolidated County Assessment Code, effective January 1, 2011.

Essentially the code allows for the “cherry picking” of tax parcels for appeal by the taxing jurisdiction. Taxpayer attempts to have the practice revoked and declared “contrary to requirements of uniformity and equal protection” have been denied by appeals courts. As a result, in recent years the number of assessment appeals initiated by taxing jurisdictions has increased significantly, leaving taxpayers frustrated due to the lengthy and expensive assessment appeals process.

Posted in Eastern, Real Property | No Comments »

Bay Area Governments Expand the Use of Transfer Taxes

Monday, November 21st, 2011

Bay Area counties are beginning to apply transfer taxes, or monies drawn by local governments when deeds for real property are transferred by sale or other transaction, to business entity transfers that include real property. Until now, the real property attached to the sale of a business that is transferred during the sale was not included under the transfer tax law. Now, Bay Area counties are rewriting their ordinances to include these transfers of real property.

According to the National Real Estate Investor, tax collection records indicate that the move is working and that transfer tax receipts are rising across the California Bay Area-region, including San Francisco, Oakland and Clara County. The amendments to these three Bay Area jurisdictions’ laws were intended, at least in part, to close a perceived loophole in the transfer tax and thereby increase the amount of tax collected.

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

Posted in Western | No Comments »

Slight Growth in Commercial and Industrial Construction for 2012

Friday, November 18th, 2011

The Associated Builders and Contractors (ABC) recent analysis of construction trends indicates that 2012 will see slight but gradual progress in the U.S. commercial and industrial construction industry. According to Virginia Business, construction spending is expected to grow 2.4% in 2012 following a 2.4% decrease in 2011. Commercial construction employment is also expected to increase by 0.4% in 2012 following 0.6% growth in 2011.

Along with the increase in spending expected in 2012, there should also be an improvement of privately financed construction as economic conditions gradually improve and lending institutions become more comfortable lending to investors. With stimulus-funded projects steadily declining, the commercial construction sector will become increasingly dependent on privately funded projects for growth.

To read the full article from Virginia Business, click here.

Posted in Economy, Real Property | No Comments »

Key Indicators of Hospitality Health Registering Solid Gains

Thursday, November 17th, 2011

Paradigm Tax Group recently sponsored and presented at the iGlobal Hospitality & Lodging Investment Summit 2011 in New York City. The one-day event provided a snapshot of the current health and future outlook for the global hospitality industry. Through a series of focused panel discussions, the event examined emerging trends and opportunities, along with the costs, benefits, risks and rewards of hospitality investments now and into the foreseeable future.

The general outlook from the Summit regarding the hospitality industry was optimistic. However, that optimism was met with a few concerns regarding both the US and European economies. Overall, the feeling was that there are good opportunities in the market if some level of economic growth can be established. Hotel deals appear to be back in the spotlight as several key indicators of hospitality health are registering solid gains.

To read the full summary on the iGlobal Hospitality & Lodging Investment Summit 2011 from Paradigm Tax Group, click here.

Posted in Country Clubs, Eastern, Golf Courses, Hospitality, Hotels, Paradigm Info, Real Property, Resorts | No Comments »

Student Housing Has a Strong Foundation

Wednesday, November 16th, 2011

The student housing sub-sector of the red hot multi-family real estate industry is attracting several developers and investors for reasons different than those of its parent. According to GlobeSt.com, the main reason for the success in student housing is the sheer number of kids going to college is increasing steadily due to the fact that there are more kids turning 18 than ever before. One issue still remains though in the form of universities facing budget issues, leading to difficulties in raising capital to renovate or build new facilities on campus.

Universities are now beginning to try a number of solutions to improve student housing such as public-private partnerships between developers, and turning to off-campus housing that’s close by to house students. Developers are beginning to notice and are taking action by building in urban and suburban environments. These new developments don’t require the regular design features of a normal multi-family building and that money can be used elsewhere in the form of amenities such as pools, games rooms and study lounges.

Posted in Multi Family, Real Property, Student Housing | No Comments »

Pontiac, MI Property Taxes May Go Up in December

Tuesday, November 15th, 2011

Pontiac, Michigan Emergency Manager Lou Schimmel has been forced to raise property taxes in order to pay bills the city cannot afford. According to mlive.com, potential and current lawsuits over a $1.9 million property tax refund to General Motors, and more than $4 million owed to the police and fire pension and voluntary employee benefit association, will likely cause property taxes to rise.

Schimmel is not necessarily raising property taxes as he does not have the authority to do so. He is basically using the money he will get in return for higher property taxes to pay these bills the city simply is unable to afford, bills that should have been paid off under normal circumstances. Property taxes in the area are down 21.4% this fiscal year and tax valuations are expected to drop another 14% next year.

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

Posted in Economy, Mid America | No Comments »

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