E-Newsletter - November 2014

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    Sacramento Association of REALTORS®

 

  COMMERCIAL REPORT

November 2014

In This Issue
Community Commercial Real Estate Calendar
Reminders
California Business
Economic Development
AB1897
Split Roll Tax
Brown's Turnaround Plan
A Great PAC
Real Estate Lobbying $
Free Exchange Service
Importance of Consultants
Negotiating Principals
Technology Products
Cap Rate Trends
MORE INFO...

 www.saccommercial.org

 

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SAR Commercial Members
Call Tony to schedule your free Advice/Mentoring Session at 916-437-1205

Center for California Real Estate, all day summit titled "Partnering change in California" on November 14th is well worth the effort to listen too. This summit gathered an impressive collection of real estate financial experts and economists to discuss market conditions in California real estate. Years ago, it was stated that the Bay Area boom would hop over Sacramento to the L.A. area. Has L.A. reached saturation or will Silicon Beach grow stronger?

Watch the On Demand Video »

Dan Creegan and Heather Johnson with Trainor Fairbrook provided an insightful presentation on the changes in the laws regarding agency disclosure that go into effect Jan. 2015 for commercial agents.(SB 1171) The Trainor Fairbrook law firm has prepared a form that is available on their website for your use. During Nov's Legal Lunch also reviewed several court cases addressing dual agency and fiduciary responsibilities. The BRE has been focused on dual agency issues and Dan warns that BRE complaints are not covered by your E and O insurance.


Every first Thursday Legal Lunch, SAR Commercial hosts a commercial legal forum on various subjects in commercial real estate for the accomplished commercial agent. The Law is not a static subject and best practices are constantly changing in all areas of our industry. The Legal Lunch is a pleasant way to stay informed and touch base with a few old friends.

 

December's forum is December 4th will address legal entities, their pros and cons and the taxable consequences. "Who signs and how to hold" Legal and Taxable consequences will be presented by Steven Stwora-Hail and Neil Beeman, CPA to learn the benefits and pitfalls of business entities and the safe guards necessary to make sure your lease hold interest is solid.

 

COMMUNITY COMMERCIAL REAL ESTATE EVENTS

 

11/14 - Metro Chamber State of Sacramento County 11:30 Hyatt

11/17 - BOMA - Capital Bowl

11/19 - ICSC webinar - Enhancing the consumer experience

11/19 - IFMA meeting at Franklin Templeton

11/20 - ICSC Urban Retail and Redevelopment online

11/20 - ACRE Developer Showcase Hyatt - 5:30

11/20-21 - ICSC Napa Idea exchange

12/1 - CCIM Financial Analysis Tools- online

12/2 - CCIM Virtual Deal Making

12/2 - CCIM Creating Reliable Valuations Online starts today

12/2 - ULI Holiday party - Ella

12/4 - THE LEGAL LUNCH - Steve Stwora-Hail 2003 Howe Ave 11:00 Legal and taxable consequences of who signs

12/5 - BOMA Holiday Party

12/5 - SIOR Holiday Party S.F

12/8 - CCIM - Fundamentals of Real Estate Auctions online

12/9 - Investment Forum - Doubletree 7:30 am

12/9 - Nor Cal CCIM Holiday luncheon Oakland

12/9 - CCIM Disposition Analysis online

12/9 - BIA Holiday Party - Firehouse

12/10 - ULI Economic Forecast Breakfast - Sutter Club 8-10

12/10 - BIA - Google analytics 9:00 BIA Offices

12/11 - IREM Holiday Party- Fire house

12/11 - Recon Mixer 5:30 Strings 1500 7th Street

12/11 - IFMA Holiday Party

12/17 - CCIM - HP 10bII skills online

12/19 - The Sacramento Exchange Group - Citrus Heights

1/7 - NAIOP - Leasing Marketing & Negotiation online thru 3/4

1/8 - NAIOP - Financial Analysis online thru 2/26


Next Year's Key Dates:

2/10-2/12 - CCIM Real Street conference - Las Vegas

3/11-3/12 - ICSC Monterey

3/19 - ACRE Broker of the Year Awards

4/12 - 4/14 - NAIOP National Forum - San Francisco

5/17-5/20 ICSC - Las Vegas

Each month, first Thursday - Legal forum

  
  
Legislative Reminders:

 

  1. All commercial agents required to have clients sign an agency disclosure agreement effective next year. (SB 1171) Sample form available at Trainor Fairbrook
  2. Insurance certificates new language will nolonger require the producer to inform a holder of the cancellation of the policy.
  3. New laws pertaining to contract labor pass on HR responsibilities to the recipient of services (AB 1897)
  4. Notices of Non Responsibility no longer protect the property owner from liens. Consult your attorney on best practices pertaining to tenants completing construction projects on leased property.

