By Cara Aliek It seems everywhere you look these days, the message of environmental consciousness is grabbing for our attention. Gargantuan gas-guzzling SUVs are slowly being passed over for more environmentally-friendly hybrids, retailers are reaping the benefits of offering products that donate a portion of their sale to environmental protection efforts, and a growing trend — if not the largest in terms of size and money — is re-establishing the functionality of land and buildings. In some cases, these properties are designed using energy-efficient Leadership in Energy and Environmental Design (LEED) principles, a trend still continuing to explode. This spring (May 5-7) Detroit hosts The National Brownfields Conference and with many sites still untouched, (it’s estimated 1 million brownfield sites are available in the U.S.) investors and developers are taking advantage of their benefits. In this article, we’ll take a look at a few upcoming brownfield projects and what they’re doing to reuse, reduce and recycle community eyesores. We’ll also introduce a company that helps persuade companies to donate their vacant industrial property so they can be used for small businesses. LIBERTY HARBOR Brunswick, GA During World War II, the J.A. Jones Company Shipyard cranked out 99 Liberty ships in …
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By Bill Donges, CEO Lane Co. Despite recession fears and the contraction in the real estate market, the apartment sector remains a bright spot, which may grow even brighter in the next few years. Many things are happening simultaneously: * Echo boomers are graduating from college in massive numbers, which means a growing pool of 25 to 32-year-old renters. * Many baby boomers are downsizing and looking for a lifestyle less burdened by the maintenance and upkeep of their homes. * Families caught in the credit crunch are looking for apartments instead of homes. * Immigration is increasing, and immigrants are more likely to rent than buy. Many institutional investors see these changes on the horizon, and don’t want to bet against such a large demographic movement. Apartment investment has done better than the S&P 500 index over the last 10 years, and properties could continue to grow in value. Because of the frenzy of condo conversions, and the state of the capital markets, there is a significantly lower supply of rental housing than in the past. Plus, developers are less likely to start new projects. Preliminary Census Bureau figures indicate that last year, starts of buildings with five or …
By Brian Eliason Just 7 years ago, $200 million of equity flowed into Tenant-in-Common (TIC) properties — now, that figure tops $3 billion. Why? The IRS got things rolling in 2002 when an IRS ruling provided guidance for TIC properties to be able to qualify as viable 1031 Exchange options — expanding the pool of commercial properties available for this tax-deferred rollover. This, in turn, made the 1031 Exchange more accessible to small, individual investors. The Basics — TICs and 1031 Exchanges A 1031 Exchange allows an investor to roll over the capital gain from the sale of one investment property into a “like-kind” investment property and defer the capital gains taxes indefinitely into the future. A TIC is a form of real estate ownership in which: two or more people co-own a property ownership shares do not have to be equal ownership interests can be inherited owners may receive a steady cash flow owners are not bothered with the day-to-day hassles of managing the properties The IRS, by allowing TIC 1031 Exchanges into fractional ownership structures, gave investors the opportunity to pool their proceeds with other investors toward the purchase of larger, more diverse investment properties such as multifamily …
By Bruce Gibson and Lisa Silvers, Senior Housing Group ‘ CB Richard Ellis There have been numerous headlines about the recent credit crunch and the real estate downturn. However, it should be noted that the impacts are reflected in different ways depending on the fundamentals, relative pricing/return levels, and supply and demand of each real estate sector. Senior housing is one sector of the real estate market that may behave a little differently than the others. The recent slide in the residential market along with the credit crunch has impacted certain segments of the senior housing industry, but to varying degrees. New resident move-in rates for Independent Living have declined as seniors recognize the equity in their homes has been eroded. Some seniors, considering the move to an Independent Living Facility or a Continuing Care Retirement Community, are holding off the move to see what happens in the residential market with the hope that they will regain the equity they recently lost. However, Assisted Living and Skilled Nursing Facilities have not seen a decrease in move-in rates as this type of move is a health driven decision, as opposed to a lifestyle decision as with Independent Living. Silvers Within the …
By Cara Aliek The Residences at Dixon Mills possesses something ground-up buildings will never be able to achieve: status as a historical landmark. This five-building property is the former site of the Dixon Mills factory in Jersey City, N.J., and is in the process of converting apartments into 467 luxury condominiums. But to understand the historic relevance of this project, a dateline should be established. In 1847, inventor Joseph Dixon built a factory in Jersey City, N.J., for his growing pencil company called the Joseph Dixon Crucible Co. Mr. Dixon wanted “a fine American name for a fine American pencil,” and named his writing utensil after Fort Ticonderoga in New York. The Civil War required a need for dry writing pieces and business soared. By 1869, the Joseph Dixon Crucible Co. was the world’s largest dealer and consumer of graphite. In 1982, the Joseph Dixon Crucible Co. merged with Bryn Mawr Corp. to form Dixon Ticonderoga Co., which today is based in Heathrow, Fla., and has manufacturing facilities all over the world. Mr. Dixon’s Jersey City factory was converted into apartments in the late-1980s by New Jersey-based The Morris Company. The Robert Martin Co. acquired the property in 2006 and …
