Archive for July, 2012

Big Box Retailers Embracing Call for Sales on a Smaller Scale

Tuesday, July 31st, 2012

After decades of amassing ever-more square footage under roof, big box retailers are evolving in a new direction of getting smaller. According to Time Magazine, many big box retailers are realizing that the enormous, one-size-fits-all approach doesn’t work for all shoppers and locations. Many retailers are beginning to shrink into smaller stores, sometimes with smaller, more intimate and approachable locations within larger stores.

Industry leaders like Target and Wal-Mart are leading the way by introducing these smaller store-in-store specialty shops as well as smaller versions of their own stores in more urban locations. Target reportedly already has a deal with Apple Inc. to put several of their Apple Stores inside Target locations. In addition, they are also rolling out CityTarget stores in urban areas that are two-thirds the size of their regular stores. Wal-Mart is also beginning to put up Neighborhood Market stores in urban Southern California markets.

To read the full article from Time Magazine, click here.

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

CMBS Delinquencies Reach All-Time High

Monday, July 30th, 2012

The CMBS delinquency rate hit an all-time high of 10.36% during the month of July, marking the fifth straight month it has increased. According to the New Mexico Business Weekly, the increasing delinquency level was driven by a wave of 2007 loans that reached balloon payment dates but could not be refinanced. With the majority of these loans occurring in the first half of 2012, it is expected that the delinquency rate will begin to slow in the second half.

Hospitality, office, multi-family and industrial loans all saw an increase in delinquency rates during July, with the retail loans being the only major property type to decrease. Approximately $1.4 billion in losses occurred in July, and currently, just under $60 billion worth of loans are still delinquent. This figure excludes loans that are past their balloon date but are current on their interest payments.

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

California Businesses Paid $90 Billion in Taxes in 2011

Friday, July 27th, 2012

Businesses in California paid just under $90 billion in taxes last year, with property taxes by far being the largest contributor. According to The Orange County Register, California businesses pad $29.8 billion in property taxes, followed by $17.7 billion in sales taxes, $9.6 billion in corporate taxes, and $8 billion in income taxes passed through to owners. The $89.9 billion in taxes paid by businesses accounted for 48% of all state and local tax collections in California.

The total dollar amount of taxes paid increased 4.6% from the previous year, right on with the national average increase of 4.5%. The nationwide changes range from a 39.3% increase in North Dakota to a 0.2% decrease in North Carolina. Overall, California collects more in dollars in state and local business taxes than any other state and accounts for 14% of the nationwide total. Still though, California only ranks 13th in taxes paid as a percentage of its gross state product.

To read the full article from The Orange County Register, click here.

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

What are the Intangibles in an Operating Hotel Deal?

Thursday, July 26th, 2012

The price paid for every operating hotel includes money exchanging hands for the acquisition of intangible assets. Of course, it also includes money exchanging hands for the acquisition of real estate and tangible personal property – land, building, and FF&E. However, some renowned appraisers would have you think that that is it. The evidence for the fact that intangible assets are transacting is the terms of the Purchase and Sale Agreement (PSA).

The PSA will explicitly state that there are indeed intangible assets included in the transaction AND will explicitly state exactly what they are (i.e. all contracts, licenses, permits, and advance bookings). First and foremost among the contract category is either a management agreement and/or franchise agreement. The terms of the PSA will address whether the existing management agreement and/or franchise agreements are being assigned in the transaction, or being renegotiated.

To read the full article from Paradigm Tax Group, click here.

Posted in Hospitality, Hotels, Personal Property, Real Property | No Comments »

Retail Sales Remain Well Ahead of Last Year

Wednesday, July 25th, 2012

Consumer contributions to the economic recovery are beginning to slow as retail sales fell for the third consecutive month, a trend that has not occurred in almost four years. According to GlobeSt.com, core retail sales remain at healthy levels, 8% higher than their pre-recession peak, but the pattern of monthly declines implies a growing hesitancy on the part of consumers and correspondingly lower confidence. Consumer confidence fell 6.5 points in June to the lowest level recorded this year.

Still, even though the June retail sales of $401.5 billion represent a decline of 0.5% from May, they remain 3.8% above the same time period in 2011. The recent decline in sales from month to month can be attributed to the cooling labor market and slower wage gains reflecting a corporate bias toward caution in response to lower growth expectations and uncertainty, this according to Hessam Nahji, managing director of research and advisory services at Marcus & Millichap.

