Filtered by category: Industry Clear Filter

General Assembly Advances Legislation to Clarify Taxation of Property Management Contracts

Posted June 13, 2019

The North Carolina General Assembly advanced legislation supported by REBIC, the North Carolina Association of Realtors® (NCR) and other industry trade groups that would clarify that residential and commercial Property Management agreements are largely not subject to the state’s Repair, Maintenance & Installation (RMI) sales tax.

SB 523 — Revenue Laws Clarifying & Administrative Changes, was given a favorable report this morning by the Senate Finance committee, with an amendment that requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:

  1. They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
  2. They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
  3. More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.

The amendment also provides specific exclusions to RMI services, which help ensure much of the work done by property management companies is not subject to taxation. They are:

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Charlotte Future 2040 Plan Ambassador DEADLINE TONIGHT

Posted on June 12, 2019

The City of Charlotte is in the process of creating a comprehensive plan outlining our community’s vision of how we want to grow and the steps needed to get there.  If you are passionate about our City and want to make a big impact, please consider becoming a Charlotte Future 2040 Plan Ambassador or a Charlotte Future 2040 Strategic Advisor.

Plan Ambassadors will help spread the word about the comprehensive plan and enhance engagement by assisting with outreach efforts. 

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REBIC Raises Objection to Proposed Noise Ordinance Amendments

Posted June 7, 2019

At a recent meeting with City staff and representatives from the Charlotte-Mecklenburg Police Department (CMPD), representatives from REBIC, NAIOP Charlotte and AGC Carolinas raised objections to the Noise Ordinance revisions being proposed by the City of Charlotte.

Among other things, the amendments would allow CMPD to designate specific construction sites as ‘chronic noise producers’ and require the creation of a formal plan to mitigate noise impacts on surrounding neighborhoods.

Our three main concerns with the ordinance are:

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Huntersville Adopts Land Development Fee Schedule

Posted June 6, 2019

As it prepares to take over development plan review from Mecklenburg County on July 1st, the Town of Huntersville has amended its fee schedule to include the current (FY 2018) LUESA fees for land development plan review, bond maintenance and other related services. The fees are substantially lower than those proposed by Mecklenburg County in FY 2019 and 2020, which will increase more than 200% over a two-year period.

The main services the Town will take over from LUESA include development plan review; zoning, development and erosion control inspections; and bond administration. Five new positions have been created to provide these services, and the Town expects to have them in place within the next two months. The positions include a Street Inspector, an Erosion Control Inspector, a Bond Administrator, a Stormwater Plan Review and a Zoning Inspector.

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Opportunity Zones Aren't Just for Real Estate Development

Posted May 21, 2019

By Mary Burke Baker

Main Street and industries also stand to benefit from the new tax incentive.

Opportunity Zone incentives offer significant tax benefits to encourage long-term investment in low-income areas. Enacted as part of the tax reform bill that was signed into law at the end of 2017, Opportunity Zones sparked an initial wave of interest among commercial real estate developers, including those focused on affordable housing, office space and mixed use.

However, this early excitement led many in the real estate industry to overlook the fact that Opportunity Zones potentially can be used for any active trade or business. That includes manufacturing, retail, hospitality, medical practices, day care centers, research facilities, energy plants and grocery stores.

Click here to read more.

Checking In on Opportunity Zones

Posted May 20, 2019

Lawmakers want the Treasury Department to track the effectiveness of Opportunity Zones. Last week, a bipartisan set of senators including Tim Scott (R-SC), Todd Young (R-IN), Cory Booker (D-NJ) and Maggie Hassan (D-NH) introduced S.1344, which would put in place new oversight requirements for investments in the zones. A companion bill, H.R. 2593, was introduced in the House by Democratic Rep. Ron Kind of Wisconsin.

Investors may also be given more time to invest in the zones. An aide to Sen. Scott told Bloomberg that he and Sen. Booker are considering introducing legislation that “would move back by one year the start date of the tax breaks.” Investors are facing rapidly approaching deadlines – for some, as soon as June 29 – to buy into eligible projects in order to take full advantage of the tax benefits. Pushing back the start date would buy the Treasury additional time to finalize regulations governing these investments, and provide certainty to those deploying capital in the zones.

In other legislative news, the House Ways and Means Committee plans to hold a hearing Wednesday to discuss climate change. NAIOP supports legislation that takes a sensible approach to incentivizing energy efficiency without imposing new mandates.

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NAIOP CRE Sentiment Index

Posted on May 8, 2019

The NAIOP Sentiment Index is designed to predict general conditions in the commercial real estate industry over the next 12 months. The forecast is not based on an analysis of historical data, but rather it represents a look into the future by real estate developers, investors, operators and brokers. These NAIOP members are asked to respond to questions based on their ongoing work, including projects in their pipelines. For more information, see Understanding the Index.

