Sen. Paul Bettencourt, R-Houston, filed a bill Tuesday that aims to reduce the tax burden on property owners, but many Central Texas city leaders are rallying against the legislation in fear of losing revenue needed for their growing cities. Senate Bill 2 would require cities and counties to ask for voter approval for any annual property tax hike of 4 percent or greater. The bill would not affect school district taxes.
While senior housing continues to post strong returns and outperform other asset classes, the sector still couldn’t shake a few investor jitters. Senior housing posted total returns at 16.1 percent, 17 percent, and 15.3 percent over one-, three- and five-year periods, respectively, according to the recently released CBRE Seniors Housing & Care Investor Survey. Those totals are more than any other asset class for each period. However, there was a significant decrease in investor interest in the property type for the first half of 2016, following a broader pattern of CRE investor jitters.
In an effort to keep up with e-commerce distribution demands, developers in New Jersey and Long Island are repurposing vacant suburban office buildings into warehouses. While this conversion seems backwards, as office space costs more to build and usually generates higher rents, the red-hot warehouse market driven by the rise of e-commerce has changed that. Though the numbers are small, several suburban office properties in or near New Jersey and Long Island industrial neighborhoods have been redeveloped as warehouses. Industrial values continue to rise, making the conversion worthwhile for developers.
Last week, Gov. Andrew Cuomo, the Real Estate Board of New York and city construction unions were finally able to reach an agreement over a bill that would renew New York City's 421-a property tax abatement program, which is now being reviewed in Albany for approval. However, the state legislature will see two more bills regarding the controversial program, which are aimed at enforcing more stringent monitoring and compliance of 421-a projects.
The 421-a program is designed to encourage rental development in New York City by exempting developers from paying city property taxes for decades in exchange for enrolling up to 30% of the apartments in the city's affordable-housing program. The program, which began in 1971, expired last January 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.
The sweeping Food Safety Modernization Act regulations —originally enacted in 2011 and finalized this year—are going to present some challenges to food manufacturers as they take effect. “The law fundamentally shifts the food safety paradigm from reacting to adulterated food after it reaches the marketplace, to preventing contaminated food from reaching consumers in the first place,” Cushman and Wakefield head of industrial research in the America Jason Tolliver told Bisnow. “This affects every link in the food supply chain, from farm to fork and requires a lot of documentation that heretofore hasn’t been required.” To comply with the new regulations, manufacturers will need to ramp up their use of supply optimization software to manage new record-keeping processes and make some property design changes.
For some time now, the industry has been mulling when the commercial real estate cycle’s historically-long recovery will end and an economic downturn will begin. By the end of 2018, the economic model created by research firm CoStar Portfolio Strategy predicts an 80 percent chance of a recession, says Rene Circ, director of research at CoStar Portfolio Strategy. Circ points to variables, such as the unemployment rate nearing full employment and business investments down, that are flattening the yield curve and pointing to a recession. Circ also cautions that the Federal Reserve raising interest rates will be a negative to the yield curve. Although the next recession is expected to be milder, the National Real Estate Investor took a look at what asset types are better positioned than others to weather an economic downturn.
The city of Chicago has a reached a new high for number of tower cranes in the sky. Related Midwest’s recently installed tower crane at its new Streeterville apartment building became the 33rd tower crane to go up in 2016 in Chicago, according to city officials, a post-recession record and eight more than last year. It is the 48th tower crane to operate in Chicago during 2016 – 31 more than the city saw in 2011. There are 29 tower cranes currently operating on construction sites in the city with seven more approved and pending installation.
After years of success and growing occupancy and revenue per available room (RevPAR), the hospitality industry is starting to face some challenges. Occupancy levels reached a 30-year high of 65.5 percent in 2015 and gave the industry a gain of 1.7 percent. But if current trends continue, the percent change in occupancy could slip into negative territory for the first time since the recession, according to research from PwC’s Hospitality Directions US. Occupancy levels are not the hotel industry’s only success metric, but even as observers look beyond the surface, they find other reasons for concern. PwC expects that for 2016 the average daily rate growth, which drives RevPAR, will be 3.1 percent, half the level from the previous year.
Some South Carolina House members are taking a comprehensive review of the state's tax laws, and are considering phasing out sales tax exemptions, reducing the top state income tax rate, and making property tax changes. Most on the 14 members of the panel meeting Tuesday agreed changes need to be made. The 2017 session of the General Assembly begins in January.
As tech job growth continues at a rapid pace, it’s beginning to transform smaller cities such as Phoenix and Austin, Texas into top office markets as tenants seek lower rents, less expensive labor, and a lower cost of living for employees than major tech powerhouses like San Francisco and Silicon Valley.
San Francisco saw a 47 percent jump in its high-tech job base from 2013 to 2015, to almost 70,000 workers, according to a recent report by CBRE. In Phoenix, high-tech job growth was 45 percent from 2013 to 2015, to almost 50,000 workers. Both Austin and Charlotte, N.C., had jumps in high-tech jobs of about 33 percent in that timeframe. The tech sector has grown to account for one-fifth of all office leasing today, says Colin Yasukochi, director of research and analysis at CBRE. The 30 top tech markets all saw office job growth of more than 16 percent, outpacing the national average of 13.7 percent.