After letting the historic preservation tax credit program expire last year, North Carolina legislators restored the credits in its budget last month, and developers around the state will begin moving forward with dormant renovation projects. Without the incentives, many historic preservationists said the renovations weren't financially feasible. Restoring the program was a big priority for Gov. Pat McCrory and Susan Klutz, N.C. secretary of natural and cultural resources, who acknowledged the grassroots effort from local officials and historic preservation groups to help restore the credits.
It is no secret that Brooklyn has been experiencing a residential boom over the past decade. And with Brooklyn having become such a desirable residential address, more and more companies are beginning to follow their employees. According to the New York Times, about 16 million square feet of office space is under construction or planned, brokers say, in an arc that stretches south from Williamsburg through downtown to Sunset Park. The properties range from single warehouses to multibuilding complexes. While developers may be rushing across the Brooklyn Bridge, they still seem to be hedging their bets by opting for conversion projects, which are typically less costly. If they cannot attract tenants, brokers say, much of the new crop of space can be used flexibly, such as for light manufacturing.
On Wednesday, the Chicago City Council approved Mayor Rahm Emanuel's $7.8 billion budget, which included $720 million in new taxes, fines, and fees. Facing a $20 billion pension crisis, city offices took drastic measures to "give the city a chance for the future." Unfortunately, property owners will bear most of the burden.
By Stephen Newman, Executive Vice President
The other day, I asked one of our consultants how well we had performed for one of our well known Texas investment firm clients. His answer shocked me.
With more than fifteen years of experience in the property tax industry, I, like others, tend to think about our success in terms of tax savings. How much did we save a client from their initial assessment value? What was our percentage of tax savings? How did it compare to prior years? Sound familiar?
Categories: Paradigm Info
Many oil- and natural gas-producing counties in western Kansas are starting to suffer from the energy industry downturn, facing major local tax revenue declines just as the state is ending an aid program meant to insulate them from industry downturns. Reduced oil and gas prices resulted in lower property values, and many counties are forced to either cut spending or increase property tax levies to offset the revenue decline.
There's a boutique hotel boom taking place in downtown Kansas City, which civic leaders say will help the city attract large conventions, as well as business and tourism travel. Nine boutique hotels have been announced or are under construction, which will add more than 1,170 rooms in the downtown and Crossroads area. This inventory count is separate from the planned 800-room Hyatt convention center hotel. Today, there are about 3,450 hotel rooms in Kansas City’s downtown, Crossroads and Crown Center areas.
It's a good time to be in the self-storage industry, as rents continue to rise, units are almost completely occupied, and competition is low due to limited new construction. One factor that benefits the industry is the fact that demand for storage space is relatively steady as it reflects life changes, referred to in the industry as the 4Ds--death, divorce, downsizing and dislocation, and not the economic cycle. Therefore, the storage business is considered "recession-resistant." Although expected to grow, tight supply is also benefiting the industry, and building new units can take years to complete.
Despite continued discussion about the board’s role in providing tax abatements, known as payments in lieu of taxes, outside of Downtown Memphis, The Center City Revenue Finance Corp. approved a a partial 15-year tax abatement for a $43 million apartment and retail project on a prominent but blighted Midtown. According to The Commercial Appeal, redevelopment of the southwest corner of Union and McLean would produce a net increase of $1.7 million in city and county property taxes during the term while saving developers about $10.5 million. But Downtown Memphis Commission officials were quick to point out that the tax savings was a “fictional/moot number” because the "transformative, high-impact" project wouldn’t happen without the incentive, and it was a big enough project to justify granting an incentive outside the core area of Downtown.
Although Houston's industrial real estate market has performed better than the office sector through the oil slump, thanks to an increase in demand for distribution and warehouse space from the booming petrochemical industry, that may not be the case much longer. John Talhelm, senior vice president of Jones Lang LaSalle's industrial services group in Houston, said the third-quarter numbers are still strong, but they're showing some signs of slipping. He says the while the development community has done a good job of balancing new construction with the absorption rate, a couple of factors indicate a slowdown in absorption.
Los Angeles landlords enjoyed another good quarter, raising rents to cash in on the growing demand amid shrinking supply of office space. Overall, asking rents in Los Angeles County increased 8% in the third quarter to $2.82 per square foot per month compared with the same period a year ago, according to real estate brokerage Cushman & Wakefield. Vacancy fell about 2 percentage points to 15.1%. Thanks to the steadily improving economy, the office market remains strong and shows no signs of slowing down. Many stressed business had to cut staff and reduce space to save money during the economic downturn, which caused widespread office vacancies. However, Los Angeles has been experiencing a lot of business expansions and many large tenants in the marketplace are still looking for space.
As consumer trends continue to shift to online shopping, the industrial segment of commercial real estate is reaping the benefits. Online retail sales account for 7.2 percent of total U.S. retail sales so far in 2015, according to the U.S. Census Bureau. And that percentage is expected to double by 2020. Over the past three years, the growth of e-commerce has accounted for 55 percent of total industrial net absorption in the United States. In 2015 alone, e-commerce has been responsible for 31 percent of industrial net absorption year to date. In particular, these trends have fueled Indianapolis' industrial market, which now ranks eighth among all U.S. industrial markets in terms of total net absorption, according to Cushman & Wakefield.
Hotels near or attached to airports benefit from a steady stream of travelers, which allows owners to command a higher rate premium on average over properties located elsewhere. Thanks to the steady demand of travelers looking for convenient lodging, especially in the case of delayed or cancelled flights, even hotels that are just a short shuttle ride away from airports can see the considerable benefits of their locations. According to STR, a parent company of Hotel News Now, U.S. airport hotels posted a 9.1% increase in revenue per available room through the first seven months of the year, after posting a similar growth rate of 9.3% during the same period in 2014. This is largely attributed to strong, steady occupancy (75.5% through July 2015), which allowed operators to keep pushing average daily rate, which was up 7%. Hotels in the U.S. overall reported a RevPAR increase of 7.4% for the comparable period, while ADR was up 5%.
A West Virginia committee studying tax reform is weighing options of cutting or eliminating certain taxes, and one senator said the business personal property tax may be the "sweet spot" of the discussion. Jared Walczak suggested that tangible personal property taxes and business inventory taxes hurt the state’s chances for attracting new businesses, as other states are “increasingly going toward eliminating” those taxes and West Virginia is one of only 10 states that taxes inventory. However, because those taxes are set in the state’s constitution, it would require an amendment voted upon by taxpayers.
Once the worst performing major market in the country, Detroit's office market is finally gaining momentum. Amazon and Lear Corp. both announced plans to expand in the city’s Central Business District, and will bring with them an influx of high-tech workers. According to the National Real Estate Investor, Southfield, Mich.-based automotive supplier Lear Corp. has purchased a historic 50,000-sq.-ft. building at 119 State St., and Amazon is adding multiple floors to its existing leased space at 150 W. Jefferson. Michigan is a rapidly growing technology corridor, and Detroit is enjoying the same movement that’s happening in most major U.S. markets, with Millennials wanting to live, work and shop in a major urban area.
New York State Senate Majority Leader John Flanagan wants to extend the state’s property tax cap to New York City. The state's tax cap limits school districts’ and local governments’ annual tax levy growth to 2 percent or the rate of inflation, whichever is lower. If New York City was not exempt from the property tax cap, Flanagan says it would have provided “multibillion-dollar savings for the people of the city of New York” if implemented over the past five years.