NYC Department of Finance Publishes 2014 Tentative Assessment Roll

Written on January 25, 2013 at 07:13 AM

For real estate property tax purposes, New York City reviews all properties on an annual basis. In doing so, last week the City released its 2013-2014 property valuations for both commercial and residential properties. The bottom line - Citywide market values have increased by 4.26% and have reached a total market value of $874 Billion - that’s an overall increase of $35.7 Billion. Department of Finance Commissioner David M. Frankel cites market forces for contributing to 3.2% of the overall value increases with the remaining increases attributed to new construction and physical improvements.

For Class 2 properties, which consist of coops, condos and rental apartment buildings, the total market value rose 4.8% citywide to $204.6 Billion. State law prohibits the Department of Finance from using sales prices to value condos and coops, so instead they are required to be valued as if they were rental buildings. This valuation methodology can be very subjective and often generates numerous assessment errors within the class 2 properties.

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Categories: Real Property, Paradigm Info, New York, Economy

Manhattan Commercial Property Values Damaged by Sandy

Written on January 24, 2013 at 06:42 AM

New York-area real estate executives are expressing pessimism about the current state and future of the commercial real estate market in Manhattan. According to MarketWire, the majority of real estate executives say Hurricane Sandy has hurt commercial real estate property values in lower Manhattan, with some even expressing that values have been permanently lowered. As a result, many think that landlords in the area will be forced to lower rents and offer incentives in order to retain tenants.

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Categories: Real Property, Environment, New York, Economy

Maryland Tax Credit Bill Aims to Spur Commercial Development

Written on January 23, 2013 at 06:41 AM

A new bill introduced by the General Assembly would allow commercial real estate developers in Maryland to claim state income tax credit for their projects. According to the Baltimore Business Journal, Senate Bill 138, the "Build Maryland Tax Credit Act," authorizes at least $4 million a year in tax credits and comes at the same time Governor O'Malley wants to launch a new $3 million tax credit for cyber security companies, and increase tax credits for other tech firms.

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Categories: Maryland, Construction, Real Property, Economy

Transaction Price Segregation vs. Purchase Price Allocation for Hotel Transactions

Written on January 22, 2013 at 04:38 AM

When buying an operating hotel, the real estate portion of the transaction is affected through recording a deed. In most states, a real estate transfer tax is imposed on the “price” paid for the real estate. Because hotels transact as operating real estate, it becomes necessary to separate the value or “price” of the non-real estate assets such as furniture, fixtures, and equipment, and intangibles such as management agreements, franchise agreements, contracts, licenses, etc. This is where the benefits of the Transaction Price Segregation (TPS) Model come into play.

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Categories: Personal Property, Real Property, Hospitality, Paradigm Info, Hotels

Texas Schools Need More Funding, May Lead to Increased Values

Written on January 21, 2013 at 09:35 AM

Texas schools will run out of money unless legislators can come up with an additional $1 billion before the summer. The need for additional funding is expected to put more pressure on appraisal districts to raise property values as well as tax rates in certain school districts. According to the San Antonio-Express News, the funding is mainly needed to help school districts make their July expense payments and avoid any further delays in getting the budget straightened out.

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Categories: Real Property, Texas, Economy

U.S. Hotel Transactions Down 35% in 2012

Written on January 18, 2013 at 05:39 AM

Relevant data analyzed to date shows that the transaction market in 2012 slowed down considerably from the year prior. According to the Baltimore Business Journal, U.S. hotel transactions fell to about $12.5 billion in 2012, down from $19.4 billion in asset trades in 2011. Despite the slow-down, pricing still remained strong, and transaction activity is expected to rise again in 2013.

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Categories: Real Property, Hospitality, Hotels, Economy

Easing Property Tax Burden for Texas Businesses

Written on January 17, 2013 at 06:35 AM

The Texas Taxpayers and Research Association is working on easing the property taxes levied on businesses by the state's school districts, counties, cities and special-purpose taxing units. According to the Austin Business Journal, the Association is trying to reauthorize Chapter 313 of the state's tax code which was created by the Texas Economic Development Act as a response to Texas losing several major new industrial projects to other states as a result of the state's high property tax burden.

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Categories: Personal Property, Real Property, Texas, Economy

Washington, DC Commercial Activity Won't Excite in Early 2013

Written on January 16, 2013 at 07:06 AM

As the final bow is being put on the 2012 Washington, DC commercial real estate market, the focus turns to 2013, and the outlook is pretty unexciting. According to The Washington Post, this should not come as a surprise as the debt ceiling continues to be a threat, sequestration remains on the tips of everyone's tongues and there is little hope of expansion for most government agencies, law firms and other major office tenants in the area.

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Categories: Real Property, District of Columbia, Economy

Distressed Hotel Deals Still Abound Despite Recovery

Written on January 15, 2013 at 06:07 AM

Distressed hotel deals are still very prevalent despite the strides towards recovery the market has recently experienced. According to HotelNewsNow.com, brokers, buyers and bank officials all said plenty of opportunities are ripe for the picking today, depending on the property and particular market. This current market may be the ideal time for many lenders to monetize assets as they are seeing diminishing returns for assets held too long.

