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Excess is taboo, and green is in vogue. These converging trends will alter the office landscape in new and more productive ways combining connectivity, creativity and environmental stewardship. Even owners of such iconic properties as the Empire State Building and Chicago’s Sears Tower are investing aggressively in high-performance renovations to remain competitive in the market. They know everyone from the developer to the tenants benefits. “Doing more with less have become real estate buzzwords for a lot of companies, given that real estate is often the highest overhead, next to employees,” says Greg Kindred, senior vice president with commercial real estate brokerage firm Richard Bowers & Co. Sandwich shops and a small athletic club have been eclipsed by conference areas, LEED certification, wireless Internet connectivity and lavish tenant lounges. A 2008 CodeGreen survey showed 79 percent of respondents would pay 5 percent more rent for a LEED-Silver rated building. Like many current cultural and economic trends, technology enables the mobility and spatial efficiency current work patterns demand. Off-site data and application storage reduces office space needs and energy consumption. Now workers perform effectively wherever they are needed most. John Alston, CEO of ClubDrive Systems, notes servers consume the same energy …

Hospitality companies face complex tax issues that can strain resources and drain profits. Grant Thornton's tax professionals offer 10 tips to help manage a tax burden. Extend bonus depreciation. Bonus depreciation is available for qualified properties placed in service in 2008 or 2009. It allows taxpayers to expense half the cost of the eligible property while depreciating the remaining half using normal rules. For 5-year equipment, this will result in a first-year deduction of 60 percent of the asset’s cost. Qualified leasehold improvement property also qualifies for bonus depreciation as long as the property was placed in service before Jan. 1. Qualified restaurant property is specifically excluded from the bonus depreciation rules. Consider maintenance opportunities. Taxpayers often capitalize costs to repair, refresh and maintain store locations. Under Section 162, taxpayers may deduct certain costs incurred to repair and maintain locations, rather than capitalizing and recovering costs through depreciation. An accounting method change to deduct repair and maintenance costs can accelerate expenses and improve cash flow. Determine unclaimed property. Many states are looking to unclaimed/abandoned property as a potential source of revenue, so it's important for companies to be in compliance with state reporting requirements. This is tangible or intangible property …

REBusiness Online recently spoke with Ryan Chapman, vice president of Johnson Capital in Irvine, Calif., about the current state of the commercial lending market. Johnson discussed the rise of multifamily assets, the narrowing bid-ask gap and the lending sweet spot. REBusiness Online: How do you see the commercial lending/financial market in 2010? Ryan Chapman: It certainly does seem as though someone hit the switch after the first of the year. People are tired of banging their head against the wall and are eager to get back to work. A few recent single-borrower securitizations were well received in the marketplace. Some conduit lenders are announcing that they are dipping their toes back into the market to originate loans designed for multi-borrower securitizations. The agencies continue to provide liquidity to the multifamily space, and just recently, Congress reconfirmed its support. In the existing portfolio of commercial real estate across California and throughout the country, we have essentially three types of existing transactions. There are those that work. These properties are cash flowing, have little expectation of erosion of the existing cash flow and are appropriately leveraged given the property’s current value. These properties will refinance or can be sold on the open …

On May 5, the Institute of Real Estate Management (IREM) and the CCIM Institute will be going jointly to Capitol Hill to talk with members of Congress about capital markets and federal tax issues that can potentially solve the current economic crisis in commercial real estate. IREM and CCIM support ways to increase short-term business lending, moderate-term capital improvement loans and longer-term financing or refinancing of commercial property. Having a proper “commercial property toolbox of options” is important when addressing today’s needs in the area of capital markets. Positive commercial property cash flow is always important and is especially important in addressing troubled properties. One way to generate a positive cash flow is to accelerate the properties’ depreciation. By shortening the recovery period and, at the same time, providing passive loss relief, an important incentive would be provided to those owning or managing commercial real estate. Another way to provide additional financing is through the use of funds from credit unions. Existing law limits credit union business' lending to 12.25 percent of total assets. By moving the limit to 25 percent of total assets (a current proposal in the U.S. Congress) additional funds could be provided for commercial property lending. …

