Articles About Commercial Real Estate

Recovery in investment interest trend continues: JREI

Posted by: James S.

 

The results of the 22nd edition of the Japanese Real Estate Investor Survey were released by the Japan Real Estate Institute (JREI), a major appraisal firm. The number of investors who answered that they would "proactively make new investments" in the coming year has increased significantly, which made it very clear that investment interest is recovering.   The ratio of respondents who would be willing to make new investments had hit the bottom at 45% in the second last survey conducted in April 2009, making a significant improvement to 60% in the last survey conducted in October 2009.   Furthermore, the ratio increased to 73%, an increase of 13 points, in the latest survey. Meanwhile, 22% of respondents answered that they would "refrain from making new investments for the time being," down 9 points from the 31% marked in the previous survey.   The survey was conducted on 220 companies involved in real estate investment, including pension funds, insurance companies, real estate companies, banks, asset managers, arrangers and appraisal organizations. A total of 124 companies responded.   The expected cap rate and the market cap rate for Class A buildings in the Marunouchi and Otemachi areas in Tokyo were 4.5% and 4.2%, respectively, remaining unchanged from the past two surveys.   In respect to ordinance-designated cities, the expected cap rates remained the same as the previous survey in all cities except for Nagoya, for which the expected cap rate reached 6.4% with an increase of 0.2 points.   With respect to the future trend in office rents in Tokyo, fewer respondents expected a decline compared with the last survey. The most resounding response for the rent in the Marunouchi and Otemachi areas was that it had already bottomed out. Meanwhile, the expected rate of rent decline in ordinance-designated cities remained roughly at the same level as in the last survey.   Expected cap rates for residential properties in Tokyo decreased for the first time in five periods (two and a half years) in the Joto area (Sumida-ku, Koto-ku), marking 6.2% with a 0.1 point drop for studio apartments and 6.3% with a 0.2 point drop for family residences.   JREI also started a Global Real Estate Markets Survey from the latest survey. The survey was conducted in a similar manner on major cities in the U.S., the U.K., France, Germany, Australia, China and Korea and answers were collected from 81 companies, mainly foreign-based companies engaged in real estate investment.   The expected cap rates and the forecast for the cap rates in six months (October 2010) for prime office buildings in each region were announced in the survey results.   According to these results, for Class A office buildings, the expected cap rates were 7.3% in the Financial District in New York and 5.8% in the City District of London. The largest increase in the coming six months was predicted for the financial district in Beijing, where the rate is expected to rise from 6.5% to 6.9%.

Last updated: 09.25.2010 08:19 PM

Tips on Choosing Broadband & Phone Systems for Your New Office Space

Posted by: Mariange R.

You’ve just spent months searching for an office space to rent for your company. You finally decide on a location and then ask the landlord/broker/property manager “can you recommend a telecom vendor who services this building”. If it were only that easy. Here some helpful advice:

Timing: How quickly you need service is going to drive a lot of decisions. When we moved earlier this year the whole process was fast tracked with just 3 weeks from lease signing to move-in. Budget constraints and bandwidth requirements were important, but the deal breaker was having service on move-in day. To meet our deadlines, we started by asking our landlord for a list of telecom providers who were already authorized to service the building and were in a position to get to work quickly. We were interested in a dedicated circuit (like a T-1), but almost all providers indicated a minimum 4 week lead-time, so we looked for a short term solution. The simplest move for us was to get basic phone lines and DSL service from our local phone company AT&T. The DSL was installed within 10 days and we had a solution for day one and an in expensive back up solution going forward.

Type of internet service: Fast speeds can be had through a number of different options including inexpensive alternatives like DSL, Cable, and some new Fiber Optic services. If you are looking for guaranteed upload and download speeds with service level agreements, you are probably looking for a dedicated circuit. Dedicated circuits start at higher price point (usually north of $400/mo) and often require a long term contract, but they are the solution of choice for businesses where internet is mission critical.

Type of phone system: We decided to explore a Voice over IP (VoIP) phone system which offered us a few key benefits. First off we could avoid an investment in a PBX and instead pay a monthly fee for a full featured business phone (the price is in neighborhood of $30 per phone including voice mail and all the bells and whistles). VoIP phones also offered some flexibility for us in terms of growth – plugging in a new phone for a new employee is simple and does not require a technician visit. The VoIP features are great, but we have discovered that we have lost some of the reliability of a traditional phone line, and our initial experiment using VoIP phones connected to our DSL proved unsatisfactory. We ultimately decided to order VoIP service from SpeakEasy who also provides our T-1 connection – we now have one party controlling the quality of the service and that seems to have made a difference.

Last updated: 09.23.2010 03:47 PM

Anderson Home Inspection Newsletter, Must Read

Posted by: Darren A.

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Last updated: 08.31.2010 05:39 AM

http://creGROW.com

Posted by: Dave L.

let your commercial real estate website grow.

Last updated: 08.15.2010 03:35 AM

New Home / First Time Buyer Credits in California

Posted by: Crestico I.

 The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010.

Applying for the 2010 New Home/First-Time Buyer tax credits: Applications must be faxed after escrow closes. The new application will be available by May 1, 2010. We will deny the application if the 2009 form is used or if we receive the 2010 application before May 1, 2010.

General Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.

Only one tax credit is allowed per taxpayer, and they will be allocated on a first come, first serve basis. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

 

Taxpayers will not be eligible for either tax credit if any of the following apply:

- The taxpayer was allowed a 2009 New Home Credit.

- The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)

- The taxpayer or the taxpayer’s spouse/RDP is related to the seller.

- The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

 

New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:

- Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been “purchased.”

- Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.

- Be eligible for the California property tax homeowner’s exemption.

- Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

 

Tax credit allocation:
A Certificate of Allocation will not be issued if:

The seller does not certify the home has never been occupied.

- The Franchise Tax Board does not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.

- The Franchise Tax Board receives the application or reservation request after the total tax credits available have been allocated.

 

First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

- Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been “purchased.”

- Be eligible for the California property tax homeowner’s exemption.

- Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

A first-time buyer is any individual (and the individual’s spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence. If the buyer is married on the date of purchase and either the buyer or the buyer’s spouse/RDP had an ownership interest in a principal residence during the preceding 3 year period, the buyer does not qualify for the First-Time Buyer Credit even if the spouse/RDP is not going to be on title.

Tax credit allocation:
A Certificate of Allocation will not be issued if:

- The Franchise Tax Board does not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.

- The Franchise Tax Board receives the application after the total tax credits available have been allocated.

Applications: The Franchise Tax Board will accept applications by fax only beginning May 1, 2010. Do not use the 2009 application.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached, as a reservation will “hold the taxpayer’s place in line” until 2 weeks after escrow closes. To reserve a tax credit, the taxpayer and seller need to complete, sign, and fax to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. Taxpayers who reserve a tax credit still need to fax an application and a copy of the settlement statement within 2 weeks after the close of escrow. Taxpayers may not reserve a tax credit if the contract was entered into before May 1, 2010. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

The taxpayer must receive a Certificate of Allocation from the Franchise Tax Board to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.

The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).

Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.

If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.

The tax credit may not reduce regular tax below TMT.

The tax credit is not refundable.

Any disallowance of the tax credit may not be protested or appealed.   Mitra Karimi Crestico, Inc. mitra.karimi@crestico.com http://www.crestico.com

Last updated: 08.09.2010 06:53 PM