Kansas House and Senate negotiators moved toward compromise Thursday, outlining exemptions on legislation that would advance the implementation of the property tax lid law passed last year. Gov. Sam Brownback called in January for a more aggressive tax lid, which would require some property tax increases above the rate of inflation to be put to a public vote, than the version adopted in 2015 by the Legislature. Republicans and Democrats in both chambers have worked with lobbying organizations through the 2016 session on a complex bill moving implementation up one year to 2017 and layering exemptions into the text.
During a news conference yesterday on City Hall Plaza, Mayor Walsh announced her support of the Community Preservation Act, which would add a property tax surcharge to raise funds for more affordable housing in Boston. However, real estate experts say the property tax increase is likely to drive up rents in the city and expressed doubts that the burden on homeowners will be as small as they claim. The City Council must first vote to place a question on this November’s ballot. A similar tax proposal was shot down by voters in 2001.
Despite a growing number of bankruptcies and online disruption, U.S. shopping centers remained steady throughout the start to 2016, with slightly higher rents and fewer empty spaces. Cushman & Wakefield’s first-quarter U.S. Shopping Center Snapshot shows that while shopping centers across the country aren’t exactly enjoying boom times, they are at least holding steady in their ability to attract consumers who continue to grow more confident in the economy.
The U.S. industrial market has been performing better than ever. Occupancy hit its highest point in 30 years during the first quarter of 2016, and 57.8 million sq. ft. of space was absorbed, up 9.3 percent from the same period a year ago, according to a report from Cushman & Wakefield. Rents have followed the upward occupancy trajectory, increasing 5.3 percent in 2015. Although industrial experts predict rent and occupancy increases will moderate during 2016-17, due to a rise in new construction, an interesting dynamic to note is that tenants signing new leases are gravitating to newer properties that have been built to meet modern requirements. According to JLL, 78 percent of U.S. industrial net absorption activity in the first quarter was dominated by move-ins to facilities that were built in the past 27 months.
The Illinois House of Representatives voted against a proposal to freeze property taxes statewide, which would have provided some much needed relief to property owners who bear the third-highest property-tax burden in the nation. Under the plan, local governments could still increase rates, but only with approval from voters. Instead, the lawmakers approved a different property-tax relief bill that only applies to a fraction of the state’s population.
Louisville took the top spot of a new list of the Top 20 U.S. Cities for Commercial Remodeling by BuildFax, a North Carolina-based company that compiles and distributes data on the construction industry. The company says it has compiled a national database that includes more than 23 billion data points of building and remodeling records. Holly Tachovsky, CEO and founder of BuildFax, said in a news release that commercial remodeling is a popular choice nationally because it helps preserve cultural history, revitalizes neighborhoods and encourages urban density, noting that it also is a "great eco-conscious alternative to new construction."
Nassau County will begin informing 14,000 area business owners this week of a new state law that officials say will result in tax hikes for all commercial properties but will end the county’s need to borrow about $80 million annually for commercial property tax refunds, according to Newsday. The law, which was passed by the state legislature in 2014 and goes into effect with the 2016/17 tax roll, requires business owners who contest their assessments to place up to 10 percent of the assessed value of their property in an escrow account. Funds from that account will be used to pay commercial property tax refunds if the business wins its challenge.
Pittsburgh placed about 1,300 appeals it initiated on 2016 property tax assessments on hold while it comes up with a more fair process that could help keep long-term residents in neighborhoods where real estate prices are rapidly increasing, the city announced Monday. The city can appeal assessments it believes are not in line with the true value of the property. However, the city’s 2016 appeals have been frozen through the end of the year while they work to implement a new policy.
After going through one of the toughest recessions in its history, Northern Nevada’s commercial real estate market suffered greatly as rising vacancies crushed new construction activity and speculative building. The region’s commercial real estate sector is in the midst of a comeback, however, thanks to several economic development victories over the past few years causing a rising tide effect. Major projects, such as the Tesla Motors Gigafactory, Switch Supernap Tahoe Reno Industrial Campus and Rackspace Data Center, helped legitimize Reno as a viable area for industry and technology, said Ted Stoever, vice president of land and investment for Colliers International’s Reno office. Ultimately, these projects are driving job creation opportunities and all the ancillary businesses that go with that.
