Kansas City Council Proposes a 75 Percent Property Tax Break Cap for Development Projects

Written on August 29, 2016 at 11:47 AM

A proposed Kansas City incentive reform ordinance that would place a 75 percent cap on property tax diversions, abatements or exemptions for development projects was roundly supported last week at hearing during the council's Planning, Zoning & Economic Development Committee. The ordinance was written by City Councilman Quinton Lucas in response to the increasing use of citizen petitions to fight incentives on a project-by-project basis. Some say the threat of such petitions has scared development projects away.

While details still need to be sorted out and no action on the ordinance has taken place, the measure will be taken up by the PZED Committee again this week after members have had "time to digest" input provided by 21 citizens, school superintendents, and other civic and business leaders who testified Wednesday.

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Categories: Real Property, Missouri

Student Housing Sector to See Surge in Demand

Written on August 22, 2016 at 03:35 PM

As the early results of the student housing fall leasing season roll in, the sector will continue to attract new investors and the bidding for properties will likely intensify. Occupancy rates are on track to meet or even exceed the high levels set last year as the market easily absorbs the new student housing beds that get delivered. Properties are pushing rents and still maintaining leasing velocity, which will spark a higher volume of transactions this fall despite investors already acquiring a tremendous volume of student housing properties this year. But the sector's strong fundamentals and success isn't all that surprising, as the share prices of the two student-housing REITs are soaring.

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Categories: Real Property, Multi Family, Student Housing

Cuomo Proposes Plan to Revive NYC’s 421a Program

Written on August 19, 2016 at 12:39 PM

Gov. Cuomo announced Wednesday a plan to resurrect New York City’s 421a property tax abatement program, but real estate development experts are a bit weary of the proposal. It’s been eight months since 421a expired due to a construction wage agreement not being reached between the Real Estate Board of New York and the Building Construction Trades Council of Greater New York.

Cuomo’s proposal echoed past plans for the tax break, but put forward a new wage subsidy for large projects in Brooklyn and Queens. While the plan leaves several major questions unanswered — including how the state will pay for it – it appears to be an important first step toward unions and developers reaching a resolution.

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Categories: Real Property, New York

Benefits of Investing in the Midwest Apartment Market

Written on August 17, 2016 at 04:36 PM

While the Midwest multifamily market may never experience the headline-grabbing stats that core, coastal cities do, its reliability continues to make the region an immensely attractive environment for private equity and similar investors.  Secondary and tertiary metro areas such as Cleveland, Kansas City and Indianapolis are strong, steady, and a solid bet for investment. The higher cap rates and steady rent growth found in the Midwest offer higher returns in asset values than the nation's primary markets, especially as the sector approaches affordability ceilings in places like New York and San Francisco.

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Categories: Real Property, Apartments, Indiana, Multi Family, Illinois, Missouri, Ohio

Analyst: Overcapacity, Deflation Creating 'Awful' Operating Climate for Food Retail

Written on August 15, 2016 at 12:55 PM

The current deflationary environment in food retail — particularly in the midst of an otherwise healthy economy — is a nearly unprecedented event in recent industry history and indicates an operating climate that has become "just awful," an analyst told Supermarket News (SN). Current price deflation goes beyond the farm issues affecting the price of proteins like eggs and meat, Scott Mushkin of Wolfe Research told SN in an interview. It also reflects overstored markets, changing demographics and the continued growth of nontraditional competitors such as Amazon and Blue Apron. "There are too many assets chasing too few sales due in large part to over-building and unfavorable demographics," Mushkin said. "This is leading to slack revenue growth and falling prices." The consumer price index for food at home has been negative on a year-over-year basis since December, Mushkin said, noting that it was only the third time in the last 15 years food had turned deflationary. "Those other periods of deflation [1992 and 2008-09] always coincided with the bottom of the economic cycle, when things were terrible, people were chasing after sales because demand was not there and unemployment was really high," he said. "That's the not the case this time. It's weird." 