 

California is OPEN for Business

 

Learn the six top reasons why California is a great place for businesses to invest. This publication also summarizes the state's investment assistance programs and its tax structure. Visit Cal ED

 

Economic Development Rrequires a Community Effort

During the second week of October, over 100 representatives from six counties and 22 cities from the Sacramento region embarked on an educational trip to Nashville, Tenn., with the Sacramento Metro Chamber of Commerce's 2014 Study Mission. One thing became clear during my weeklong trip: Nashville's business community is highly invested in educational opportunities and outcomes. The city's education system has benefited by leveraging resources from the business community. The business community in turn benefits from workforce quality and retention, which is an ideal model for the Sacramento region to emulate. "The business community cannot dabble in education," Nashville Area Chamber of Commerce's Ralph Schultz told us. "You either go all in or you don't do it. Otherwise it will be the most frustrating experience you've ever had." Here's how the Nashville Chamber has succeeded in influencing educational outcomes and how Sacramento can learn from its successes: Read more »

AB1897 Means Greater Liability For Employers

On September 28, 2014, Governor Jerry Brown announced the signing of Assembly Bill 1897, which amends Labor Code section 2810 by creating a new Labor Code section 2810.3.

The new law targets businesses that obtain or are provided "workers to perform labor within its usual course of business from a labor contractor." The statute's definition of "labor contractor" excludes bona fide nonprofits, bona fide labor organizations, apprenticeship programs, hiring halls operated pursuant to a collective bargaining agreement, and motion picture payroll services companies.

Once AB 1897 becomes effective, private employers will be unable to deny liability for labor contractor's failure to pay all required wages[1] or to secure valid workers' compensation coverage for contract workers. Employers using the labor services will now "share with the labor contractor all civil legal responsibility and civil liability for all workers supplied" to the company. Read more »

Leave Prop. 13 Alone

Raising property taxes will mean death for small business Back Commentary – Nov 6, 2014 By Jon Coupal

California's business climate is well-known for being unfriendly. CEO Magazine has rated California as the worst state in which to do business for more than eight years running. Undoing Proposition 13's provisions, as is currently being proposed, will make a big problem even worse by increasing taxes on the very businesses that create jobs and contribute to our economy. California small businesses failed at rates 69 percent higher than the national average in 2011. Of the top five metropolitan areas for small business bankruptcies, four are in California. We also struggle with one of the highest unemployment rates in the nation and have a higher poverty rate than Mississippi. Yet despite these figures, Sacramento politicians think now is the time to make it more expensive to run a business. Proposals to increase business property taxes threaten to make it even tougher for the tens of thousands of small businesses in this state to hire workers and contribute to their local communities.

Read more »

How Governor Brown Cultivated a Complete Turnaround of the CA Business Climate

Corporate executives who have not considered investing in California for a long time suddenly have new reasons to do so. Fresh off four years of painstakingly adjusting public policy to make California more business-friendly, Governor Jerry Brown is now rolling out the welcome mat to expanding companies with a new set of tools in his recruitment arsenal. Armed with new tax credits, more funding for economic development, balanced budgets and improved credit ratings, California now competes for jobs and industry without the burden of financial shackles, and the results speak for themselves: Is it enough?

Legislation Political Action

RPAC Supports Commercial Real Estate Issues at Local, State, and Federal Levels by Elizabeth Giovaniello

The Realtors Political Action Committee, or RPAC, and the Realtor Party may sound like "D.C. things," but they're much more than that for CCIM members, says Leil Koch, CCIM, 2014 chair of the National Association of Realtors Commercial Committee and 2012 CCIM Institute president. "RPAC and the Realtor Party work on all three levels of government – federal, state, and local – to create a strong business environment for all of us," Koch explains. "From tax policies to zoning issues to water rights to electrical grids – you name it and it's affecting our business as CCIMs. RPAC and the Realtor Party are there for us at every turn." Stand Together

Lobbying Dollars For the Real Estate Industry Tops 71 Million

Where do the dollars come from? Who is working the hill? No longer a secret. Read more »

Among the most noteworthy of the findings may be the percentage of properties sold within the first six months of hitting the market. That benchmark has remained flat during the uneven and spotty recovery, even as market fundamentals have improved and bank lending has strengthened considerably. As a result, overall pricing for commercial real estate has appreciated since mid-2010.