Download the Report

IRS Delivers Clarity on Opportunity Zone Investment

Posted on April 29, 2019

Proposed regulations rolled out last week by the Treasury Department should make it easier for commercial real estate practitioners to invest in qualified Opportunity Zones (OZ).

An “Opportunity Zone” is defined as “an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” They were created as part of the 2017 Tax Cuts and Jobs Act, which NAIOP supported.

Investors can reduce their taxes by taking capital gains income and putting it in a Qualified Opportunity Fund that invests in designated Opportunity Zones. Under the latest IRS regulations, the funds now have 12 months instead of six to put their money to work in an OZ.

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The Loan Type Heating up the Small Business Property Market

Posted on April 26, 2019

By Mark Abell

A relatively new extended-maturity loan option from the U.S. Small Business Administration is heating up the real estate market among small businesses that are anxious to purchase properties while the economy is booming and interest rates remain low.

In April 2018, the U.S. Small Business Administration announced changes to its 504 loan program to allow for a 25-year maturity on the debenture portion of the financing package. A 504 facility is structured in three parts: a bank loan for 50 percent of the amount being financed, up to a 40 percent debenture (or bond) that carries an SBA guarantee, and as little as 10 percent equity funded by the borrower. Previously, the SBA-backed debenture was available with 10- and 20-year maturities. Now that longer 25-year maturities are available, businesses can effectively borrow more funds.

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NAIOP Insights: Trending in Commercial Real Estate

Posted on April 23, 2019

 

The biggest thing happening in commercial real estate is digital disruption.

Traditionally, construction and CRE have lagged behind other industries, but technology is changing so rapidly it's setting the framework for how we look at CRE. It's no longer a 40-50 year asset – it's a dynamic process continually being reshaped by the convergence of technologies.

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Creating a Private Equity Fund: A Guide for Real Estate Professionals

Posted on April 16, 2019

By Jan A. deRoos, PhD and Shaun Bond, PhD

The NAIOP Research Foundation has published a new white paper titled "Creating a Private Equity Fund: A Guide for Real Estate Professionals," by Jan A. deRoos, Ph.D., HVS Professor of Hotel Finance and Real Estate at SC Johnson College of Business, Cornell University; and Shaun Bond, Ph.D., West Shell Jr. Chair in Real Estate at Lindner College of Business, University of Cincinnati.

Key Takeaways:

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City Council to Vote Next Monday on TOD Ordinance

Posted on April 12, 2019

The Charlotte City Council will vote next Monday night on the new Transit-Oriented Development (TOD) Ordinance, following a unanimous recommendation of approval today by the Council’s Transportation & Planning Committee.

REBIC and our members have been closely engaged in the process of drafting the new TOD ordinance over the past 18 months, and the City planning staff, have incorporated many of our suggestions into the ordinance — from changes in maximum parking ratios to reduced open space requirements. And while we are pleased with many aspects of the TOD, we remain concerned that its limitations on building height could negatively impact economic development in Charlotte’s transit corridors.

The ordinance currently caps base height at a maximum of 130’ in the TOD-UC district, its most dense, and offers developers additional height in exchange for bonus points that advance other City objectives, like affordable housing, transportation improvements or energy efficiency. While we support each of these policy goals, we believe City Council should do everything possible to encourage density in our transit corridors, and not restrict itself from considering economic development opportunities that would otherwise be limited by the building height caps in each TOD district.

Click here to read more.

Big Data in Office Buildings Holds Promise Despite Privacy Worries

Posted on March 29, 2019

By Margarita Foster

Property managers are using “dynamic and multidimensional” information for operations but not yet for tenant engagement.

A white paper published by the NAIOP Research Foundation titled “The Office Property and Big Data Puzzle: Putting the Pieces Together”found that office building owners are capturing, storing and analyzing data to operate building systems but not to recruit and retain tenants.

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NAIOP Insights: Blurring the Retail Line

Posted on March 28, 2019

 

Redevelopment is almost 100% of what's going on in retail real estate.

Today developers are selecting premier spots where they have access to customers, and that often means reusing existing retail locations.

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Construction Momentum to Continue Through First Half of 2019

Posted on March 25, 2019

By Todd Burns

Facing a mix of potential risks and boosts, the U.S. construction industry is positioned to provide ample excitement in 2019. Forward indicators are flashing green, but with project margins facing pressure from all sides, a year with growth equal to that of 2018 would be considered a success.

Risks to the sector – including trade war escalation, deteriorating macroeconomic conditions and the worsening labor shortage – have many of us in the industry watching closely for signs of a slowdown. Meanwhile, potential boosts such as a large-scale federal infrastructure package, relief from tariffs and the continuation of 3.5 percent annual GDP growth, generate confidence that momentum in the industry will continue for the next few months.

Click here to read more.

