Building green industrial properties, and seeking LEED certification, is a growing trend for developers and property owners, as they begin to recognize the wide-range of benefits it provides for themselves and tenants alike. According to the U.S. Green Building Council, as of 2013 a total of 117 industrial manufacturing facilities had earned LEED certification. These buildings accounted for 41 million gross square feet of green industrial space. An additional 703 industrial projects had registered for LEED certification as of 2013, buildings that totaled 221 million square feet. The U.S. Green Building Council said that the market of green industrial buildings had grown by 375 percent in the four years leading up to 2013.
The Montgomery County (Maryland) Council gave final approval Thursday to a $5.3 billion budget that includes the biggest property tax hike in seven years. The budget, which takes effect July 1, includes a nearly 9 percent property tax increase, as well as an increase in recordation taxes. Council members dubbed its 2017 budget an “education first” initiative, and said that in return for the added tax burden, the county’s 156,000-student school system will receive an infusion of funds to help it meet a myriad of challenges.
Real estate investment trusts specializing in data centers are reaping the benefits of our growing internet addiction. Worldwide, Internet traffic this year is expected to surpass a zettabyte (or 250 billion DVDs’ worth) of information, according to networking equipment company Cisco. The company expects current traffic to double by 2019. Because all of that Internet activity relies on the cloud (servers located in data centers), real estate companies that house, power and cool data centers are seeing tremendous growth.
The Harrisburg School Board voted 7-2 Monday night to approve the city’s 10-year tax abatement program for improved properties and new commercial development, following the Harrisburg city council members’ approval last week. Mayor Eric Papenfuse said the tax abatement program is part of the city and school district’s recovery plan, and it will encourage economic development, expand the tax base and fight blight.
Retail landlords are starting to feel the pain of their struggling tenants. Macy's, Nordstrom, J.C. Penney and other department stores last week reported another quarter of crummy earnings and warned that declines are expected to continue. Chains such as Nordstrom said they were re-thinking plans to open new stores, and others are likely to follow suit. Meanwhile, bankruptcy filings by Sports Authority, Pacific Sunwear and a rash of other retailers in the past year -- coupled with planned store closures by Macy's, Walmart, and other chains -- has already led to the highest number of store closures since 2010, according to commercial real estate firm Cushman & Wakefield.
Steady returns brought to investors by seniors housing in recent years sparked a lot of new supply, however, some markets are now at risk of oversaturation by the fourth quarter of this year as demand stalls, experts say. Though seniors housing occupancy on a national level increased slightly in the first quarter to 90.1 percent, new development is also at an all-time high, at 5.8 percent of existing supply, according to the National Investment Center for Seniors Housing & Care. The number of units under construction has increased from 22,975 in December 2012 to almost 50,000 at the start of this year, according to NIC data. The increase is driven by the sector’s steady returns, according to a recent CBRE report. Over a one-year period, seniors housing properties have been delivering average returns of 16.3 percent; over a five-year period—14.8 percent; and over a 10-year period—13.3 percent.
With the industrial sector leading the pack, commercial real estate values in the United States increased by 7 percent from April 2015 to April 2016, according to the latest Commercial Real Estate (CRE) Nowcast from Ten-X, an online real estate marketplace. The pricing index, which combines Google Trends data, Ten-X’s proprietary transaction data and investor surveys to forecast CRE pricing trends in real time, reveals that commercial valuations increased by 0.6 percent month-over-month in April and are back above their year-end 2015 level.
Major changes in Michigan Business Personal Property law provide an opportunity for manufacturers to significantly reduce their property taxes. The Michigan Department of Treasury indicates that many manufacturers failed to qualify for the new Eligible Manufacturing Personal Property (EMPP) Exemption due to the complexity of filing.
If you have Industrial Facility Exemption (IFT) returns that have been rejected, the IFT will be revoked if not corrected by the May 31, 2016 deadline. There is still time to file the required forms, but you must act quickly. If you are a manufacturer and are unsure of your exemption status, please contact us today to see how we can assist.