Commercial property transaction volume is expected to decline over the next three years to $475 billion in 2018, according to a new three-year economic forecast from the Urban Land Institute (ULI) Center for Capital Markets and Real Estate. However, this volume forecast over the next three years is surpassed only by volumes in 2007 and 2015; and follows six years of commercial property volume growth. Overall, the recent forecast projects continued economic expansion over the next three years, but at a somewhat slower pace than the prior two years. It also anticipates continued commercial price appreciation and positive returns, but at more subdued and decelerating rates; above-average but decelerating rent growth rates in all property sectors; and better than average vacancy/occupancy rates, except for retail.
Categories: Real Property
San Francisco’s booming office market is starting to raise some concerns, as tech industry turbulence could reappear and cause companies with banked space to suffer. Thanks to the tech industry, San Francisco has become the hottest office market in the U.S., with diminishing vacancy and rents soaring 137% since 2010. However, much of the office market’s strength is based on growth speculation. Major tech companies and startups have been “space banking” and signing up for large amounts of space for future expansion due to fear of the tightening office market. But these could prove to be risky wagers given the turbulent history of the tech industry.
Real estate values in Gwinnett County, GA have increased significantly once again due to the improving economy. Property owners should be on the lookout for their property-tax assessment notices, which we’re mailed out last week. About 60% of owners will see a property-value change. Steve Pruitt, the county’s chief appraiser, said overall property values are up 9 percent, though individual properties may vary substantially. It’s the third consecutive increase in property values after years of decreases that followed the recession. In 2014 Gwinnett assessments were up nearly 10 percent; they rose 3 percent last year.
Despite U.S. industrial rent growth significantly outpacing the rest of the world last year, industry experts predict it will start to moderate in 2016. According to the recently released Prologis Logistics Rent Index, global industrial rent growth reached 6.0 percent last year. The U.S. dominated that increase, with rent growth of 9.0 percent (Asia experienced 3.0 percent growth and Europe and Latin American both came in at only 2.0 percent). Though the most expensive industrial properties are still located near foreign cities including London, Tokyo and Singapore, U.S. cities—San Francisco, Chicago and Nashville, Tenn.—posted the highest rental growth rates last year.
It is no secret that significant commercial real estate investments continue to pour into the great state of Texas. However, if an owner isn’t lucky enough to receive major tax breaks from local jurisdictions as an incentive to invest here, they will have to accept some of the highest effective property tax rates in the country. The tradeoff is that Texans enjoy a relatively low sales tax rate and zero state income tax rate. Fortunately, the Texas Property Tax Code offers multiple appeal recourse avenues, which allow owners and tenants alike to review the property tax liability from a fair and competitive standpoint.
To learn more about the Property Tax Appeal Process and why patience pays off, click below to download an informative article written by Managing Consultant Carlos Villatoro, located in Paradigm's Dallas office.
Don’t Forget: The Texas Real Estate Valuation Appeal Deadline is May 31st. For more information, visit our Texas Offices page.
The performance of real estate investment trusts (REITs) outpaced the broader markets during March and ended the first quarter with a 5.86 percent total return. According to Urban Land Magazine, the U.S. economy appears to be maintaining its growth trajectory in spite of global economic uncertainty and weakness in oil markets. March employment growth stayed strong, contributing to a quarterly gain of 628,000 jobs, which is helping fuel demand for commercial real estate. At the same time, new construction has stayed in check. Overbuilding is largely not a concern, except for some property types in selected markets.
Categories: Real Property
Following investigations opened in November by state officials, three New Jersey municipalities will be ordered to conduct property revaluations, after not doing so for a least a quarter century. Officials indicated the investigations were just the "beginning of a larger effort to address issues of noncompliance," and named six other municipalities that could also face state orders. All but four of the 32 municipalities that haven't reassessed or held revaluations in 25 or more years are in Hudson, Union or Middlesex counties, according to state records.
Property owners in Marion County, Indiana should be on the lookout for their property tax bills, which will be mailed later this week. While the deadline to appeal has already passed for most Indiana counties, Marion County decided to let property tax bills also serve as the notice of value for the 2015 assessment of taxes due in 2016. Therefore, Marion County property owners still have the opportunity to appeal their assessed valuations. The deadline to appeal is 45 days from the date the property tax bill is mailed. If you would like to discuss your 2015 assessed valuation, please contact our Indianapolis office.