CompStak Exchange Transforms the Commercial Real Estate Industry

 

The tight and highly competitive net lease market may see a slowing of activity due to a recent rise in interest rates, a trend that some expect to continue for some time to come.

Today, commercial real estate tech start-up CompStak launched CompStak Exchange, a new platform of the lease comp database platform free for commercial real estate brokers, researchers, and appraisers. CompStak Exchange features enhanced functionality to facilitate the exchange and analysis of lease comps, with an ability for multi-market companies to adopt the system for lease comp management across markets. More info »

Podcast

 

Collaboration is a powerful way to add value to your engagements with clients, reminds Bob Rosenberg, CCIM, founder of InvestNet. Learn more about best practices for hiring and strategies to ensure that you and your team are accountable to your goals. Hear the interview »

The 5 Principles of Gaining Agreement

Learn how to use logic, power, emotion, trade, and compromise to strengthen your relationships with clients and close more deals, by Barry Elms

There is nothing more satisfying in real estate than that moment when the client says, "We have a deal." It's that moment when all your hard work and tireless effort finally comes to fruition. Whether it took days, weeks, or even months to get agreement, one thing's for sure: It didn't happen by accident. But how did it happen? What were the factors that determined the outcome? Why did this deal work when others did not? I agonized over these questions for several years after I opened my first business. I needed to know why some deals worked and others didn't. The survival of my business literally depended on it. To help me understand why some people agreed quickly or eventually, while others never agreed to buy, I decided to do an autopsy on past deals. I discovered, much to my surprise and delight, that all of my interactions with clients and prospective clients were subject to a series of elements I like to call "the five principles of gaining agreement." Learn the five steps »

How Virtual Reality and Other Technologies Will Disrupt Real Estate by Patrick J. Kiger

While commercial real estate has occasionally lagged behind other business sectors in use of emerging technologies such as three-dimensional virtual reality environments and real-time data mining, panelists at the ULI Fall Meeting said such advances promise to reshape how developers and property managers function. "Developers haven't traditionally allocated budget for software," said panel moderator Jared Kushner, founder and chief executive officer of New York development firm Kushner Companies. "But now it's exploding." Kushner said he recently donned a helmet made by Oculus VR, a cutting-edge virtual reality gear maker acquired by Facebook, to take a virtual-reality tour of Related Companies' Hudson Yards development. "It made me dizzy," Kushner noted, "but it was cool."

To executives accustomed to thinking of their business as bricks and mortar rather than data, such technology might seem like just a novelty. But Dave Eisenberg, founder and chief executive officer of 3&ndashD modeling firm Floored, who convinced Kushner to put on the helmet, has closed 80 engagements this year with developers who see the value of being able to visualize and even explore projects before they are built. Eisenberg said his company's software, which converts 2–D plans into a 3–D environment, allows viewers to look at everything from window views to how different sorts of flooring and ceilings would look. He said the software can even allow developers to see which trees could be put in landscaping.

Eisenberg said that while such emerging technologies "can go down a rabbit hole of being cool for cool's sake," a strong case can be made that 3–D visualization will make for better projects and control costs because design flaws can be spotted and fixed in advance. But it also promises to boost leasing velocity because it enables tenants to see how they would fit into a space and to adapt it to suit their requirements. "Shouldn't every leasing presentation in the future be customized to the tenant you're talking to?" Eisenberg asked. "These are things you can do with virtualization."

Riggs F. Kubiak, founder and chief executive officer of Honest Buildings, touted his company's web-based marketplace for various construction specialties, ranging from electrical contractors to structural engineers, which has been called a cross between Linkedin and Yelp for building professionals. Kubiak said the site, which allows developers to find contractors who worked on various buildings and evaluate their backgrounds for relevance to a new project, has the potential to dramatically reduce costs as well. "If I'm looking for an architect with experience in ground-up lobby work and renovation in Brooklyn, I can find him," Kubiak explained. "I can make a decision based upon the relevant experience of that team." Honest Buildings' database, which lists 10,000 contractors in the New York area, uses publicly available data from permits and other sources to build out the profiles. "We can see a very rich project history," Kubiak said. "You also get price intelligence and efficiency…We've really rethought the way decisions are being done." More info »

Cap Rate Trends

October report on Office, Apartments and Retail. Stay up on the market »

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