Features

Carolyn Oppenheimer In this difficult retail economy, a shopping center owner can’t simply assume that the tenants will do enough to generate the customer traffic needed for long-term success. Certainly, national restaurant and retail chains often have substantial marketing and advertising budgets that can be of tremendous help. It’s no secret that stores and restaurants surrounding major traffic generators benefit from their efforts. But many retail centers have a mix of everything from mom and pop stores to startups to small chains that don’t have large advertising budgets. So what can a shopping center owner do to supplement the tenants’ efforts and not break the bank in the process? Here are six things to think about that could help: 1) Realize that marketing dollars will go further in a small town than in a big city, and adjust your planning accordingly. Advertising in small-town newspapers and on the radio costs a fraction of what it costs to get similar exposure in a large city. With that in mind, think about a highly targeted approach in metro areas, perhaps focusing on a tight radius around the center and considering channels that directly target shoppers that fit a very narrow — but …

Stewart Mandell, Esq. We’ve all heard the old saw: “Denial ain’t just a river in Egypt.” Yet with property taxation, it is no laughing matter when assessors are in denial about the substantial decline in property values both during and even following the Great Recession. Fortunately, tax attorneys who presented appropriate evidence have succeeded in many recent cases. A 2011 Michigan Tax Tribunal decision involving a grocery-anchored retail building is particularly telling. The tribunal reduced each assessment about 85 percent because the vacant building was worthless on each of the Dec. 31 valuation dates in 2007, 2008 and 2009. The evidence the owner’s tax appeal counsel submitted was compelling. Among the highlights: • A contractor testified about the property’s significant structural problems, calculating that a partial demolition and reconstruction to restore the asset’s value would cost almost $1.7 million. • An architect, who was qualified as an expert, corroborated the contractor’s cost estimate as reasonable. • The broker who had tried to lease or sell the property testified about the lack of interest in the building. The only purchase offer received was well below the government’s position, and was withdrawn after the prospective buyer’s property inspection and due diligence. • …

ATLANTA — Voters across 10 counties in metro Atlanta will head to the polls Tuesday, July 31, to decide the fate of a referendum that, if approved, would fund local and regional transportation projects through a 1 percent sales tax increase for the next decade. An economist for the State of Georgia has estimated that the Transportation Special Purpose Local Option Sales Tax, or T-SPLOST, would generate $8.47 billion over 10 years. The ballot initiative calls for the money to be split between two funds: 85 percent, or $7.2 billion, would go toward regional projects already selected by the Atlanta Regional Commission, while the second fund would account for 15 percent, or $1.27 billion, and will be allocated directly to counties and cities. The revenue from the sales tax increase in the latter fund will be distributed back to each jurisdiction based on population and centerline road miles present in that jurisdiction. Vocal Supporter The commercial real estate industry has taken a strong stance in favor of T-SPLOST. Clark Gore, regional managing principal in the Atlanta office of brokerage firm Cassidy Turley, says passage of the referendum would be a win-win for everyone involved. “From a self-serving standpoint, we would …

HOUSTON — Ken Stockton, a longtime leader with NorthMarq Capital, passed away in Houston on Thursday, June 28, at the age of 68. Stockton was one of the founding members of Houston mortgage banking company Stockton, Luedemann & French, which later became Stockton, Luedemann, French, Jackson and West, and was acquired by NorthMarq in 1998. “Ken accomplished many things over his short time with us,” says Ed Padilla, CEO of NorthMarq Capital. One that will live with many of us was his impact on the growth and development of our great company, NorthMarq Capital. We are forever grateful for his counsel, leadership and contributions.” Stockton, Bill Luedemann, Kerry French, Dan West and John Burke founded their firm in 1985 after careers with another mortgage banking firm in Houston. SLFJ&W was the first of 13 acquisitions that NorthMarq made between 1998 and 2005, resulting in doubling of the offices and increasing the number of employees from 130 in 1998 to 360 in 2005. “Ken, Kerry, John, and I worked together for more than 30 years,” says Luedemann. We will miss his wisdom, his counsel, and his sense of humor.” “I had the privilege and pleasure of knowing and working with Ken …

By Robert Gordon, Esq. Wisconsin tax law requires assessors to assess real estate at its fair market value. Whenever possible, that value must reflect recent sales of reasonably comparable property. Longstanding Wisconsin Supreme Court decisions have held that real estate cannot be assessed based on an imaginary or hypothetical market, or at its intrinsic value to the current owner, if that value differs from fair market value. Under those decisions, real estate can only be assessed at what market evidence indicates a third party would pay for the property in the open market. In the recent case of a specialized plant, the Wisconsin Supreme Court rejected the property owner’s argument that the plant was assessed at its intrinsic value to the owner’s manufacturing business and not at its fair market value as real estate. The background The plant was built to manufacture a highly specialized food product, using a process regulated by the U.S. Food and Drug Administration. The manufacturer incorporated unique real estate features — at tremendous cost — to meet FDA standards. These included a spray dryer more than 100 feet tall housed in an 8-story tower, as well as concrete surfaces specially treated to eliminate any air …

