Commercial Real Estate Blog by Madison

Category Archives:
Real Estate Trends

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

Tags: , , , , , , , , , , Comments Off

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

Tags: , , , , , , , , , , , , , Comments Off

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

Tags: , , , , , , , , , , , , , , , , , , , , , , , Comments Off

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

Tags: , , , , , , , Comments Off

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

Tags: , , , , , , , , , Comments Off

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

Tags: , , , , , , , , , , , , , , , , Comments Off

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

Tags: , , , , , , , , , , , , , , Comments Off

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

Tags: , , , , , , , , , , , , , , , Leave a comment

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

Tags: , , , , , , , Leave a comment

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

Tags: , , , , , , , , , , , , , Leave a comment
WordPress Appliance - Powered by TurnKey Linux