A newly formed group of farmers and ranchers, tentatively called Nebraskans for Tax Reform, are seeking signatures on a petition that will ask the governor to call a special legislative session, as early as this year, to address high property taxes on ag land. Unhappy with the state's lack of progress in reducing the sharply higher property taxes on farmland and ranch land, the group was organized by Rod Holl man, a Martell-area farmer and president of the Nebraska Farm Bureau chapter in Lancaster County. In addition to a meeting with Gov. Pete Ricketts to express their concerns, the group is also seeking signatures on a second letter, asking state legislators to make property tax relief their top priority.
Hundreds of Tucson-area homeowners were caught off guard this year, as the Pima County assessor targeted people who rent their houses, guesthouses or condos as short-term or vacation rental properties for profit and reclassified those properties as commercial. County Assessor Bill Staples says state law defines transient lodging establishments as those that rent for less than 30 days at a time. Because vacation rentals and short-term rentals meet this criteria, the properties were reclassified as commercial, and thus has their property tax payment ratio increased from 10 percent for residential to 18 percent for commercial. The assessor reclassified 235 local properties, using popular vacation-rental websites like AirBnb and HomeAway, but is likely only a a fraction of the number of residential properties rented short term in the region.
It's well-known that millennials are flocking to urban cores across the country, causing developers to rush downtown in order to meet the growing demand. Midwest cities are gaining just as much attention, and brokers say it's not just young people that are moving downtown. Consumers of all ages want to live where they can walk to public transportation, grocery stores, shops and restaurants, and the Midwest has plenty of thriving cities to meet those needs. Downtown Chicago, of course, is thriving. But Cleveland, Omaha, Nashville, Minneapolis/St. Paul and Kansas City are all booming, and there’s even a resurgence happening in downtown Detroit. However, one Midwest downtown seems to be leading them all: Louisville.
On Monday, the City of Austin filed a lawsuit challenging Texas' property appraisal system, arguing it is unconstitutional because it has allowed properties to be assigned “arbitrary and unreasonable” values that are below their market values and creates “an imbalance in the tax burdens between residential and commercial property owners.” The lawsuit, which follows a petition filed by the Austin City Council in June challenging the Travis Central Appraisal District’s valuation of commercial properties and vacant land, also asks a District Court to order the TCAD to redo those properties’ 2015 appraisals.
As the Affordable Care Act (ACA) has added more than 16 million new patients to the health care system and brought out more stringent rules for providers, it has pushed many independent physicians to partner with larger organizations. Because the majority of health care services provided today are done in outpatient facilities, and millions of Baby Boomers are expected reach retirement age over the next 10 years, hospitals are buying up small physician practices in order to expand their footprint in nearby communities. These trends are generating consistent demand for single- and multi-tenant medical office buildings (MOBs) located close to residential neighborhoods and retail areas, and the sector is attracting a great deal of investor attention.
California's hospitality industry continues to thrive, as hotel sales reached over $4.4 billion during the first half of 2015, surpassing all previous midyear records since Orange County-based Atlas Hospitality Group began tracking sales activity in 1994. In fact, the prices being paid for hotels has grown so much that the midyear total surpassed volumes recorded for all full year of sales, with the exception of 2006, Atlas found. However, the industry can't maintain the pace that has been seen over the past 12 to 18 months, according to Atlas Hospitality president Alan Reay.
A pair of “game-changing investments," Volvo Cars North America and Mercedes-Benz Vans, is fueling Charleston's industrial sector and has the the potential to grow automotive manufacturing in the region and throughout South Carolina, according to a report by Colliers International. The region's industrial market is already seeing declining vacancy rates, and a slew of new construction taking place or planned will help keep up with the high demand. Mercedes-Benz and Volvo will be building manufacturing sites that, combined will result in $1 billion worth of investment and at least 5,300 jobs to start. The plants will also bring a flock of automotive suppliers that tend to locate near the main manufacturing site to reduce transportation costs. Because Charleston's industrial market is already tight, a spur in construction activity is expected in both speculative and build-to-suit construction.
Republican Gov. Bruce Rauner signed House Bill 228, forbidding the General Assembly for the next four years from approving any legislation that either creates a new type of local government or allows an existing government to split into two. The new law was passed in an effort to rein in the state's out-of-control property taxes and improve accountability to voters. Rep. Jack Franks, who filed the bill, estimated at least 50 to 60 bills have been filed in recent years to create new local governments.
Driven by the residential, retail, industrial and health care facility sectors, the South Florida metropolitan area had the second-most construction contracts awarded in the first half of 2015. According to Dodge Data & Analytics, the tri-county area had $2.96 billion in commercial and multifamily construction starts, behind only New York with a massive $17.3 billion. South Florida had more construction than larger metro areas such as Los Angeles, Houston, Dallas, Chicago and Washington, D.C. Improving market fundamentals, such as occupancies and rents, helped support the growth for commercial and multifamily construction.
