Posted by: Bob Wiley | July 2, 2018

Commercial Properties See Major Tax Hikes

Downtown skyline

June 29, 2018

Commercial and multifamily properties across the country are seeing, in some cases, very steep rises in property taxes as assessors reset values at higher levels, the National Real Estate Investor reports. Rising property taxes are proving to be a big concern for landlords and tenants alike.

Property tax appraisals can take time to catch up to the current market conditions. Some areas assess commercial property values every year while others do it every two to three years, or even every seven years in some locales.

“There have been major re-evaluations in commercial properties in all of metro Atlanta for the past two years and especially this year,” John Hunsucker, owner of Property Tax Consulting LLC in Atlanta, told the National Real Estate Investor. He says some of the reassessed values on higher-end properties saw “tremendous increases.”

Some states and jurisdictions cap how much taxes can be raised annually, such as at 2 percent or 3 percent. However, Georgia does not have a cap, and some tax assessments have surged by more than 300 percent, Hunsucker notes. For example, in Fulton County, 2018 assessed values on higher-end apartments are more than what the properties would go for in the current market, Hunsucker says.

Not all of these tax increases can be passed through to the tenants either. Some commercial tenants have tax stops in leases that place a cap on how much a landlord can raise taxes annually. In cases like those, owners will have to absorb the higher rates. But in general, higher taxes will likely lead to higher rents for apartments, the National Real Estate Investor notes.

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Source:  Realtor Magazine

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Posted by: Bob Wiley | June 6, 2018

We are looking for a few good people!

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Posted by: Bob Wiley | May 18, 2018

Spotlight on Listing!

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Posted by: Bob Wiley | April 9, 2018

Listing Spotlight!

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5037 Wild Cherry Ln., Macungie

Nicely located Residential Development Land in East Penn School District. Zoning allows 1 residence for every 12,000 sq ft. lot. Cluster Zoning should improve possible uses. Part of the lower level is in a flood plain. Property is bordered on 2 sides by Township land, which provides great views.

Click HERE for more info

POST WRITTEN BY

Marc Rutzen

Marc Rutzen is the CEO and CoFounder of Enodo, an automated underwriting platform for multifamily real estate.

Marc Rutzen Marc Rutzen Forbes Councils

The real estate industry isn’t exactly known for being receptive to new technology. Many in the industry view technology as unnecessary, as countless people have built real estate empires and made untold millions from hammering the phones. Today, though, it’s getting harder and harder to compete in real estate without technology. In particular, there are three distinct advantages of technology that should have real estate professionals more open to adopting new developments.

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Technology can help you conduct more business.

Whatever your role within the real estate industry, everyone can agree that you need to do more deals to make more money. If you’re an investor, you need to underwrite and bid on more investment opportunities. If you’re a broker, you need to convince more people to list their properties. If you’re an appraiser, you need to complete more appraisals — and so on.

My firm has found that the average real estate analyst takes several hours to initially underwrite a property and understand its surrounding market. This means looking at nearby properties and identifying rent comps, analyzing rent growth and demographic trends in the market, quantifying any value-add potential (whether through physical or operational improvements) and distilling everything into a concise summary to discuss with management.

People have limits, though. Just as you’d hire more people to increase volume, technology can be “hired” to improve deal flow. While CRM systems have had better adoption in the market helping real estate professionals track customer conversations, analytical tools have yet to really be adopted. Many analytical tools can be employed to help your analysts leverage data more effectively — reducing those hours of analysis time to only a few minutes in some instances. Other tools can help you dynamically visualize the results of your analysis and achieve insights more quickly.

 

Source:  forbes.com

By Brian Pedersen, March 15, 2018 at 9:50 AM
(Contributed) 
1788/Riverside Business Center LLC bought Riverside Business Center, a 423,900-square-foot building at 1139 Lehigh Ave. in Whitehall Township, from Whitehall Riverside LP for $11.6 million.

(Contributed) 1788/Riverside Business Center LLC bought Riverside Business Center, a 423,900-square-foot building at 1139 Lehigh Ave. in Whitehall Township, from Whitehall Riverside LP for $11.6 million.

