Thursday, June 3, 2010
Promenade at Coconut Creek Class "A" Office Building
Promenade at Coconut Creek is a 23-acre mixed-use project with upscale shopping, living and working office venues in the city of Coconut Creek and is one of South Florida's most progressive, environmentally-friendly centers. The center, which will be a focal point of Coconut Creek's newly created downtown, has received a LEED Silver certification, designating it as one of the first major developments in the Southeast U.S. to meet high standards for environmentally-responsible design. With over 45 brand name stores, boutiques and restaurants. Located at the Corner of Lyons and Wiles Road, Just South of the Sawgrass in Coconut Creek, FL Join AllState in the brand new Class "A" office building with Free Covered Parking! Come check out our pre built spec office suites ready for immediate occupancy! The Landlord has said they will try to make every deal! To see the Promenade at Coconut Creek Office Building contact Keith Darby @ 305-720-7925.
Tax Extenders and Carried Interest to Senate Vote
CCIM Institute Call to Action
Tax Extenders and Carried Interest
On May 14, 2010 CCIM Institute initiated a Call to Action regarding the Tax Extenders Package that included the change in tax treatment of carried interest. Last Friday, May 30, the U.S. House of Representatives passed the tax package bill, renamed the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213). The bill narrowly passed by a vote of 215-204 and will now go to the U.S. Senate, where deliberation will begin as early as June 7.
Along with increasing the tax rate on carried interest to 39.5% from its current rate of 15%, the legislation includes provisions that would extend long-term unemployment benefits and renew various business tax breaks through 2011, such as a research and development credit. Regarding carried interest, new language was added that would subject 75% of general partners’ profits to the new, higher tax rate in 2013, while 50% of partners’ profits would be taxed the higher rates immediately upon its effective date. Additionally, the effective date of the carried interest provision was postponed to Jan. 1, 2011, instead of the original date of Jan. 1, 2010.
Despite the postponement of the effective date, it is extremely important to completely remove this carried interest tax increase language from the bill. The commercial real estate industry will be severely impacted by the proposed increase on carried interest income and your efforts are needed to ensure that this language is swiftly removed from the tax extenders package legislation. CCIM Institute legislative staff encourages all members to act quickly contacting their U.S. Senators and requesting they vote against this bill. It is imperative that our Senators understand the impact this legislation will have on the commercial real estate industry.
History of Carried Interest Income Real estate partnerships are often organized as limited partnerships in which the limited partners provide capital and the general partner(s) provides operational expertise. When a partnership property is sold, the limited partners generally reap the profits in proportion to their capital investment. Often, however, the limited partners grant a profits interest to general partner(s). This profits interest is known as a "carried interest." A carried interest is designed to act as an incentive for a general partner to maintain and enhance the value of the real estate so that the operation of the property is a value-added proposition.
In order to extend the tax cuts, Congress is seeking new revenue sources to fund the extensions. Included in the current legislation is a provision to change the tax treatment on carried interest from capital gains to ordinary income. Currently, the capital gains rate is 15%. Changing the tax treatment to ordinary income would raise tax rates on carried interest to 39.5%.
Changing the tax treatment of carried interest would be detrimental to commercial real estate because taxing the general partner at an ordinary income rate would create a disincentive for real estate investment, further damaging an already fragile market.
We urge all members to immediately contact their Senators and tell them you oppose the change in tax treatment of carried interest included in The American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213). This matter is extremely time sensitive, so immediate contact with your U.S. Senator is imperative. How to contact your Senators:
1. Look up your members of Congress and their contact information at the following website: www.congress.org.
2. Introduce yourself in a sentence or two. For instance: "I am a constituent and a commercial real estate professional who…"
3. Use the bullets (below) to argue your point. You are encouraged to add your own examples.
4. If you will be faxing your legislators, print your letter on your company letterhead.
5. After contacting your legislators, please contact the CCIM Institute legislative liaison at jnorwich@cciminstitute.com or 312-329-6033.
Call to Action Discussion Points
Carried Interest Discussion Points:
• Approximately $1 trillion of commercial and residential rental real estate is held privately in America today. The great majority of these properties are held by partnerships. Changing the tax rates on carried interest from capital gains rates to ordinary income rates would be devastating to these businesses.
• In 2007, real estate made up the largest category (48%) of partnerships, representing $4.4 trillion in investments.
