Commercial Real Estate on the Road to Recovery says NAR

NEW ORLEANS (November 7, 2014) – While economic activity was mixed during the first half of the year, industry experts expressed confidence that the commercial real estate market is on the rise during the Commercial Economic Issues & Trends Forum at the 2014 REALTORS® Conference & Expo.

National Association of Realtors® Chief Economist Lawrence Yun joined leading investment experts during a panel discussion about recent trends in commercial real estate markets. The panelists agreed that the improvements seen in the economy as a whole will spur the commercial market forward.

“The commercial real estate market ordinarily recovers two years behind the economy but not this cycle,” said Yun. “It has taken four years and, fortunately, this year we turned a corner.”

In particular, increases in job creation will have a significant impact on commercial practitioners. “More jobs mean more demand for office space, warehouse space, retail spaces and other commercial spaces. With the economy expanding, commercial activity should be rising,” said Yun. “However, do not expect the recovery to occur over night. It will not be a big bang; it will be a steady and gradual increase in demand.”

Richard M. Gatto, executive vice president of The Alter Group, expressed a similar sentiment. “We are going to slowly work our way out of this,” said Gatto. “The need for office space is really just starting to become apparent, and multifamily units are still going strong.”

According to NAR data, commercial members receive a majority of their financing from regional and local banks, as well as credit unions. Fifty-five percent of Realtors® said they have had difficulty receiving credit from these institutions, mostly due to government regulation. “The number of members asserting financing difficulties is down from 2013,” said Yun. “So it would appear that banks are slowly adjusting their credit standards closer to normal.”

Multifamily units were also a popular topic of discussion among the panelists. With rent prices continuing to rise and vacancy rates continuing to decline, all of the panelists agreed that the market should continue to see growth well into 2015 and beyond.

“The general trend is decreased vacancy and increased rent growth,” said Yun. “For Realtors® specializing in commercial real estate this means that if this year was good, next year should be better.”

The trend is also seen in office buildings. “There is a tremendous amount of urbanization occurring. In many areas, suburbs are beginning to be folded into the city centers,” said Gatto. “This change is being driven by employers who are seeking millennial-aged employees and are following younger workers to urban centers and forgoing traditional suburban offices.”

Other panelists included Andrew H. Trotter, III, chief investment officer for Centennial Holding Company, and Donald E. Huffner, managing director for AIG Global Real Estate.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

ALS Ice Bucket Challenge - LKR Style!

SUNDAY, NOVEMBER 2, 2014

LKR ALS Ice Bucket Challenge

The ALS Ice Bucket Challenge is a fun way to fund raise and bring awareness to a very sad, destructive disease.  A challenger challenges, and the challenged may either dump a bucket of ice water on their heads, or contribute money to ALS.  There have been many funny, creative and meaningful challenges, but this is our version after being challenged by a local real estate company.  We recorded it on an iPhone and raised over $900 for ALS.  We didn’t let it stop there.  We sent the challenge on to another local real estate company.  As of October 3, 2014, ALS has raised over $115 Million

The BEST Real Estate Company

FRIDAY, SEPTEMBER 12, 2014

What is the BEST REAL ESTATE COMPANY, or the BEST REAL ESTATE AGENT? The truth is there isn’t one! Many companies and agents proclaim that they are the best, but sadly, no one is. The reality is that among the 395 agents and 55 offices that serve this area there are strengths and weakness for all candidates.
So, if we can dispense with hyperbole, let’s drill down a bit and see what qualities are admirable and desirable in a company or agent. Many will claim that the top position belongs to the top seller in terms of volume of sales and leases of real estate. There is some truth to this, as sales volume is a good measure of whom else has “voted” with their allegiance for this company or agent, but there is certainly more than sales volume to consider. Some say the average price per sale, or the average time on the market are good indicators of real estate prowess. An interesting concept, but again, not conclusive. Longevity in the industry is touted again as an accurate measure of quality, but it may just be an accurate measure of age!

I believe I can add some clarity. A real estate agent is going to guide you through something that has high monetary stakes and is intensely personal at the same time. If you pick the wrong home, investment, mortgage, or commercial location you don’t get an automatic “do over”. Clients need expert, intelligent help to make good decisions the first time. A good agent will listen to what you say and what you don’t say. A good agent will have experience to guide you around unseen pitfalls to the right decision for you. A good agent puts your interests above all others, including their own, and serves you to meet your goals. A good agent can say yes, or no. A good agent has integrity to tell you what they believe, even if you prefer not to hear it, and then do what you ask them to do. A good agent will often make the process look simple and easy, even when it is complicated and difficult. A good agent is worth having.

