Commercial Market News
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Tax Liens Threaten Baltimore Condos
March 27, 2009
By Robbie Whelan
In mid-May, the City of Baltimore will auction off more than 23,000 tax certificates on properties owned by people who have fallen behind on their annual property duties.
Many of the properties involved are derelict, abandoned rowhouses owned by deadbeat absentee landlords. But at least 350 of them are units in classy condominium developments in zip codes near the water and around downtown, some of them worth up to $1.5 million apiece. In last year's tax sale, just fewer than 50 such units in the same areas were listed.
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NYC Hikes Property Tax Assessments Jan 21, 2009 - CRE News
New York City has pounded commercial properties by increasing their assessed values, which are used to determine property taxes. Residential properties were hit as well, but not as hard. Apartment buildings saw their assessed values climb an average of 7.78 percent, while houses rose by 4.41 percent. Some apartment buildings will be paying 43 percent of their net income as property taxes.
Office buildings, according to the Real Estate Board of New York, could be paying more. A vacant parcel at 158 Madison Ave., which is being redeveloped, saw its assessed value skyrocket to $12.8 million from $5.58 million. And a parcel across from Carnegie Hall, where a hotel is expected to rise, saw its value shoot up to $18.6 million from $2.2 million.
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Some investments you might think are safe actually can be losers
Sunday, August 31, 2008
By Tim Grant, Pittsburgh Post-Gazette
Investors who can't make sense of today's stormy stock market might think the safety and security of bond mutual funds and money market accounts are a way to avoid losing money.
But many of them have opened their monthly statements only to discover they've had a negative rate of return in their fixed income accounts, and come to the sobering realization that when it comes to investing there's no such thing as a sure thing.
"What people need to realize is that even though their fixed income investments pay a fixed interest rate, their principal dollars will fluctuate with market conditions," said Nadav Baum, managing director of investments at BPU Investment Group, Downtown.
In other words, if an investor owns a bond paying 5 percent interest until it matures, he will receive that fixed dividend for the life of the bond and get all of the principal back. But the actual value of the bond will fluctuate daily based on current interest rates and company and industry risk.
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Updated: 7/29/2008 11:47:02 PM
Property tax delinquencies on the rise
| By Emily Banks |
| Leader-Telegram staff |
Eau Claire County has seen tax delinquencies rise in the past three years, and County Treasurer Larry Lokken expects that trend to continue as Thursday's deadline approaches to pay the second half of property tax bills. He estimates the county's outstanding tax payments will be $1.3 million by the end of August.
Chippewa County, and other counties across the state, likely will see a similar pattern.
"As far as will there be more delinquencies, I'm afraid that there probably will be,"
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Wednesday, October 31, 2007
Phila. takes next step in campaign to collect back taxes
Philadelphia Business Journal
The city of Philadelphia will move from warning letters to lawsuits on Thursday in an effort to collect more than $235 million in delinquent business and real estate taxes over the next five years.
More than 100 lawsuits, representing $3.6 million in delinquent real estate taxes, will be filed in the Philadelphia Court of Common Pleas by the city's solicitor and attorneys from Linebarger Goggan Blair and Sampson. Once filed, court hearings will be set and the properties can be sold at sheriff's sale to pay the delinquent taxes, the law firm said.
The city has already sent out about 23,000 intent to foreclose notices to property owners and plans to file additional lawsuits against thousands of delinquent taxpayers in coming months. The average real estate delinquency among the 23,000 delinquent accounts is $8,965 and dates back 13 years. The average delinquent taxpayer among the city's top 1,000 delinquent accounts owes more than $32,000 -- debts amassed over the past 15 years, according to the Mayor's Office.
The additional revenue collected, over the next five years, would go to the Philadelphia School District, which would receive about $126 million, and the city, which would get roughly $109 million.
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Arlington reports record property tax delinquency
By Sarah Raymond
Special to the Examiner 8/19/08
Fewer Arlington County residents paid their taxes in June than in any time in county history. The treasurer?s office went into crisis mode June 27, when it calculated that taxpayers owed $8.7 million in real estate taxes, originally due June 15. That degree of delinquency is almost double the county?s usual rate. Treasurer Frank O?Leary?s office used tough tactics to induce offenders to pay their taxes, ranging from phone calls and letters to confiscating license plates from delinquents? cars.
The county managed to recoup $7.8 million of the funds by Aug. 14.
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Apartment Living Is Appealing to Many in Indianapolis
Digested From "Amid Home Sale Slump, Rental Housing Back in Spotlight"
Indianapolis Star (03/10/08) by Dwight Adams
Just as the number of single-family homes sold and their average prices are falling, rental incomes and occupancy rates are rising for multifamily housing communities throughout the Indianapolis metropolitan area. The National Apartment Association (NAA) confirms that market conditions for rental housing are clearly improving statewide, especially with the subprime mortgage meltdown hitting single-family homes so hard. NAA Treasurer Mike Gorman states, "Occupancies are increasing, effective rents are increasing and concessions are disappearing from the marketplace. Now you're seeing rents move [higher] and home prices decreasing, [and] that's a trend you will see throughout 2008 and into 2009." Steve LaMotte, a senior vice president in CB Richard Ellis' multihousing division, adds that more people in the Indianapolis market appear to be renting for a number of reasons. Among them: they want to buy, but face tightening credit; some are waiting for home prices to fall further; while others may have lost their homes due to foreclosure. Gorman, a past president of the Indiana Apartment Association, concludes that more people are becoming "renters by choice" even though they have the income levels and credit scores to qualify for mortgages.
