Commercial Real Estate Blog by Madison

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Real Estate Trends

The Changing Face of Philanthropy – Will Real Estate Investors Join the Trend?

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

The Millennials generation is transforming the way the world lives, works and plays. Business as usual is no longer the case as the next generation displays changing ways of doing business. One of the major differences in the business world of Millennials versus their predecessors is the stress on business being about more than the bottom line. According to Deloitte’s 2015 Millennial survey, 73 % of Millennials believe that businesses should focus on people and purpose, not just products and profits.

In the past, it may have been traditional to give a percentage of profits to charity, or to add a charitable donation to each sale. But as the world changes, the world of business philanthropy is changing as well. In order to attract the next generation of investment dollars, entrepreneurs are making philanthropy a key part of their business strategy. Will real estate investors join the trend? Continue reading

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Tax Abatements and Exemptions Available to New York City and New York State Residential Property Owners

By: Pat Anarumo, Vice President of Sales, Madison Commercial Real Estate Services

Living in NYC or its surrounding suburbs comes at a price. Real estate and school taxes often take a big bite out of property owner’s budgets; however, all is not lost. The city and state offer various tax exemptions and abatements to residential property owners. There are many different benefits that can be taken advantage of, but for purposes of this discussion I will focus on three of them.
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Texas Boom, Bust or Both? Is the Texas market destined to falter?

By Sam Herskovits, Director of Title Operations, Madison Title Texas Division

Filling up at the pump to the tune of around $2.15 a gallon can be a cause for celebration. As global prices for crude oil have dropped to around $50 a barrel, consumers across the country are enjoying their road trips once more. However, the recent celebrations have also brought rise to some concerns over the state of the economy here in Texas.

The frenzy of shale oil drilling has slowed, as energy companies in the U.S. are predicted to suffer from a prolonged slump. Oil companies in Texas are decommissioning rigs and laying off employees, hunkering down for leaner times. Does this spell doom and gloom for the Texas economy overall? Is this the end of growth and business opportunity for the second largest state? Continue reading

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Isn’t it Time to Jettison Adverse Possession Laws?

By Terence Guerriere, Esq., Executive Vice President, Madison Commercial Real Estate Services

Adverse possession is a method of acquiring title to real property by possessing it for a statutory period under certain conditions. The doctrine of adverse possession has been a part of American law since the founding of our country; a precept of western civilization’s legal system for centuries. However, perhaps it is time to recognize that the idea that an owner of real property should lose title to his land, simply because someone else has been using it, is a relic of the past.

The primary reason for the development of adverse possession law was to promote the productive use of property. If an absent owner did not tend to his land, the land would not produce food or other benefits for society. This certainly made sense during the time of an agrarian society. Today, however, there is little fear that we would not be able to feed, clothe and house our citizens by allowing land to lay fallow.
Is it time to lift the burden from the land owner of record and shift it to the possessor of land he doesn’t own?
Continue reading

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The Shrinking Due Diligence Window in Commercial Real Estate Purchases

By: Arnon Wiener, Esq., CEO, Real Diligence and LeaseProbe

The revival of the real estate market is presenting new opportunities for commercial real estate owners and investors across the U.S.. Improved lending conditions and the increase of capital availability are driving market growth on its forward momentum. After hunkering down to wait out the storm of the recession, the commercial real estate market is resurging with an influx of deals.

This is good news for real estate owners and investors. However there is a consequence to the increasing demand for properties: fierce competition. While competition is beneficial to the marketplace, investors should be aware of a secondary effect which may have a negative repercussion on the decision making process; namely the shrinking due diligence window. Continue reading

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Up or Down? Changing Capital Gains Taxes

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

The White House tax plan, as described in President Obama’s 2015 State of the Union Address on Tuesday, has revived the long debate over the use of taxes to close income gaps. In an effort to overhaul the tax code for a more progressive system, the President has proposed several significant changes.