Despite Chicago property owners shouldering the largest property tax increase in city history, the Chicago Teacher’s Union (CTU) is pushing for hundreds of millions of dollars worth of tax hikes to increase funding for Chicago Public Schools. In a plan announced last week, one of the CTU’s tax hikes would be an imposition of a commercial property tax assessment. According to ChicagoNow, this change would automatically set the assessed value of a commercial property at 25 percent of its sale price. This change is effectively a $100 million property-tax hike on Chicago businesses, which before the record 2015 property tax hike already paid the third-highest commercial property taxes in the U.S. when compared with the largest city in each state, according to a study by the Lincoln Institute of Land Policy and the Minnesota Center for Fiscal Excellence.
All New York City income-producing properties with an Actual Assessed Value of more than $40,000 are required to file a RPIE (Real Property Income and Expense) statement with the Department of Finance by Wednesday, June 1, 2016. Failure to file by the deadline will result in denial of a Tax Commission hearing to appeal your 2017 assessment, as well as monetary penalties of up to 3% of the assessed value of your property, with higher penalties for continued non-compliance. The RPIE statement must be filed online at the Department of Finances website.
In order to attract top workers, suburban offices are increasingly adding amenities typically found in city properties, such as large fitness centers, rooftop decks with lounge areas, and bike storage areas. “The trend we see coming to the suburbs from the city is the amenity explosion,” said Stephen Wright, principal with the Chicago office of Wright Heerema|Architects. Wright said that today’s suburban office complexes include the same kind of tenant lounges, conference centers, roof decks a robust fitness centers that modern city office spaces boast. They even come with a wider variety of on-site food options, offering delis and restaurants that cater to a healthier brand of employee.
Due to low cap rates and sky high prices in gateway cities, many commercial real estate investors in search of good yield are turning to non-gateway markets as a more appealing and affordable option. A recent “State of the Market” survey by global law firm DLA Piper found that 78 percent of real estate professionals it surveyed agreed that non-gateway markets will come to the forefront of investment preferences in the next 12 months (33 percent said they agreed, and 45 percent said they somewhat agreed). The preference was more pronounced among domestic rather than foreign investors, DLA Piper reports.
After more than a year of weak oil prices, the fallout of roomnight demand in oil-producing areas has waned as supply growth continues its strong upward momentum, which means more trouble ahead for hoteliers. According to Hotel News Now, the decline in demand can easily be traced back to the price of oil. As oil prices hovered around $100 per barrel, new oil and gas wells needed additional workers and offered employment for many. But the lack of accommodations in the rather undeveloped areas of the U.S. forced workers to, in the beginning, sleep in their cars and then in “man camps” until finally hotel development caught up with the rapid demand. But as much as room demand increased when oil prices were high, it waned quickly when oil prices, and thus production and employment, decreased rapidly in 2015. Room demand changes in the submarkets* that are primarily driven by the oil and gas industry have been negative since March 2015 and decreased more than 10% successively in the last three months ending January 2016. The negative impact of the last few years is only the latest roller coaster change in revenue per available room as the oil prices and supply additions caused hoteliers euphoria in the mid-2000s and heartburn in the more recent past.
Due to a sharp drop in sales and a surge in inventory, developers are taking steps to avoid a ‘bloodbath’ as another condo bust looms in Miami. According to the Wall Street Journal, developers have started canceling projects, slashing prices and offering incentives such as private-jet access to spur sales, an ominous echo of the housing crash that pounded South Florida especially hard. Easy financing and rising prices prompted developers to build about 21,000 condos in the downtown Miami area from 2004 to 2008. Many of those units sat empty for years.
Many property owners in Bexar County, Texas suffered from sticker shock when they opened their 2016 property tax appraisal notices. Overall property value in Bexar County has reached roughly $163 billion, an increase of $13 billion over 2015. Commercial property values saw significant increases across all sectors. Industrial property valuations went up 24.6 percent, apartments 15.7 percent, offices 15.9 percent, raw land 20 percent, hotels 21 percent. Residential property values saw an increase of 7.5 percent. Property owners who are unhappy with their valuation have until May 31st to file an appeal.