A Maryland-based real estate investment company bought a light industrial property in Whitehall Township for $11.65 million with the intention to make upgrades and improvements to the site.

1788/Riverside Business Center LLC, an affiliate of 1788 Holdings LLC, said it bought Riverside Business Center, a 423,900-square-foot building at 1139 Lehigh Ave., from Whitehall Riverside LP. The transaction closed last month.

The building has 11 tenants and is 87 percent leased.

In 2006, Whitehall Riverside LP converted the property from a single-user manufacturing facility into a multi-tenant warehouse and light manufacturing facility. Changes included installing 31 dock doors, 23 drive-in doors, modernized heating, ventilation, air conditioning, lighting and plumbing systems, according to a news release.

Additionally, the owner added new bathrooms to tenant suites, made over the exterior brick and concrete and rehabilitated significant portions of the roof.

The building has about 25,000 square feet of office space available for lease once the new owner completes certain building upgrades.

The new owner plans to create long-term value for the property with a strategy that includes a capital investment program to improve the functionality and aesthetics of the property, overhauling its branding and marketing and improving the property’s profile within the community.

“Riverside Business Center presented us with the unique opportunity to acquire a high-quality Class “B” industrial property that is substantially leased with in-place rents significantly below market,” said Larry Goodwin, principal of 1788 Holdings, in a statement.

The company’s ability to buy the property at slightly more than $27 per square foot, a price that is 30 percent less than the property’s replacement cost, also attracted it to invest in the site.  Click HERE to read more

 

Source:  LVB.com

Posted by: Bob Wiley | March 13, 2018

Commercial Broker’s Open House

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Posted by: Bob Wiley | February 22, 2018

What is a 1031 Exchange?

Thanks to IRC Section 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes. IRC Section 1031 (a)(1) states:

“No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”

To understand the powerful protection a 1031 exchange offers, consider the following example:

  • Assume an investor has $400,000 in gain and also $400,000 in net proceeds after closing. Assuming an investor with a $400,000 capital gain and incurs a tax liability of approximately $140,000 in combined taxes (depreciation recapture, federal capital gain tax, state capital gain tax, and net investment income tax) when the property is sold. Only $260,000 in net equity remains to reinvest in another property.
  • Assuming a 25% down payment and taking on new financing for the purchase with a 75% loan-to-value ratio, the investor would only be able to purchase a $1,040,000 replacement property.
  • If the same investor chose to exchange, however, he or she would be able to reinvest the entire gross equity of $400,000 in the purchase of $1,600,000 replacement property, assuming the same down payment and loan-to-value ratios.

As the above example demonstrates, tax-deferred exchanges allow investors to defer capital gain taxes as well as facilitate significant portfolio growth and increased return on investment. In order to access the full potential of these benefits, it is crucial to have a comprehensive knowledge of the exchange process and the Section 1031 code. For instance, an accurate understanding of the key term like-kind – often mistakenly thought to mean the same exact types of property – can reveal possibilities that might have been dismissed or overlooked. Asset Preservation, Inc. (API) is your resource to obtain accurate and thorough information about the entire exchange process.

Click HERE to view video

Source:  apiexchange.com

 

Posted by: Bob Wiley | February 12, 2018

Spotlight on Property

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1521 Old Schuylkill Rd.

An Investors delight! A retail and corporate complex fully occupied with a long-term lease in place. Lessee owns one of the top sporting goods companies. Approx. 9000 SF three-level renovated barn with retail space and offices in a commercial zone. From the outside, walk-up to the retail space on the 2nd level. Stone walls in the entry, vaulted clgs. and exposed beams throughout. The floor plan is primarily open and also includes a kitchenette & a utility room. The retail space continues to the third level with more open space overlooking the lower level. Addt’l income possible with a 2 BR apt, w/ a 2 car gar. Completing this complex is two additional one-sty buildings (2,214 SF & 2,663 SF) currently being used as offices. All this sits on approx. 1.5 AC with plenty of parking for 30-40 cars, in close proximity to 2 addt’l properties for sale for a great investment, & a short drive to one of the fastest growing towns in the county.  $595,000

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