Industrial Demand to Remain Level as Economy Steadies

Posted on March 20, 2019

By Dr. Hany Guirguis and Dr. Joshua Harris

The forecast for net industrial space demand will remain steady in 2019. According to Dr. Hany Guirguis of Manhattan College and Dr. Joshua Harris of New York University, demand will remain at approximately 57 million square feet per quarter for 2019. That is unchanged from the average actual 2018 quarterly absorption of 57 million square feet. Industrial absorption in the final half of 2018 came in slightly above expectations due to higher consumer spending and retail sales, which were buoyed by a strong job market.

Industrial demand will be off to a strong start in 2019 with a potential tapering off into 2020 as rising interest rates moderate the economy’s growth rate. At present, the risk of a downturn in the industrial space market appears slim as the nationwide vacancy rate sits at a historically low 7.0 percent. Further, gross and net asking rents are at all-time highs, indicating that the market supply continues to tighten at a steady rate.

Click here to read more.

New Report: Industrial Demand to Remain Level as Economy Steadies

Posted on March 4, 2019

The NAIOP Research Foundation has published the NAIOP Industrial Space Demand Forecast for Q1 2019.

Key Takeaways

  • Demand will remain at approximately 57 million square feet per quarter for 2019. That is unchanged from the average actual 2018 quarterly absorption of 57 million square feet.
     
  • At present, the risk of a downturn in the industrial space market appears slim as the nationwide vacancy rate sits at a historically low 7.0 percent. Further, gross and net asking rents are at all-time highs, indicating that the market supply continues to tighten at a steady rate.
     
  • While data are somewhat suppressed due to the U.S. government shutdown that took place from December 22, 2018, until January 25, 2019, economic indicators point to moderate growth.
     
  • Overall U.S. economic activity will remain steady in 2019, with annualized rates of GDP growth in the mid-2 percent range. Steady growth is the biggest factor keeping the industrial demand forecast stable. The labor market and overall consumer confidence are also expected to grow for the year, with industrial space demand increasingly influenced by consumer spending.

Overall, the U.S. industrial real estate markets appear to be healthy and stable. It is the asset class that is potentially in the best position to weather any macroeconomic downturn that may come in the next several years.

View the forecast.

New Report: Economic Impacts of Commercial Real Estate (2019 Edition)

Posted on February 20, 2019

The NAIOP Research Foundation has published the Economic Impacts of Commercial Real Estate report.

Combining the economic contributions of new development with the economic contributions from operation of existing buildings, the following economic contributions were made:

  • Contributed $1.0 trillion to U.S. GDP
  • Generated $325.9 billion in salaries and wages
  • Supported a total of 8.3 million new and existing jobs

Key factors impacting economic growth in 2019 and beyond include the following:

  • Interest rates. They are projected to move higher in 2019 as the Federal Reserve raises its rate three-quarters of a point in two or three increments over the year;
  • Labor shortages. They are already appearing in several key sectors—construction is one of them—and will tighten further in 2019 with resulting increases in wage inflation;
  • Energy prices. which unexpectedly declined during the second half of 2018 are expected to rebound in 2019 to their highest levels since 2014; and
  • The resolution of trade wars and higher tariffs instituted in 2018 and how these might affect U.S. exports, which increased their contribution to GDP expansion in 2018.
Read the Report

Charlotte Postpones TOD Ordinance Hearing as Draft Undergoes Revision

Posted on February 12, 2019

The Charlotte planning department has postponed a public hearing for its new Transit-Oriented Development (TOD) zoning ordinance from February 25th to March 18th, as it revises the proposal to incorporate feedback from REBIC and other stakeholder groups.

While the updated draft isn’t scheduled to be released until the week of February 18th, it is expected to include an expanded menu of incentives to encourage developers to include affordable housing, make infrastructure investments, or participate in the City’s Minority, Women and Small Business Enterprises (MWSBE) program. The current draft only offers developers an opportunity to increase their building height, which REBIC cautioned could be of limited value to developers. In a letter to City staff last month, we encouraged the inclusion of incentives that would provide variances on building length, building articulation, or required open space.

Other elements of the TOD ordinance that raised concerns include:

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Unlocking Opportunity Zone Deals with Off-market Data

Posted on January 30, 2019

By Richard Sarkis

Opportunity Zones are here, and the commercial real estate industry is paying close attention. Established as part of the Tax Cuts and Jobs Act in 2017, the new government program is designed to stimulate struggling economies across the nation. Handpicked for specific economic criteria, over 8,700 designated census tracts are attracting investors and developers of all kinds for their tax breaks on capital gains.

While the benefits for investment are clear, many commercial real estate professionals are a little less clear on how to start their search. How, exactly, can investors efficiently locate and analyze these assets for investment? The answer lies in off-market data. As more players enter the Opportunity Zone market, off-market data and commercial real estate technology provide a simplified search experience to find prized properties before others do and empower stronger deal-making across the country’s most lucrative markets, in areas such as Chicago, Los Angeles and Miami.

Click here to read more.