The new proposal would raise the top tax rate on long term capital gains. Changing the rate from the current 23.8% to 28% would affect approximately the top 1% of earners. (This new rate includes the Affordable Care Act’s 3.8 percent investment income surtax on high income taxpayers.)

The new plan also proposes to impose capital gains tax on many inherited assets. Taxing capital gains at death, rather than allowing them to pass on to heirs income-tax free, would also have a major effect on the well-to-do. Other elements in the new plan include expanding middle class tax breaks, permanent expansions of the earned-income credit for the working poor, and a tax on large financial institutions.

We are sure to hear heated discussions on this subject over the next few weeks. It is unlikely that the Republican-controlled Congress will sign the President’s tax proposals into law. But it is worthwhile to consider both sides of the debate, and its potential effect on the real estate industry. Continue reading

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Top Five Challenges Facing Commercial Property Managers in 2015 …and How to Resolve Them

By: Aron Gottlieb, Senior Vice President, Diversified Capital

Today’s property managers juggle a myriad of responsibilities. From traditional rent collection and bill paying, to collecting renovation bids, managing staff and overseeing maintenance services. In addition, property managers and owners must stay on top of changing market conditions in order to evaluate and prepare to meet any upcoming challenges. There are numerous factors which may affect the operational systems of a particular property or a property management company overall.

The end of a fiscal year or beginning of a new year is typically a time spent reviewing and analyzing the past year’s performance, and preparing for the future. Here are some of the top challenges facing property managers in 2015, and suggested solutions. Continue reading

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Museum of Title Insurance – An Idea Long Overdue!

By: Sam Shiel, Esq., Director of National Title Services and Senior Underwriting Counsel – Vice President, Madison Title Agency

I’m going to be brutally honest. I am tired of friends and family asking me for stories about the world of title insurance. I know their intentions are good and I appreciate the curiosity. But enough is enough. The straw that broke the camel’s back was this past Thanksgiving. It’s become a tradition in my family that the youngster’s sit me down after dinner to share tales of the title year that was. But this year, when the dinner discussion turned to the history of the industry, I was done. Folks, I am a title professional – not a tourist attraction. And so I put my frustration into action and came up with an idea that is long overdue, “The Museum of Title Insurance”.

I’ve narrowed down location to two possibilities, Chicago, Illinois or Philadelphia, Pennsylvania. Each location is based on a real estate transaction that led to the establishment of the title insurance industry. Continue reading

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Independent Directors of SPEs – Satisfying Best Practices in Commercial Lending

By: Daniel Kasten, CPA, CFO, Madison Commercial Real Estate Services

Best practices are a useful tool for real estate owners and managers to operate their business successfully by providing a framework for the professional delivery of CRE services. When it comes to commercial real estate lending, lenders often approach a transaction with their own set of best practices and requirements. In order to qualify for a loan, lenders expect adherence to these regulations, and consistent adoption of best practices.

One of these best practices is the establishment of a Single Purpose Entity (SPE). While many real estate owners wish to comply with lender’s regulations, establishing bankruptcy remoteness with an Independent Director can be difficult for some. Members of the real estate industry are often hesitant to include an unrelated third-party in their private transactions. Why is that, and why are lenders increasingly requiring SPEs? Should real estate owners worry about SPEs? Continue reading

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Texas Real Estate Forecast – Sunny and the Future looks Bright

By Moshe Hildeshaim, Director of Operations, Madison SPECS

My first visit to the Lone Star State last week was to attend the International Council of Shopping Center’s (ICSC’s) Texas Conference and Deal Making. This annual event gathers real estate owners, developers, retailers, brokers and other real estate professionals. I met with property owners of shopping centers, multi-family properties, mixed use buildings, etc. to discuss the tax benefits of a cost segregation study. The general atmosphere of the show was extremely positive….. This is consistent with findings in two major reports regarding the current and future commercial real estate industry. Continue reading

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