• Real estate investments are designed as long-term investments. The capital is "patient" because property owners take major risks and hold the asset for long periods of time before seeing a gain, thus should be taxed at capital gains rates.
• Unlike hedge fund managers, capital gains treatment for general partners involved in real estate partnerships is an appropriate incentive for risk taking. The direct risks include environmental issues, loan guarantees, and lawsuits, to name a few.
• Drives investors to put their money elsewhere such as stocks with much more favorable tax treatment. Creates a disincentive to invest in real estate since many would no longer earn a reasonable profit.
• Stifles growth in a part of our economy that has become increasingly important over the last several years due to manufacturing, call centers, and other key industries moving offshore.
• Punishes partners involved with prior arranged transactions by causing a totally different economic result than all partners agreed with in advance. This has been characterized as a drastic change in tax rules and could be devastating to the industry.
• Fails to recognize that real estate investors are involved in their investments daily, while hedge fund managers are not involved daily in their investments.
• The real estate industry, in all its commercial, multifamily, and individual investment categories, is very fragile at present and is likely to remain so. These new tax burdens on real estate owners will impair and delay further recovery.
Carried interest rates from 15% to 39.5% - no thanks!
Please contact Keith Darby @ 305-720-7925 should you require his commercial real estate services.
On May 14, 2010 CCIM Institute initiated a Call to Action regarding the Tax Extenders Package that included the change in tax treatment of carried interest. Last Friday, May 30, the U.S. House of Representatives passed the tax package bill, renamed the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213). The bill narrowly passed by a vote of 215-204 and will now go to the U.S. Senate, where deliberation will begin as early as June 7.
Along with increasing the tax rate on carried interest to 39.5% from its current rate of 15%, the legislation includes provisions that would extend long-term unemployment benefits and renew various business tax breaks through 2011, such as a research and development credit. Regarding carried interest, new language was added that would subject 75% of general partners’ profits to the new, higher tax rate in 2013, while 50% of partners’ profits would be taxed the higher rates immediately upon its effective date. Additionally, the effective date of the carried interest provision was postponed to Jan. 1, 2011, instead of the original date of Jan. 1, 2010.
Despite the postponement of the effective date, it is extremely important to completely remove this carried interest tax increase language from the bill. The commercial real estate industry will be severely impacted by the proposed increase on carried interest income and your efforts are needed to ensure that this language is swiftly removed from the tax extenders package legislation. CCIM Institute legislative staff encourages all members to act quickly contacting their U.S. Senators and requesting they vote against this bill. It is imperative that our Senators understand the impact this legislation will have on the commercial real estate industry.
History of Carried Interest Income Real estate partnerships are often organized as limited partnerships in which the limited partners provide capital and the general partner(s) provides operational expertise. When a partnership property is sold, the limited partners generally reap the profits in proportion to their capital investment. Often, however, the limited partners grant a profits interest to general partner(s). This profits interest is known as a "carried interest." A carried interest is designed to act as an incentive for a general partner to maintain and enhance the value of the real estate so that the operation of the property is a value-added proposition.
In order to extend the tax cuts, Congress is seeking new revenue sources to fund the extensions. Included in the current legislation is a provision to change the tax treatment on carried interest from capital gains to ordinary income. Currently, the capital gains rate is 15%. Changing the tax treatment to ordinary income would raise tax rates on carried interest to 39.5%.
Changing the tax treatment of carried interest would be detrimental to commercial real estate because taxing the general partner at an ordinary income rate would create a disincentive for real estate investment, further damaging an already fragile market.
We urge all members to immediately contact their Senators and tell them you oppose the change in tax treatment of carried interest included in The American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213). This matter is extremely time sensitive, so immediate contact with your U.S. Senator is imperative. How to contact your Senators:
1. Look up your members of Congress and their contact information at the following website: www.congress.org.
2. Introduce yourself in a sentence or two. For instance: "I am a constituent and a commercial real estate professional who…"
3. Use the bullets (below) to argue your point. You are encouraged to add your own examples.
4. If you will be faxing your legislators, print your letter on your company letterhead.
5. After contacting your legislators, please contact the CCIM Institute legislative liaison at jnorwich@cciminstitute.com or 312-329-6033.
Call to Action Discussion Points
Carried Interest Discussion Points:
• Approximately $1 trillion of commercial and residential rental real estate is held privately in America today. The great majority of these properties are held by partnerships. Changing the tax rates on carried interest from capital gains rates to ordinary income rates would be devastating to these businesses.
