Commercial Real Estate Blog by Madison

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Real Estate Trends

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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Measure Twice, Close Once – The Importance of Accurate Survey Readings

By: Joseph Kipper, Senior Underwriting Manager, Madison Title

The old saying, “Measure twice, cut once”, certainly is useful for carpenters. One should double check measurements for accuracy before cutting a piece of wood, rather than rushing to cut and making errors which waste material. Aside from carpenters and tailors, there are other industries where accurate measurements are of supreme importance. Before purchasing real estate, it is important to obtain and examine the exact measurements of the property. Here’s why. Continue reading

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Maximize Your Pre Due Diligence Success – Three Questions to Ask when Assessing a Potential Commercial Real Estate Acquisition

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

Is there a method for CRE investors to better utilize the time spent on the preliminary assessment? How can a CRE investor prioritize the process to focus resources on the most worthwhile properties?

Deal assessment includes many steps and areas of responsibility. During the beginning stages of investigation, a potential buyer is probably not interested in reviewing every single detail. He would not want to incur the expense of a comprehensive due diligence analysis and review simply to weed out the properties that do not appear to be successful.

An excellent solution is to conduct Pre Due Diligence. With a pre due diligence review, the buyer can cover key areas of consideration while incurring a limited expense. Here are three key questions to ask. Continue reading

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Happy Anniversary to the Trusted Advisor Blog

By: Elliot Zaks, Principal, MCRES

We are pleased to celebrate the anniversary of the Trusted Advisor blog. It’s been four years since our first post entitled “Two Recent Court Rulings Impact Related- Party 1031 Exchanges.” Since September 2010, the Trusted Advisor has consistently published informative and helpful articles. Topics have touched on such diverse topics as crowd sourcing, mortgage fraud, real estate easements and development rights. We’ve blogged regularly, averaging 32 posts per year. In that time, we’ve had 104,917 page views and 38,002 readers.

Read on to find out our top ten posts! Continue reading

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Water, Water Everywhere… The Complex Issues of Tidelands

By: Michael Donini, Esq., Senior Commercial Counsel, Madison Title Agency

Global warming, melting polar ice caps and super storms are just a few of the news bylines that we hear about on a daily basis. Tidal waters are especially complex. The general rule is that all lands below the mean high tide line are subject to ownership by the state, which holds them in trust for the people of the state. Since tidelands are held by the state, this can represent a challenge in a real estate transaction which involves tidelands. An unaddressed tidelands claim will be a cloud on the property owner’s title.

A wise practitioner would be prudent to recognize the impact of water and water rights on real estate and take the necessary steps to address those issues. Continue reading

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What are the Obligations of an Insured who Files a Title Insurance Claim?

By: Debra Smith, Esq., Associate General Counsel, Madison Title Agency

A recent Connecticut case, Chicago Title Ins. Co. v. Bristol Heights Associates, LLC, 142 Conn. App. 390, 70 A.3d 74 (Conn. App. 2013), cert. den. 309 Conn. 309, 68 A.3d 662 (Conn. June 20, 2013), underscores the importance of understanding your title policy when you file a claim with your title company. In this case, Bristol Heights Associates, LLC (“Bristol”) filed a claim for unpaid taxes covering a period prior to the date it acquired title to the property. These taxes were missed by the title company. The individual that sold the property to Bristol became a member of Bristol at the time of the conveyance. There were questions as to whether seller’s knowledge of the taxes could be imputed to Bristol, since the seller became a member of Bristol. Continue reading

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Shopping Malls Get a Facelift and Find Savings by Accelerating Depreciation

By: Eli Loebenberg, CPA, CEO, Madison SPECS

Popular media is full of gloom and doom predictions regarding the death of the shopping mall, citing the fact that 400 shopping malls in the US have been repositioned or closed in the past decade, and no new shopping malls have been completed since 2009. However, the shifting landscape of retail markets does not signal the death of the shopping mall. Rather, the traditional shopping mall is experiencing an evolution as investors and developers work to meet the changing needs of the next generation of shoppers.

There are many influences which are changing the shape and direction of the traditional American shopping mall. Competition among regular retailers is stiffer than ever, as online shopping and new delivery channels erode sales for “brick-and-mortar” stores. As a result, many department store anchors have disappeared due to bankruptcies and consolidations. And, consequently, the focus of the shopping mall industry has shifted. The success of today’s shopping mall depends on the quality and character of its public environment, as much if not more than the quality of its shopping. The mall has become a gathering place, a location where people interact comfortably and spend time with others. In essence, its become the social hub for physically connecting and interacting with others.

While new construction has stalled, developers are rehabilitating and repositioning existing mall sites across the country. Renovating an aging mall is a tremendous investment. Thankfully, the IRS does give direction in the classification and examination of improvement costs, in order to recover costs through depreciation of tangible property. Continue reading

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The Importance of Protecting Leasehold Ownership Interests

By: Keren Peters Atkinson, Chief Marketing Officer, Madison Commercial Real Estate Services

There are several types of ownership interest in real estate. While the most common is fee simple interest, leasehold interest is also seen often in certain situations and states and with certain types of property. Each type of ownership interest has its benefits and purposes. However, one thing they share in common is a need to protect the purchaser’s investment in the property. Here is why it’s important to protect an investment, regardless of whether the ownership is fee simple or leasehold.

Continue reading

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