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Apartment Sector to Be Star Performer in the Years Ahead
Digested From "Investors Bide Time for US Realty"
Australian (02/25/08) by Turi Condon
CB Richard Ellis Investors has put a hold on new acquisitions, waiting for the U.S. commercial property market to hit bottom. Executive managing director Michael McMenomy believes the apartment sector will likely rank as the top performer over the next three years. CBRE Investors research shows that apartments account for roughly 20 percent of U.S. investment property, mostly held in listed apartment REITs. McMenomy and Douglas Herzbrun, CBRE Investors' global head of research, have tabbed pension funds as the most opportunistic investors for the remainder of this year. Last year, CBRE Investors made $11.7 billion of property investments in the United States, Asia and Europe and sold $4.8 billion worth of real estate. Web Link to Story
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Multifamily Housing Communities Flourish in Current Housing Market
Digested From "Multifamily Properties Flourish in Current Housing Market, IBS Speakers Say"
Multi-Housing News (02/08)
Attendees at the recent International Builders' Show noted that many non high-rise condo developers have switched to building apartments due to changing market conditions. At the same time, buyer traffic has increased in condo sales offices that are still open. Because the condo market is fairly new in such large southern cities as Atlanta and Dallas, some developers are dealing with problems of inventory and declining sales for the first time there. Bill Donges, CEO of the Lane Company, remarked, "The fundamentals of the condo market are solid, but it will take 12 months to two years to burn off the supply." Web Link to Story
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BRE Properties Posts Increase in Quarterly FFO
Digested From "BRE Properties 4th-Qtr FFO Rises"
Associated Press (02/05/08)
BRE Properties Inc. confirms that its fourth-quarter funds from operations increased 11 percent to $36.1 million, thanks to improved same-store property-level operating results and income from newly developed apartment communities and acquisitions. Revenue, meanwhile, increased 8.8 percent from $81.7 million a year earlier to $88.9 million. Net income rose from $32.6 million to $36.1 million over that same time span. BRE Properties is headquartered in San Francisco and is focused on multifamily housing in the West.
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I had a cushy job as a National Sales Manager but I was missing out on the big bucks! I contemplated moving back to Phoenix where my comfort zone was. Then I found World Wide Credit Corporation. They introduced me to broking trust deeds. I chucked the prospect of partnership in the mortgage banking concern (Thank God for that; I'd be in big trouble, now) and immersed myself into learning my new craft.
Private Equity Lending is essentially asset-based lending. We originate loans at low loan-to value for investment by private investors. Real people lend this money not faceless institutions so you have to be extremely careful about the due diligence and packaging. If you screw deals up, you're messing with someone's retirement money. We've been careful but successful in our pursuit.
The sub-prime mortgage market is falling apart. Wall Street firms are being stung by the bad sub-prime loans they bought and demanded that the lenders who sold them buy those loans back. The sub-prime lenders didn't have the money to do so. Those Wall Street firms simply swapped the debt for ownership in the firms. Once the camel got his nose underneath the tent, he didn't like what he saw.
The sub-prime mortgage market is completely tightening its lending standards. The wholesale account executives, once compensated like a proven reliever for the Padres, are applying for night gigs as bartenders to supplement their income. The words "stated income" are becoming more politically incorrect than a racial slur. The new sub-prime lender will emerge as the prostitute who found God.
Which brings me to the opportunity. There will be a lot of borrowers...many, in fact, who need the help of a private mortgage lender. There will be so many borrowers who are shunned by the "new and improved" sub-prime lenders that a trust deed investor will have her pick of the litter these next 12-18 months. She'll be able to significantly upgrade the credit grade of her portfolio without sacrificing loan-to-value or double digit yield.
Vacuums create opportunities for those wise enough to recognize them and nimble enough to seize them. Let's cash in on The Trust Deeds Boom of 2007. Web Link to Story
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Wichita Apartment Vacancy Rate Falls
Digested From "Apartment Vacancy Rate Falls"
Wichita Eagle (02/05/08) by Dan Voorhis
Savage Inc., publisher of the Wichita Apartment Guide, reports that apartment vacancy rates throughout the Wichita metro area have dipped to their lowest rate in 10 years. This, in turn, has resulted in rent hikes and new construction. Savage researchers state that Wichita's overall vacancy rate was 6.6 percent last month, which marks a gradual decrease from the 2004 peak of 15.5 percent. One of the main reasons for the lower vacancy rates is the upturn in Wichita's economy. With the city creating more jobs, more people are moving there to take advantage of the increased opportunities. In addition, increased employment means more workers can afford to move out of shared housing and into their own apartment. Vacancy rates in most parts of the city have fallen low enough that apartment property owners and managers now feel comfortable hiking monthly rents. In just the past year, Savage calculates that a whopping 65 percent of local apartment communities raised rents an average of just more than 3 percent.
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Multi Family Demand Surges Amind Trubulence in Mortgage Markets
November 2007
Apartment properties remain one of the strongest investments in the commercial real estate market, says Brian McAuliffe, managing director and chief investment officer ...
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