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

San Francisco Business Tax Shift Gets Key Backers

Tuesday, July 24th, 2012

San Francisco, California Mayor, Ed Lee, along with two of his rivals, have announced a compromise for the overhaul of the city’s business tax that will go before voters in November. According to the San Francisco Chronicle, the ballot measure would change how the city levies its oft-criticized business tax, which brought in $410 million last year and is the second biggest source of money for the general spending account behind the $1 billion generated from property taxes.

The plan has the backing of labor and business groups, who are often at odds over policy. The business tax shift in the city will lead to $28.5 million in new revenue that will be generated annually for the city, $13 million that will go annually to Mayor Lee’s housing trust fund for affordable housing programs, and $15.5 million of new revenue to flow to the city’s general fund for use on street paving, infrastructure and other spending.

To read the full article from the San Francisco Chronicle, click here.

Posted in Economy, Western | No Comments »

Office Vacancy Still on the Rise in Albuquerque

Monday, July 23rd, 2012

Office vacancy rates in the Albuquerque, New Mexico metro area continued to rise in the second quarter of 2012. According to New Mexico Business Weekly, the office vacancy rate hit 18.8% in the second quarter, up 0.4% from the previous quarter and 0.8% year-over year. The vacancy rate from the second quarter hasn’t been seen since the second quarter of 1989, as the market slowly recovered from a spurt of overbuilding in the 1980′s.

One of the main reasons for the increased vacancies is the crippling job losses being suffered by the area. Many companies are consolidating office space, shrinking their metro-area presences. A sustained period of job growth is the main thing that is needed before anything fundamental will change in the Albuquerque office market.

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

New York Authorizes Property Tax Exemptions for ‘Green Buildings’

Friday, July 20th, 2012

New York Governor Andrew Cuomo has approved legislation that will provide property tax incentives to the construction of energy efficient buildings by builders and homeowners. According to Riverhead LOCAL, the legislation authorizes a local government or school district by local law, ordinance, or resolution to provide a real property tax exemption for construction or improvements constructed after January 1, 2013 which meet LEED certification standards for green buildings.

The construction on the property must exceed $10,000, be certified as a green building, and be the subject of a valid building permit in order to be eligible for the exemption. Normal everyday repairs and maintenance will not qualify. The bill, which passed the Assembly and State Senate unanimously, is intended to create a cleaner environment, savings for businesses and homeowners and create incentives to build greener homes and businesses.

To read the full article from Riverhead LOCAL, click here.

Posted in Construction, Eastern, Environment, Green Initiatives, Real Property | No Comments »

Denver Business Officials Unhappy with Property Tax Proposal

Thursday, July 19th, 2012

Though Denver, Colorado Mayor Michael Hancock’s tax proposal will come with a sales-tax break, business owners claim that it will not be enough to offset the additional property taxes they will have to pay. According to The Denver Post, the proposal will make taxes higher for business and industrial properties than residential property, but does include relief in the form of a four-year moratorium on taxes typically levied on new equipment purchases, an incentive that many will receive no use from.

The proposal essentially calls for the keeping of approximately $68 million in taxes that are usually paid back to taxpayers every year under the Taxpayer’s Bill of Rights. As it stands, commercial and industrial property in the state of Colorado have an assessment rate of 29%, a number that will rise if the proposal passes, where residential properties have an assessment rate of 7.96%.

To read the full article from The Denver Post, click here.

Posted in Personal Property, Real Property, Western | No Comments »

Commercial Real Estate Industry Still Awaits CMBS Return

Wednesday, July 18th, 2012

While aware that the excess that went into the CMBS market several years ago contributed to the recent recession, commercial real estate investors are still eager to see that market get back on its feet. According to Finance & Commerce, this year, when many of those 2007 five-year term loans are coming due, the CMBS market has issued just $18 billion in new securities. By the end of 2012, no more than $35 billion will be issued, about $200 billion short of the 2007 mortgage volume that will roll in over the next few years.

Though it is widely believed that the CMBS market must make a comeback in order for there to be a recovery, the urgency for that recovery has not fully arrived yet. The main reason for that is that many of the loans written between 2005 and 2007 are being extended in hopes of recovering some of the loss in value before they are wrote off. In addition, the weak acquisition market has taken the pressure off of the lending market’s dollar capacity.

To read the full article from Finance & Commerce, click here.

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

« Older Entries