2010 July | CPE Blog

CREW NETWORK: CLIMBING OUT OF THE RECESSION WILL TAKE LEADERSHIP

Jul 302010

There are mixed reports that we are on the cusp of an economic recovery, and I believe that what will get us over the edge is the strength of individual and collective leadership. Nowhere is this more evident than for women in commercial real estate.

The economic circumstances today have created opportunities for women to make the field more diverse, but it will require fortitude, mentoring and a certain amount of “stepping up to the plate.”

Working with our excellent partner, Studley, CREW Network has throughout the year been offering training to our members through the 2010 Leadership Series. The program has several subsets:

• University Series: A series of calls and panels that focused on the refinement of professional content in commercial real estate through the use of credible university professors in specialties that impact many of our members
• Local Chapter Leadership: Training sessions focused on skills associated with leading a CREW chapter; using proven leaders who could help potential and current committee chairman strengthen their abilities. We believe that chapter leadership is excellent training for leading teams in the workplace
• Industry Associations: In the fall, CREW will begin a series of webinars and calls with other associations within commercial real estate. It is critical to share knowledge, insight and skills with our industry partners, if we are to develop a truly integrated, diverse universe of commercial real estate

This is a truly cross platform effort throughout CREW and the entire industry, with a very clear goal and mission – develop leadership skills that are necessary to further lift the economy out of the recession and be ready to seize and maximize every opportunity when conditions truly improve.

Gail Ayers is CEO of Commercial Real Estate Women (CREW) Network.

http://www.crewnetwork.org/

Don’t Forfeit Your Right to a Tax Appeal

Property Taxation No Responses »

Jul 282010

With real estate values down in all sectors across the nation, tax appeals are climbing to record numbers. In many cases, taxing jurisdictions cannot support or defend the values that are placed on those properties under appeal.

As municipal revenues run thin and state governments cut programs to balance their budgets, those governments understandably want to avoid returning significant amounts of money as tax refunds.

As a result, many taxing authorities are exploiting technicalities in state laws to seek dismissals of valid appeals. That makes it critically important that property owners stay abreast of all state requirements that may bear on tax appeals, and rigorously follow required procedures.

New Jersey’s Chapter 91 statute provides a clear example of the kinds of technicalities state’s employ. The statute requires the assessor to send a request to the owner of income-producing properties and ask for financial data related to the asset. The owner then has 45 days to respond to the demand. If the owner fails to respond in that time, he or she forfeits the right to challenge that year’s assessment.

In a recent New Jersey case, a municipality moved to dismiss an appeal for a failure to respond to the income and expense request. The property owner had designated an agent to receive property tax notices and correspondence. Although the agent received the request, the agent failed to file the form with the municipality.

The owner argued that the strict words of the statute required the assessor to serve the owner directly. The court held that the only address on file was that of the agent, however, and reasoned that the owner was bound by the statute. On those grounds, the court dismissed the case.

The simple lesson to learn from this example is that a number of procedural hurdles exist in each state’s tax law. Taxpayers must become knowledgeable about all applicable procedural rules and create failsafe, redundant systems to guard against the needless loss of their tax appeal rights.

Philip Giannuario is a partner in the Montclair, New Jersey law firm Garippa Lotz & Giannuario, the New Jersey and eastern Pennsylvania member of American Property Tax Counsel, the national affiliation of property tax attorneys. Phil Giannuario can be reached at phil@taxappeal.com.

Richard Green: Consumers’ Impact on Property

Economy No Responses »

Jul 192010

Distressed Asset Property Management-Will the Tide Begin to Turn?

Property Management No Responses »

Jul 072010

With the recent increased activity in the distressed asset market, I find myself thinking back to before 2007 and 2008 when the purchase of an asset was performed with little money down and was highly leveraged. There was little in the way of equity and purchases were made with the anticipation of a quick sale and profit. This changed in late 2007 and 2008 as borrower’s started to default and there was no interest to purchase these securities anymore, and lending all but dried up. Distressed Assets and the management of these assets were now the concern, as it was assumed the banks were coming immediately as logic dictated that banks in financial trouble could get back into the black by repossessing and selling these properties

The perception was that, like Distressed Asset funds and departments were being advertised daily with access to the lenders in order to gain an opportunity to purchase or manage these assets that were top of mind.

Instead of repossessing and selling, the banks decided to allow the borrowers to hold onto these assets. If you happened to be the Property Manager of one of these properties on a life line taught, to provide all lease required services, while at the same time reducing costs (but not to the bare bones), you were in a very precarious situation. Having managed vacant and partially vacant properties under extreme financial hardship over my 20 plus years in the business, I have had the experience of balancing these constraints.

For other individuals that may have only managed Class A Trophy Properties, who in the past were typically owned by financially stable corporations with tenants paying high rents, having a top support staff was to be expected as compared to Class B and Class C properties where rents are less and net operating income not as great as a trophy property. Therefore, many Property Managers had to learn to provide the same services making due less would not be out of their environment in having to manage a distressed asset.

With the recent sales of properties on Madison Avenue and Lexington Avenue exceeding expectations along with pent up demand and cash on hand to buy, banks are now looking at taking back these assets.

There will be an estimated $750 Billion dollars of commercial real estate that will most likely be taken back into the lenders hands, needing management by those experienced in distressed assets like myself. The wave appears ready to take place, a few years later than anticipated, better late than never.

What are your thoughts?

Jack Terranova, PE, RPA, LEED AP
Senior Vice President-Cassidy Turley New York