• In 2007, real estate made up the largest category (48%) of partnerships, representing $4.4 trillion in investments.
• Real estate investments are designed as long-term investments. The capital is "patient" because property owners take major risks and hold the asset for long periods of time before seeing a gain, thus should be taxed at capital gains rates.
• Unlike hedge fund managers, capital gains treatment for general partners involved in real estate partnerships is an appropriate incentive for risk taking. The direct risks include environmental issues, loan guarantees, and lawsuits, to name a few.
• Drives investors to put their money elsewhere such as stocks with much more favorable tax treatment. Creates a disincentive to invest in real estate since many would no longer earn a reasonable profit.
• Stifles growth in a part of our economy that has become increasingly important over the last several years due to manufacturing, call centers, and other key industries moving offshore.
• Punishes partners involved with prior arranged transactions by causing a totally different economic result than all partners agreed with in advance. This has been characterized as a drastic change in tax rules and could be devastating to the industry.
• Fails to recognize that real estate investors are involved in their investments daily, while hedge fund managers are not involved daily in their investments.
• The real estate industry, in all its commercial, multifamily, and individual investment categories, is very fragile at present and is likely to remain so. These new tax burdens on real estate owners will impair and delay further recovery.
Carried interest rates from 15% to 39.5% - no thanks!
Please contact Keith Darby @ 305-720-7925 should you require his commercial real estate services.
Wednesday, June 2, 2010
Coral Gables Office Market June 2010
With increased competition from downtown Miami and Brickell office markets, where two new towers are adding 1.6 million square feet of Class “A” office space, leasing rates in Coral Gables are heading further south.
Gables rates are still competitive. Average asking rates there for class A space is $36.86 per square foot, slightly lower than both downtown and Brickell/. The Gables' total vacancy now is 19.6% — higher than downtown's 16.6% and Brickell's 15.9%. But that could change once Met2 Financial Center and 1450 Brickell open as each project has a lot of space to fill.
One of the largest transactions that has occurred within the last four quarters in the Miami-Dade County market is the sale of Bacardi Building in Coral Gables to the Ponte Gadea Group. This 251,464-square-foot office building sold for $120,000,000, or $477.21 per square foot. The property sold on 12/3/2009.
Office leasing activity in Coral Gables has definitely picked up since first quarter of last year. Among leases closed in the Gables in the first quarter were Carolina First Bank, d/b/a Mercantile Bank, leased 18,767 square feet at 255 Alhambra Circle. Law firm Colson Hicks Eidson is to occupy the 17,000-square-foot penthouse previously occupied by BankUnited in that building, and the Consulate of Barbados is moving within the Gables to the 13,000-square-foot penthouse at 2121 Ponce de Leon Blvd.
The fact that there is no new office product being delivered this year is helping to fill some holes in the Coral Gables office market. Nearby, Allen Morris Co. is also moving ahead with its Ponce de Leon Towers, a 210,000-square-foot luxury office building that's part of seven-acre Old Spanish Village.
The Gables-based company is going through the last project approvals before moving forward with plans and has two tenants committed, including itself and The Rockefeller Group. Mr. Morris has said he plans to begin construction by year's end to complete the 16-floor project by the end of 2012.
The new projects central location and high-end amenities have caught the attention of several large-scale banks said to be shopping for office space that are eyeing the Gables. Mercantil Commercebank is looking for a 100,000-square-foot space, Gibraltar Private Bank & Trust is searching for 60,000 square feet and TotalBank has been touring the Gables and downtown for a 50,000-square-foot headquarters.
One of my clients has been considering purchase opportunities in the Gables and here are the comps that were identified for Coral Gables class A & B office buildings between 5,000 – 25,000 rentable square feet sold within the last year.
