Commercial Real Estate Blog by Madison

Category Archives:
Real Estate Trends

Developing Across the River: NYC’s Expanding Markets

By: Mark Faham, Regional Business Director, Madison Commercial Real Estate Services

Riding the subway each day to work and to closings is always an interesting experience. I recently noticed a fascinating fact which I had overlooked all these years: the strong correlation between subway ride distance and residential development in NYC. In recent years, there has been a huge amount of development right outside Manhattan, only about 15 minutes from ‘the city’ by subway. As the shortage of housing and escalating prices for housing skyrocket in Manhattan, NYC developers are creating housing in neighboring boroughs near subway transportation. Continue reading

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As Shopping Trends Evolve, Retailers Find New Ways to Leverage Brick-and-Mortar Locations

By Daniel Kasten, CPA, Chief Financial Officer, Madison Commercial Real Estate Services

On the heels of the ICSC RECON Show in Las Vegas, the shopping center sector of the commercial real estate market is encouraged that retailers are finding new opportunities to leverage the value of storefronts with their customers’ online shopping experiences. Indeed, since the ubiquitous online connection has changed the way we make decisions about shopping, retailers are finding new ways to connect online shopping with brick-and-mortar stores.

There are several trends in which retailers are combining online sales with brick-and-mortar stores to offer customers an optimal shopping experience. Continue reading

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Funding Real Estate Development Projects Through the EB-5

By David I. Tesler, Esq., President, LeaseProbe and Real Diligence

The goal of the EB- 5 Visa for Immigrant Investors is to stimulate the U.S. economy through job creation and capital investment by foreign investors.

The EB-5 program was created by the Immigration Act of 1990. It provides a method for foreign nationals to obtain a green card, by investing money in the United States. In order to obtain the visa, individuals must invest $500,000, or in some cases $1,000,000, into a project which creates or preserves at least ten jobs for U.S. workers. Requirements for the EB-5 program state that investors must invest in a new commercial enterprise, which may include a partnership, holding company, joint venture, corporation, business trust, or other business entities. The investment must create or preserve at least ten full-time jobs for qualifying US workers within two years.

The general requirement for minimum investments is $1 million. However, some areas are qualified as Targeted Employment Areas, due to high unemployment or in certain rural areas. The minimum investment in a Targeted Employment Area is $500,000. While other programs can take several years to issue a visa, the EB-5 program allows investors to obtain visas in as little as 24 months. Continue reading

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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.
Continue reading

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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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