By Kevin Assef, Marcus & Millichap The diverse markets comprising the Western commercial real estate region have been impacted in varying degrees by the credit crunch and subsequent devaluation of the U.S. dollar that manifested itself in the last half of 2007. Despite fallout from the subprime mortgage crisis, prices for well-located Class A product have remained relatively stable and will continue to increase steadily in 2008, particularly in cities such as San Francisco, Los Angeles and Seattle. Investors will monitor smaller, secondary markets and the performance of Class B/C assets closely this year as pricing shifts become more apparent. APARTMENT INVESTMENT TRENDS Denver Renter demand for Denver apartment properties will remain strong in 2008, supported by an expanding pool of renters and the metro’s fifth consecutive year of healthy employment growth. While job gains will be more modest in 2008 than in recent years, population growth will generate additional renter demand, with an annual average of 29,000 new residents forecast to enter the metro in the next 5 years. On the supply side, apartment builders will accelerate construction activity this year, particularly in the Aurora-South submarket, where deliveries will result in a 5 percent inventory gain by year’s end. …
By Norma Sutton, BioScience Specialist, NAI Realvest Just How Big is this Business? The global biotechnology market grew by 12.6 percent in 2006 to reach a value of $153 billion. The forecast for 2011 is $271 billion, an increase of 76.5 percent. Medical products represent 62.5 percent of the revenues and the Americas account for 58.3 percent of the revenues generated in this market. This is truly the great growth industry of our time. It has been said that the 21st century belongs to Molecular biology and the Human Genome. What does all this mean? Maybe that the quest for knowledge, control and immortality is surging. Maybe that technology is advancing so quickly that there will be a burst of new diagnoses, treatments and preventions in our lifetime. And surely that this industry is the darling of all. We have moved from the industrial age to the informatics age and now it appears we have moved to the biotechnology age. Life sciences and biotechnology are terms you see everyday now in the media. There is so much to report on — so many discoveries that no one can keep up much less quantify their importance and potential for our benefit. …
By Paul White, Professional Investment Advisors As a real estate professional and financial advisor, you pride yourself in providing unique solutions for your clients. One of the most powerful tax saving tools you can use with your clientele is a 1031 Exchange. One day, you receive a phone call from a client asking for your help in finding a replacement property to complete their 1031 Exchange. The client has sold property and has placed the proceeds with a qualified intermediary. Their tax advisor estimates taxes to be in excess of 30 percent due to the Federal and State Capital Gains Taxes, as well as a 25 percent Federal Depreciation Recapture. Your client is in one of the fastest growing demographics in the nation, aging baby boomers, that prefer passive to active ownership seeking to rid themselves of property management and the 3 T’s: Tenants, Toilets and Trouble. This appears to be the ideal set of circumstances for a 1031 Exchange — except one small detail — the amount of your client’s exchange equity is only $500,000. Knowing that this amount of equity may limit your client’s choices, you begin to search for a suitable replacement property. Your client wants the …
By Brian Patton, CCIM, Capital Realty Advisors There are three primary financial terms that affect how we determine the value of real estate. Without a working knowledge of these terms, investors and realtors are at a disadvantage in the market place. These terms may sound difficult to grasp but are an integral part in understanding how we determine the value of real estate and are important for commercial and residential investors alike. Net Operating Income Net operating income refers to the income received from an investment prior to any mortgage debt being deducted from the equation. In general, net operating income (NOI) is defined as the total possible rents minus a vacancy rate and any operating expenses. NOI is used to help compare investments without the uncertainty of what mortgage product you’ll be using. The vacancy rate is a general rule of thumb depending upon market conditions and the type of investment. It is expressed in a percentage of gross rents. Operating expenses are those normally recurring expenses such as property taxes, insurance, management fees, repairs, etc. So, a simple example would be an investment with $13,000 in potential yearly rent, minus a 7 percent vacancy rate, and $2,000 in …
By Rick Seiden, AICP As developers, designers, and real state professionals it is important to understand how technology can differentiate a project, make it unique, safer, and more successful. New technologies are continuously being introduced into development projects, but as in other aspects of current human activities, urban and retail technologies are becoming more ubiquitous and complex. Professionals in the real estate development industry should become aware of what technologies are becoming standard in new projects and which ones are just being considered. By understanding new and emerging technologies, real estate professionals and developers can keep their new developments innovative, safe, vibrant, and most importantly profitable. This article focuses on three technologies selected to illustrate this point: the first is already here, the second is quickly being deployed, and the third is on the horizon. Video Surveillance: Making Your Development Safer Urban video surveillance is being deployed widely in both large and small European projects, towns and communities and is quickly spreading in North America. Many of us are familiar with cameras set atop traffic signals, also called red-light cameras. Video surveillance is basically the same technology, but it is deployed in strategic locations throughout communities, retail spaces, or industrial …