The Great Recession of 2009 wasn’t especially kind to the owners of commercial real estate assets. However, in hindsight, it was a breakthrough year for senior housing and healthcare properties, as the extent that senior housing demand is sustainable during different economic environments began to more fully sink in with lenders and investors. Last year, senior housing/healthcare properties were the strongest real estate asset class in most lender and investor portfolios. The recession obviously negatively affected some aspects of the senior housing industry. Weakness in the residential housing market and the overall decline in consumer confidence forced many seniors to delay moves into independent living properties. The impact on occupancy in skilled nursing homes, where the majority of residents are funded by Medicaid, Medicare and private insurance, has been less apparent. The federal government’s stimulus program, coupled with the willingness and ability of states to meet their responsibilities to the Medicaid population, has enabled nursing home operators to perform at a high level. As a result, the industry has proven to be remarkably recession-proof in the current downturn. The pace of the economic recovery, coupled with how well state governments are able to resolve budgetary woes, will dictate how smoothly …

Being a commercial property owner right now brings many surprises, but there's one big surprise you want to avoid. If you have renegotiated your commercial property loan in order to reduce the payment terms, you may need to claim the total amount you saved as income on your upcoming tax return. It’s called cancellation of debt income, and you may be liable to pay the taxes incurred on this income. Renegotiating remains an effective strategy to reduce overhead in the short term and improve operations. This can help maintain control of your property and provide some fiscal breathing room for an extended period of time. However, it’s important to include the tax impact when considering this option. Many properties are also being surrendered to lenders to obtain relief from debt. Many of these owners fail to realize, however, that not all of the debt may be extinguished if they are personally liable for that debt. Every case will have its own issues, so we’ll begin with a few generalities. There are three ways property can be surrendered in discharge of debt: Foreclosure: a legally defined procedure for a secured lender to acquire secured property. This can be expensive and time …

Due to the current economic climate and withering demand from office tenants, landlords are seeing vacancies in their buildings skyrocket. Many tenants are downsizing, moving out and closing their doors. Moreover, since most landlords' operating income has taken a hit, refinancing options are scarce, which may further jeopardize the ownership of buildings with maturing or adjustable rate loans. These conditions should give tenants the distinct upper hand in negotiations with landlords, but when it comes to lease renewals, landlords are still stacking the deck. Here are some helpful tips to increase your odds of negotiating a successful lease renewal: Quantify, quantify, quantify Data is essential when considering a renewal. How vacant is your building? How much are other tenants paying? Are any other tenants downsizing? If you don't know what tenants next door are paying, how will you know if you're being offered renewal terms 20 percent higher? Talk to real estate professionals, neighboring tenants or others in your network. This is one of the most important decisions to your company's bottom line; don't leave it to chance or gut feelings. Leverage from thin air The process of renewing a lease is the same as relocating. Even if you intend …

There is no doubt about it: 2009 was a year filled with challenges and hardships elevated to heights no one could have predicted. This was especially true for the commercial real estate industry in South Florida, where boom quickly turned to bust. Many real estate professionals lost clients and jobs, but of all the professionals affected by the commercial real estate crash, perhaps none have been most affected as those who have not yet entered the workforce. Students preparing to graduate will face one of the toughest job markets in modern history — especially students specializing in real estate. Clearly, students of the currently-suffering real estate industry are in quite a predicament. Economic research shows that students who graduate during a recession suffer the effects for decades, and students who are forced to take lower-level jobs or positions unrelated to their education lose ground to their peers; their education becomes more out of date, and their professional networks remain constricted. When the job market does improve, these students will enter their industry at a marked disadvantage in terms of professional experience, acquired skills and wage history. But their misfortune can affect the real estate industry as a whole. For any …

All segments of the economy have been affected by the recent severe financial downturn, perhaps none more so than the real estate market. Shopping center owners and operators have grown all too familiar with the poor economic forecast, but there may be a silver lining to the weak market conditions in the form of property tax appeals. The assessed value of retail properties most likely was set before the economic downturn, so it probably does not reflect current market values. Since taxes are based on a property’s market value, as valuations decline, owners and operators can challenge the assessment of their property in order to reduce their real estate tax burden. The prospects for retail properties in 2010 are not strong, even with indications that the start of a recovery is here. According to Moody’s Investors Service (November, 2009), the All Property Type Aggregate Index recorded a 3.9 percent price decline in September. The index now stands at 42.9 percent below its October 2007 peak. Overall market transaction volume has consistently remained low throughout 2009, with transaction counts totaling less than 400 and average dollar volumes of less than $4 billion per month. All commercial property types have seen a …