312 Minorca: Class “B” Office Building The remodeled free standing 1950 Coral Gables 2 story Office Building in the Heart of the Gables Business District, which has 7 parking spaces, 7,899 Sq. Ft sold for $3,000,000 or $380 per square foot. Merrick View Office Condo: Bayview Financial sold 6 commercial condominium units at Merrick View, located at 135 San Lorenzo Avenue in Coral Gables, to a Fairchild Merrick View, LLC, a private investor, for $2.4 million on April 16, 2010. The units, which total 9,373 square-feet, are 100% leased to tenants. The actual cap rate was reported by the seller to be 8%. The NOI, given the cap rate, would be $192,000. This was an all-cash deal under contract for 30-45 days. 301 Almeria Ave - Class “B” Office Building The subject property located at 301 Almeria Ave Coral Gables,Fl 33134 sold in a Owner User sale for $2,980,000 or $181.77 per square foot. Reportedly, the sellers were off-shore second generation owners looking to sell. The buyer is an attorney (ACOSTA STROMMEN - Julio Acosta ) who processed an SBA loan and will occupy space at the location. There was no cap rate, and the property was 50% vacant at the time of sale. 2850 Douglas - Class B Office building Another owner/user - Professional Translating Services, Inc. occupying building sold at $4,250,000 or $183.11 per square foot. Owner occupants could be eligible for SBA 504 financing, which would business owners to obtain 90% financing.
Please call me @ 305-720-7925 if you are interested in Keith Darby’s services.
Gables rates are still competitive. Average asking rates there for class A space is $36.86 per square foot, slightly lower than both downtown and Brickell/. The Gables' total vacancy now is 19.6% — higher than downtown's 16.6% and Brickell's 15.9%. But that could change once Met2 Financial Center and 1450 Brickell open as each project has a lot of space to fill.
One of the largest transactions that has occurred within the last four quarters in the Miami-Dade County market is the sale of Bacardi Building in Coral Gables to the Ponte Gadea Group. This 251,464-square-foot office building sold for $120,000,000, or $477.21 per square foot. The property sold on 12/3/2009.
Office leasing activity in Coral Gables has definitely picked up since first quarter of last year. Among leases closed in the Gables in the first quarter were Carolina First Bank, d/b/a Mercantile Bank, leased 18,767 square feet at 255 Alhambra Circle. Law firm Colson Hicks Eidson is to occupy the 17,000-square-foot penthouse previously occupied by BankUnited in that building, and the Consulate of Barbados is moving within the Gables to the 13,000-square-foot penthouse at 2121 Ponce de Leon Blvd.
The fact that there is no new office product being delivered this year is helping to fill some holes in the Coral Gables office market. Nearby, Allen Morris Co. is also moving ahead with its Ponce de Leon Towers, a 210,000-square-foot luxury office building that's part of seven-acre Old Spanish Village.
The Gables-based company is going through the last project approvals before moving forward with plans and has two tenants committed, including itself and The Rockefeller Group. Mr. Morris has said he plans to begin construction by year's end to complete the 16-floor project by the end of 2012.
The new projects central location and high-end amenities have caught the attention of several large-scale banks said to be shopping for office space that are eyeing the Gables. Mercantil Commercebank is looking for a 100,000-square-foot space, Gibraltar Private Bank & Trust is searching for 60,000 square feet and TotalBank has been touring the Gables and downtown for a 50,000-square-foot headquarters.
One of my clients has been considering purchase opportunities in the Gables and here are the comps that were identified for Coral Gables class A & B office buildings between 5,000 – 25,000 rentable square feet sold within the last year.
312 Minorca: Class “B” Office Building The remodeled free standing 1950 Coral Gables 2 story Office Building in the Heart of the Gables Business District, which has 7 parking spaces, 7,899 Sq. Ft sold for $3,000,000 or $380 per square foot. Merrick View Office Condo: Bayview Financial sold 6 commercial condominium units at Merrick View, located at 135 San Lorenzo Avenue in Coral Gables, to a Fairchild Merrick View, LLC, a private investor, for $2.4 million on April 16, 2010. The units, which total 9,373 square-feet, are 100% leased to tenants. The actual cap rate was reported by the seller to be 8%. The NOI, given the cap rate, would be $192,000. This was an all-cash deal under contract for 30-45 days. 301 Almeria Ave - Class “B” Office Building The subject property located at 301 Almeria Ave Coral Gables,Fl 33134 sold in a Owner User sale for $2,980,000 or $181.77 per square foot. Reportedly, the sellers were off-shore second generation owners looking to sell. The buyer is an attorney (ACOSTA STROMMEN - Julio Acosta ) who processed an SBA loan and will occupy space at the location. There was no cap rate, and the property was 50% vacant at the time of sale. 2850 Douglas - Class B Office building Another owner/user - Professional Translating Services, Inc. occupying building sold at $4,250,000 or $183.11 per square foot. Owner occupants could be eligible for SBA 504 financing, which would business owners to obtain 90% financing.
Please call me @ 305-720-7925 if you are interested in Keith Darby’s services.
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