As commercial real estate sales and prices continue to soar to record levels in cities around the world, many industry experts are beginning to worry the global property market is headed toward a bubble. The valuations of office buildings sold in London, Hong Kong, Osaka and Chicago hit record highs in the second quarter of this year, on a price per square foot basis, and reached post-2009 highs in New York, Los Angeles, Berlin and Sydney, according to industry tracker Real Capital Analytics. Deal activity is soaring as well. The value of U.S. commercial real-estate transactions in the first half of 2015 jumped 36% from a year earlier to $225.1 billion, ahead of the pace set in 2006, according to Real Capital. In Europe, transaction values shot up 37% to €135 billion ($148 billion), the strongest start to a year since 2007.
Categories: Real Property
U.S. Apartment growth is not showing signs of moderating, according to the July 2015 edition of Matrix Monthly, a report on U.S. multifamily market trends in the 101 U.S. markets surveyed by real estate software developer Yardi. Apartment rents in the United States rose 6.5 percent year-over-year in July to a record $1,155, up 20 basis points from June and the highest rate of growth in the current market cycle. Technology-fueled markets in the Western U.S. continued to spearhead year-over-year growth, led by Portland (14.6 percent), Denver (13 percent) and San Francisco (9.8 percent). Although markets in the Midwest, Northeast and Mid-Atlantic continue to lag the rapidly-growing metros in the South and West, growth is strong across the board. Rents increased by less than 4% year-over-year in only five metros, and only three were below the national long-term average of 2.8%.
A bipartisan group of Michigan lawmakers say they’ll make a major push in the fall to end special 'property tax discounts' given to big box stores. State Rep. John Kivela (D-Marquette) says when big box stores appeal their property tax assessments, the Michigan Tax Tribunal will treat the buildings as if they’re vacant in order to give the stores a big discount. Kivela says a lot of the stores are able to reduce their taxable value from from 60 to 70 dollars a square foot to 25, but the same rules aren't being applied to locally-owned businesses.
Office investment has taken off in the past two years, with the national sales volume in the sector rising to about $40 billion in the second quarter, according to the National Real Estate Investor. However, the high demand for office building in primary markets has pushed down available yields, causing investors to shift their attention to secondary markets in order to find higher returns. Office property sales in secondary markets totaled $8.5 billion in the second quarter, representing the strongest quarter since the recession and a 19.6 increase from a year prior, according to commercial real estate services firm JLL. In addition, the current urbanization movement and the growth in fundamentals, such as increased employment, is making secondary markets even more attractive to investors.
Dallas, Texas-based Compass Datacenters has acquired 23.5 acres in Lithia Springs, Ga. where it plans to develop four-to-five 1.2 MW data centers in six months. Compass identified Atlanta as a “fast-growing” data center market, and the site has robust power infrastructure fed by three power substations in the area, multiple power feeds onto the land and redundancy built into the power grid, the data center developer said in a statement. "Our customers have identified these markets as locations where they want to work with Compass to build dedicated data center facilities, and these newly-acquired land parcels are ideal sites because of their access to network and utility infrastructure, proximity to their operations, minimal risk factors and more,” Compass Senior Vice President Chris Curtis noted in the statement.
Vacancies are growing substantially in downtown Austin's luxury apartment market and another flood of expensive units is on the way, which will test the market's depth and stability over the next few months. The latest apartment survey published by Austin Investors Interests LLC found that new deliveries have pushed occupancy to 82 percent in the urban core, compared to 90 percent last quarter. In the past 12 months about 2,341 luxury units have delivered in a four-mile radius of downtown and more than double that are under construction in the same area. "This begs the question, how will the impact of another 5,800 units affect this downtown area?" the report asks.
Illinois Senate Democrats passed legislation yesterday that would freeze property taxes statewide for two years and would help Chicago Public Schools by picking up $200 million in pension costs. Republican Gov. Bruce Rauner is rallying against the bill, however, saying the city should not get "special" deals and he could not support the measure because it did not contain provisions that would let towns and counties across the state limit collective bargaining rights.
According to an analysis by STR, Inc., Airbnb’s presence and rates across New York, New York, make the short-term rental company a formidable competitor to the market’s hotel industry. As of 1 May 2015, Inside Airbnb listed 27,000 Airbnb units in New York City, 55% of which were entire home/apartment units. The remaining Airbnb inventory in the market comprised 42% private room and 3% shared room. According to Jan Freitag, STR’s senior VP for lodging insights, “entire unit rentals are squarely aimed at competing with hotel rooms.”
Despite the Utah Legislature passing SB97 during the 2015 session, which increased state revenue by $75 million by increasing Utah's basic property tax rate, at least 30 Utah cities and school districts — including eight in Salt Lake County — are proposing property tax increases. The Salt Lake County city and school district proposals alone would collect approximately $10 million more in taxes.