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Categories: Real Property, Retail

San Francisco Proposes Transfer Tax Increase for Properties Over $5M

Written on August 11, 2016 at 02:46 PM

Despite previously approving transfer tax increases in 2008 and 2010, San Francisco voters will be asked again in November to raise transfer taxes on properties that sell for more than $5 million. The increase would include homes, but would mainly affect sellers of commercial property and indirectly affect buyers and tenants. The ballot measure would raise the transfer tax rate to 2.25 percent from 2 percent on properties worth $5 million to $10 million, to 2.75 from 2.5 percent on properties worth $10 million to $25 million; and to 3 percent from 2.5 percent on properties worth $25 million and up. San Francisco already collects more transfer tax revenue than any other city in California, but because revenue from the proposed increase would go into the city’s general fund, the ballot measure needs a simple majority to pass.

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Categories: Real Property, California

Philadelphia School District Program to Target ‘Undervalued Properties’ and Increase Tax Revenue

Written on August 10, 2016 at 11:16 AM

The Philadelphia School District announced Tuesday that it will begin a three-year pilot program to identify undervalued properties throughout the city in an effort to increase tax dollars. The controversial “reverse tax assessment” method has become a common practice throughout Pennsylvania, where school districts file real estate assessment appeals seeking to increase property assessments and overall tax revenue. The Philadelphia School District will seek proposals from law firms, real estate appraisers and other professionals to help identify properties that are assessed at least $1 million under their actual value and appeal those assessments. While the district says it isn’t only targeting commercial properties, it’s likely that most of the parcels affected would fit that description.

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Categories: Pennsylvania, Real Property

E-Commerce Demands Shifting East Coast Warehouse Hubs

Written on August 09, 2016 at 04:53 PM

As online retailers shift their focus to two-day and same-day package delivery, warehouse builders are beginning to redraw the map of logistics hubs on the East Coast. Historically, the area around the central Pennsylvania towns of Harrisburg and York has hosted large clusters of warehouse space because of light zoning restrictions, access to several large city population centers and ample cheap land to build on. But in the last five years warehouse development in the Lehigh Valley, which is to the north and closer to New York City, has surged, according to brokerage CBRE Inc. Over the weekend, FedEx Ground, broke ground for its largest facility in the country, an 800,000-square-foot automated distribution center in Allen Township, Pa., adding a large chunk of space to the cluster of logistics real estate in the state’s Lehigh Valley area.

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Categories: Pennsylvania, Real Property, Warehouse

Alert: City of Baltimore Engaging in "Reverse Assessment Appeals"

Written on August 08, 2016 at 12:00 PM

By Paul Shoup, Senior Managing Consultant, Washington D.C.

In the state of Maryland, properties are reassessed every three years (triennial) and assessments are phased in over the three-year cycle. Real estate assessment appeals can be filed subsequent to the issuance of a new notice of value at the beginning of a new cycle and, if successful, can impact all three years.  In addition, an appeal can be filed prior to January 1 in the 2nd and/or 3rd year of the cycle. 

The process includes a first level administrative appeal with the State Department of Assessments & Taxaztion (SDAT); followed by, if warranted, a second level appeal to Property Tax Assessment Appeals Board (PTAAB); and, if further warranted, a third level appeal to Tax Court.

In many areas across the country, some taxing jurisdictions have begun the process of filing what has become known as "reverse appeals," whereby the jurisdiction seeks an increase of a property assessment.  Working internally and with consultants, these jurisdictions will track property sales, property types (e.g. apartments), and other information to gauge potential opportunities to seek higher valuations and real estate tax revenues. It has become common practice in Pennsylvania for school districts to commence appeals against property owners seeking to increase assessments and tax revenue.

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Categories: Maryland, Real Property, Paradigm Info

JLL: Five Key Trends Shaping the U.S. Skyline

Written on August 04, 2016 at 03:23 PM

JLL recently released their mid-year update to the 2016 Skyline Report, which provides insights on office supply, demand, rents and leverage for the top-tier office market within CBDs and urban cores. According to JLL, below are five key trends that shaped the Skyline update:

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Categories: Office, Real Property