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Categories: Real Property, Hospitality, Hotels, Economy

Data Centers Making Strides towards Energy Efficiency

Written on January 14, 2013 at 06:50 AM

Industry professionals are starting to succeed in creating greener data centers in hopes of turning around their reputation as energy hogs. According to the National Real Estate Investor, U.S. Green Building Council's fourth version of Leadership in Energy and Environmental Design (LEED) includes data centers, a step that shows effort in removing the barriers to allow even more data facilities to participate in LEED and build sustainability.

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Categories: Personal Property, Office, Industrial, Real Property, Environment, Pollution Control, Green Initiatives

Allegheny County Assessment Appeals Could Be Coming in 2013

Written on January 11, 2013 at 06:27 AM

Allegheny County, Pennsylvania Executive Rich Fitzgerald has proposed a one-time change to the administrative code to give property owners a chance to challenge their new assessments in 2013. According to the Pittsburgh Post-Gazette, the proposed legislation would allow property owners, and taxing bodies, to appeal new real estate values. Those assessments would be used to calculate 2013 property taxes levied by the county, school districts and municipalities.

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Categories: Pennsylvania, Real Property, Economy

Indianapolis Commercial Real Estate Could See a Strong Year

Written on January 10, 2013 at 06:46 AM

Whether commercial real estate in Indianapolis has a breakout year or not depends on Congress and the President settling their differences on federal taxes and the budget. According to INDYSTAR.com, if commercial real estate in Indianapolis is to see any improvements in 2013, a clear outlook on taxes and the budget is critical.

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Categories: Office, Industrial, Real Property, Retail, Indiana, Economy

For Fifth Consecutive Quarter, U.S. Malls See Decline in Vacancies

Written on January 09, 2013 at 05:48 AM

After a year of slight improvements in regional mall vacancies and rents, the trend is likely to continue in 2013. According to Reis Inc, vacancies declined and rents rose in the fourth quarter at large regional U.S. malls, which continued to fare better than smaller strip centers burdened by a weak economy and an oversupply of space. Still, real, substantial improvement will not be seen until the economy and labor market pick up and create demand for more retail space.

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Categories: Real Property, Retail, Malls, Economy

Boston's Taxable Value Increases as Real Estate Stabilizes

Written on January 08, 2013 at 05:48 AM

While the economy slowly but surely continues to improve, Boston, Massachusetts' 2013 taxable property values increased by 4.2%, more than double the growth of 2012. According to the Boston Business Journal, the changes on residential tax bills will be reflected in the city's third quarter tax bills that were mailed in late December. The total taxable value in Boston is now $92.2 billion. For 2013, residential value increased $2.6 billion while commercial property values increased $1.1 billion.

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Categories: Real Property, Massachusetts, Economy

Office Vacancy Rates Remain Stubbornly High

Written on January 07, 2013 at 09:21 AM

With office vacancies always being a good indicator of whether businesses are growing and feeling comfortable, recent results don't bode well for the industry. According to The Slant, fourth-quarter numbers from Reis, a commercial real estate research firm, show the vacancy rate of offices across the country fairly high at 17.1%. While it is down from the 2012 Q4 peak of 17.6%, it is hardly much improved and nowhere near pre-recession levels.

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Categories: Office, Real Property, Economy

Is More Upside Expected in San Francisco Commercial Real Estate?

Written on January 04, 2013 at 05:50 AM

2012 was a year of across-the-board positive fundamentals for the San Francisco, California commercial real estate market. Looking forward to 2013, the dramatic climb is not expected to continue at its current pace, but there are no signs of any sort of crash either. According to the San Francisco Business Times, most downtown analysts expect rents to continue to trend upward, but at a much slower rate than in the past two years, and sales velocity is likely to follow suit.

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Categories: Real Property, New York, California, Economy

California Could Switch Proposition 13 Tax Burden to Businesses

Written on January 03, 2013 at 10:03 AM

Democrats in Sacramento, California are leading a charge to change Proposition 13, which has kept commercial and residential property taxes extremely low by only reassessing values when the property is sold. According to Curbed Los Angeles, a number of potential changes are floating around, including plans to introduce a bill this year to create a "split roll", treating commercial and residential property taxes differently. The proposal wouldn't change residential property taxes but reassess commercial property values, and thus taxes, either annually or semiannually.

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Categories: Real Property, California

North Carolina Court of Appeals Ruling Impacts Complex Valuation

Written on January 02, 2013 at 07:27 AM

At its August Hearing, the North Carolina Court of Appeals reversed the third Property Tax Commission (“PTC”) final decision and remanded the case back to the PTC reducing the assessment of IBM’s property to the value listed by the taxpayer. The North Carolina Court of Appeals has previously ruled in IBM’s favor and remanded the cases back to the PTC. This third ruling not only leads to an over $5.2 million refund, but it also has implications for the valuation of complex personal property throughout North Carolina.

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Categories: Personal Property, North Carolina, Industrial & Manufacturing

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