The Iowa City area is blessed with many, many good agents. Some markets are not, but we are fortunate in this regard. Look for a company, or an agent that someone else says is the best. Be a little wary when they say they themselves are the best!

Iowa Business Property Tax

SATURDAY, NOVEMBER 30, 2013

I just received this notice from the Iowa City / Johnson County Assessor’s office regarding a tax rebate for commercial property in the county.  There is a quick deadline, January 15, 2014 for filing, so do not delay.  Please let me know if you need the forms, or use the links in the notice.  Good luck!

See the full reprint below:

Iowa Business Property Tax Credit

A new Iowa Business Property Tax Credit is available to certain commercial, industrial and railroad property.  One credit is available for each qualified property unit.  A property unit consists of a single parcel or contiguous parcels of the same classification that are owned by the same person and operated by that person for a common use and purpose.  Applications for credit against 2013 property tax assessments must be received by the county or city assessor by January 15, 2014.  The Legislative Services Agency has estimated that the first year credit amount could be as much as $523.

Properties that are not eligible for the credit include:

• Agricultural property
• Residential property
• Property that is rented or leased under Section 42 (low income) housing
• Hotels, motels, and inns in which rooms are rented for more than 30 days at a time
• Mobile home parks
• Manufactured home communities
• Land leased communities
• Assisted living facilities
• Nursing homes
• Property that is primarily used or intended for human habitation

Applications are attached and also available here: Business Property Tax Credit Application

The county assessor has applications available within the property search: County Assessor Property and Tax Information.

The Iowa Department of Revenue has a question and answer section, as well as applications at this link: http://www.iowa.gov/tax/locgov/13PTReform.html.

Please contact your assessor if you have any questions.

Iowa City Assessor’s Office                           Johnson County Assessor’s Office

319-356-6066                                                  319-356-6078

Commercial activity checkup Q1-2013

It’s April 15, 2013, tax day, and let’s take a look at the commercial sales and leasing activity in the Iowa City / Coralville area market.  So far, there have been 27 leasing and sales transactions.  27 leasing and sales transactions doesn’t really seem like many in 104 days.  Last year at this time there were just 36 similar transactions, so the volume is not that different from last year.  The makeup of the transactions is interesting.  3 are commercial land sales, 6 are retail leases / sales and 18 are office leases / sales and there have been no industrial sales / leases.  In a small market like the Iowa City / Coralville area each transaction represents 4% of the market activity, so one has to be cautious about making generalizations from small data sets, but office seems to be king so far in the area!

Last year (2012), there were a total of 127 transactions in the area, 13 were land sales, 26 were office sales / leases, a whopping 58 were retail sales / leases and 30 were industrial sales / leases. All transactions are healthy for the market but all indicate different trends

Tim Terry and Todd Helle inform at CRT

Tim Terry and Todd Helle, partners at Terry, Lockridge and Dunn Accountants and Business Consultants presented the new tax law changes and more to the Iowa City Area Association of Realtors Commercial Round Table committee.  The presentation was fact filled and specific and actually very interested and well presented.

There was investor concern at the end of 2012 about dramatic tax law changes with regard to treatment of real property taxation.  The TLD team said the actual changes were minor on January 1st, but hold on to your wallet, there are some serious changes to tax law in Congress.  The nominal rates will go down, but deductions and special treatment will vanish!  The overall effect is the changes being contemplated in Congress will raise needed tax revenue much more than the fairly minor changes in top tax rate and capital gains rate already passed.

Brooke Bonk Joins Edberg Team as intern.

Brooke Bonk takes time from her studies at Tippie College of Business to tackle research and marketing for the Edberg Team at Lepic-Kroeger, Realtors in Iowa City!
Brooke is a junior at the University of Iowa pursuing a BBA in Marketing as well as certificates in Entrepreneurial Management and Leadership Studies. Her internship on the Edberg Team at Lepic-Kroeger, Realtors begins in April, 2013 and we are thrilled to have such a talented student join us and help with keeping all the details together.  Brooke will be involved in certain aspects of marketing, as well as a statistical research project mapping out commercial properties in Iowa City, Coralville and Johnson County.
 Brooke grew up 20 miles outside Chicago in Des Plaines, Illinois and returns home to visit my wonderful family; her mother, grandmother, sister, and two cats- as often as her schedule allows. She is also involved in many extra curricular activities such as travel, music and, of course, cheering on the Hawkeyes!
 During the past few years Brooke has worked as a special education teacher assistant, sales associate, event planner for the university, and marketing assistant for a local start-up company.  These experiences in addition to her excellent academic record, qualify her for this internship.  We look forward to working with Brooke and helping her apply some of her knowledge and ability in a business setting and whish this strong student well in all of her endeavors.