Savannah Duncan Though Atlanta is still recovering from The Great Recession, there are signs of life in the market as several development and redevelopment projects are underway. “We lost a significant number of jobs and Georgia suffered more bank failures (79) than any other state in the nation,” said Amanda Rhein, senior project manager of redevelopment at Invest Atlanta, the official economic development authority for the City of Atlanta. “We’ve come a long way and are really happy to finally start talking about some positive developments.” Rhein’s comments came last Wednesday at the Urban Land Institute’s “Development — Here We Go Again!” panel. The discussion, which was moderated by Rhein, included Steve Baile, senior vice president of Atlanta operations at Daniel Corp.; Ben Brunt, principal with Noble Investment Group; Eric Weatherholtz, co-founder of Healey Weatherholtz Properties, and Bob Voyles, CEO of Seven Oaks Co. Each panelist took the opportunity to discuss a development project that is currently underway or planned in the city of Atlanta. 77 12th In Midtown, Daniel Corp. is currently working on the $82 million 77 12th, a mixed-use retail and residential development located on the corner of 12th Street and Crescent Avenue. Northwestern Mutual is the …

By Karla Zens As the real estate market warms up in the Southeast and across the U.S., dollar stores retain their red-hot appeal with real estate investors. Dollar stores — such as Dollar General and Family Dollar — gained shoppers during the economic downturn and have maintained popularity, even attracting new demographics. They’ve done so by improving their merchandise to include more name brands, adding more food and drug options, upgrading and renovating existing stores and, of course, building new stores at a record pace. The smaller footprint of dollar stores makes them more manageable and faster to navigate than their big-box brethren. As sales and target audiences have grown, dollar stores have entered more desirable Southeast markets with better demographics. Based on this success, as well as the relative lack of inventory in the market, cap rates for dollar stores have continued to fall in 2012. In the case of Dollar General, factors compressing cap rates include recent credit hikes, a low price per square foot, small price points, the transition to a triple-net, 15-year corporate lease, and the availability of new financing. Investors are also gaining confidence that they could replicate the rent if a dollar store were …

Matthew Ward The Chicago downtown office market is on a roll. Vacancies have fallen for more than 12 months straight as corporations pull the trigger on new or rehabbed office space in marquee locations to accommodate consolidation and growth. One of the big stories is that the market is far more geographically diverse today. We are seeing the suburban sprawl in reverse as corporations leave far-flung business parks to seek out trendier 24-hour neighborhoods such as River North (Chicago’s tightest submarket), the West Loop and the Millennium Park/East Loop-area. Where you work is also increasingly where you live. Chicago’s 136.7 million-square-foot office CBD market reported a 14.9 percent vacancy rate at the end of the first quarter, a welcome decline from the 15.4 percent reported during the fourth quarter of 2011. According to CBRE Group, downtown vacancy has fallen in every quarter since the end of 2010, when the rate was 17 percent. It peaked at 17.3 percent midway through 2010. Overall vacancy numbers include sublease space. Direct vacancy was 13.6 percent in the first quarter of 2012, down from 14 percent in the prior period. Compare that to the suburbs, where the first-quarter vacancy rates rose to 24.6 percent …

Interview by Matt Valley The retirement of Julian Diaz as chair of the Department of Real Estate at Georgia State University and on June 1 capped a fulfilling 25-year career as an educator. The native Georgian’s relationship with GSU actually began much earlier — in 1971. To financially support his way through school, Diaz worked in a lithography shop in downtown Atlanta during the day before walking over to the campus to attend afternoon and evening classes. During this time, he also started doing some computer programming for his father’s appraisal company, which eventually evolved into a full-time position as an appraiser. Diaz graduated with an undergraduate degree in real estate from GSU in 1975 and later earned a master’s degree in business administration, with a focus in real estate and finance, from the University of Georgia. He returned to GSU in 1983 as a doctoral student and graduated with a Ph.D. in business administration, with a focus in decision sciences, in 1987. After teaching statistics for a few years at Georgia College in Milledgeville, Georgia, he accepted a temporary appointment at GSU, was later promoted and awarded tenure and became the chair of the real estate department in 2005. …