Bison Tales blog moderator David Repka of Bison Financial Group in St. Petersburg, FL was selected by real estate master marketer Cody Sperber as one of the “Top 75 Real Estate People to Connect with on LinkedIn”.

To connect with David on LinkedIn visit his profile at: www.linkedin.com/in/davidrepka

The entire list can be downloaded from the box.net widget on this site.

By Mark Heschmeyer on CoStar

Fundamentals in U.S. office markets appear to have stabilized and are headed toward an expected recovery, according to CoStar Group in its The State of the U.S. Office Market: Mid-Year 2010 Review & Forecast.

In its detailed quarterly analysis of the U.S. office market, CoStar Group confirmed positive net absorption for the quarter and office vacancy rates that appear to have peaked and are no longer rising.

“As we anticipated two quarters ago, it now appears we have hit the bottom of the market in terms of vacancy and that is critical here in this business,” said Andrew Florance, CEO of CoStar. “The fact that we are clearly showing some sort of bottom and we don’t have a significant increase in vacancy this quarter is very positive news.”

In presenting the latest findings based on CoStar’s research, Florance sought to dispel confusion over the office market’s performance that may have resulted from conflicting media reports.

[BLOGGER COMMENT: In an earlier post this blogger noted the fact that Florida office assets are now trading for substantially below replacement cost. My conclusion is that this appears to be an outstanding entry point for investors that have been on the sidelines waiting for a buy signal.]

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Tampa Bay Sale TrAs the price

[BLOGGER QUESTION]

Is it time to call a buying signal for office properties in Florida now that the acquisition price has dipped under the replacement cost? Or are office investors trying to catch a falling knife?

Just as commercial real estate is starting to recover… Congress plans to drive a stake through its heart and raise income taxes from 15% capital gains rate to 35% ordinary income rate. Tell your U.S. Senators about the unintended consequences associated with the carried interest proposal.  Please call 202-224-3121 and ask to be connected to your Senators’ offices.  Visit http://lac.icsc.org/icsc/dbq/officials/ to look up your Senators.

Key Points:

  • The tax increase on carried interest proposed in the tax extenders package will have serious unintended consequences to local communities.
  • This proposal would be the largest tax increase on real estate since the 1986 Tax Reform Act.
  • This tax increase is likely to hurt economic redevelopment and job creation in our most economically deprived communities because it captures real estate development.
  • While the original target was private equity and hedge fund managers, this proposal will disproportionately impact the real estate industry because it will increase the tax on the general partner’s share of profits in a real estate partnership.
  • Unlike hedge fund and private equity firms, carried interest in real estate deals is not simply compensation for services.  Rather, it is the return for taking on the tremendous risks and liabilities associated with real estate development projects, such as environmental concerns, lawsuits, operational shortfalls, construction delays and loan guaranties.
  • This potential tax increase does not recognize the entrepreneurial risk and personal guarantees that the managing partner offers on behalf of the real estate partnership.
  • Quite simply, if this legislation is enacted, the managing partner’s incentive to take-on the risk is greatly diminished.  Projects with brownfield, mixed-use, or low income components will be most impacted by the carried interest proposal because they are the most risky.
  • This tax increase will also hit small to medium size developers the hardest.  These developers are already struggling with the current credit crisis, and this proposal will further limit available capital in the real estate market.
  • With the commercial real estate industry under serious strain due to current economic conditions, raising this carried interest tax on real estate will not only threaten economic development projects, but it will also jeopardize the related jobs that those projects create.

The Apartment Finance Today conference was a great opportunity to share ideas with the best and brightest in the multi-family investment, development and finance industry. The final session of the conference was a panel with three economists focused on answering the key question on everyone’s mind:

  • What are the best & worst nationwide markets for apartment investment?

If you would like to view these PowerPoint presentations they are available from the box.net widget on the right hand side of this blog or follow this link to the folder: http://www.box.net/shared/zmttpnc3hh

NOTE: These are not my work product, they were prepared by:

  • Sam Chandan, Global Chief Economist and Executive Vice President, Real Capital Analytics
  • Ryan Severino, Economist, REIS
  • Greg Willett, Vice President, Research & Analysis, MPF Research

Warren Buffet

Not really.

While there is frothy excitement in social media circles that Warren Buffet’s holding company, Berkshire Hathaway Inc., is mentioned in the same sentence as “distressed real estate” his firm is a special servicer, not a buyer of distressed real estate. One of his holdings, Berkadia, has a portfolio of $240 billion and is now the country’s third largest special servicer. They jumped up in the rankings with the purchase of Capmark Financial Group in December 2009. It will be interesting to see how they utilize this servicing platform and the AA credit rating of Berkshire Hathaway to add to his mid-11 digit personal fortune.

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OK… I am a sap for motivational stuff… I’ve walked on hot coals with Anthony Robbins and started skydiving as a metaphor of overcoming my fear of heights… take a peek at this 1min 16 second video to remember the simple lesson that if you’ve never failed… you’ve never lived.

2009 was a horrible year for many of us in the commercial real estate industry with transaction volume down 78% and CMBS securitizations down 99% from their highs. I’m encouraged that 11 days into the new year the phone is ringing! So far in 2010 we have presented 3 term sheets on distressed commercial real estate /  notes and 2 term sheets on acquisition loans… This tells me that Buyers and Capital are both looking to shake off the failures of 2009 and get some deals closed in the New Year.