Carried Interest

Senate Democrats Don't Expect to Pass Extenders Legislation by Sam Goldfarb




Senate Democrats said June 24 that they don't expect to pass extenders legislation in the near future and will move to a small-business bill after a procedural vote later in the day.



The Senate is expected to vote today on a motion to limit debate on a substitute amendment to H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010. At a press conference, Democratic leaders said they do not anticipate that moderate Republicans will support the amendment despite repeated efforts to modify the legislation to resolve differences.



Senate Majority Leader Harry Reid, D-Nev., said that extensions of tax cuts such as the research credit and the state and local sales tax deduction will not be moved to the small-business bill because the tax extenders and small-business provisions are "separate issues." Offsets, such as a tax increase on carried interests, could conceivably be used to pay for other legislation, he said.



Democrats refused to say if there is a plan to address the extenders later in the year. "Until we get a few more votes on this, I don't know what we're supposed to do," said Sen. Patty Murray, D-Wash.



Bradley H. Bailey



Associate Vice President Investments



Director, National Retail Group

Special Assets Group



Marcus & Millichap

8310 N. Capital of Texas Hwy

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Austin, TX 78731

License: TX: 0429279

(512) 338-7800 ext. 0167855

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bradley.bailey@marcusmillichap.com

ULI Luncheon June 22nd Galveston Recovery Panel

Panel members from L; Tom Murphy ULI Sr Fellow and former Mayor of Pittsburgh, Betty Massey Citizens Long Term Recovery Committee, Jim Noteware City of Houston Housing Dev. and Joe Jaworski newly elected Mayor of Galveston

ULI hosted a panel discussion on the Galveston Recovery Effort yesterday.  This effort has 42 projects planned and at this point has a long way to go but all say they are making significant progress. Of note was that Federal funding has not yet been sent and not expected till August.

Redevelopment of unused assets into a "Remarkable Place" is one goal. A lot of political bickering and an end to sluggishness should be ending with the recent elections. The Mayor and City Council are focused on forward and positive thinking. Per the Mayor the isolationist view of the past will be replaced with a more regional viewpoint.

Tiffany Soltis with Wilson Cribbs and Goren and Sue Jacobson with Stewart Title

Abe Goren with Wilson Cribbs and Goren, Phil Lewis with Eller Lewis & Loep Realty Advisors, Jerry Goldstein with Marcus and Millichap and Gary Hough with Q10 Kinghorn, Driver, Hough & Co

Biznow Houston Capital Markets - June 22, 2010

Biznow held a Capital Markets panel discussion yesterday and had a pretty good crowd of CRE executives. First up was the lender and banking perspective followed by executives from some local real estate firms. Larry Heard from Transwestern once again seemed to be able to convey the sentiment of many that Houston should be able to recover nicely but when is still the issue. With the BP disaster it looks as though chances of Houston recovering before the rest of the country are now slim. He feels foreclosures will extend through 2013, cap rates are going down, pointing to a DC office property that went at a 5 cap and he likes Industrial prospects in Houston.

Mark Kidd with M Kidd Properties and Fran Youngstrom with Marvin F. Poer & Co

Carried Interest Update, as of June 15th

Dear ICSC Member,




On Monday, June 14, Senate Majority Leader Harry Reid (D-NV) filed for cloture, the final parliamentary step to move H.R. 4213, which includes the carried interest tax increase on real estate partnerships to pay for a $140 billion temporary extension of tax credits and benefits. Reports suggest, however, that Senator Reid is still short of the 60 votes needed to end a filibuster on this bill.



ICSC anticipates an updated version of the legislation to be released later this week as negotiations on several aspects of the bill, including carried interest, continue. Senator John Thune, R-S.D., is expected to offer an alternative that does not include the carried interest tax increase and would slash spending and deficits by $55 billion while still extending tax breaks and benefit payments.



Last week, ICSC President and CEO Mike Kercheval and various ICSC members came to Washington, DC to visit with several key Senate offices. While we received support from most offices, it was mixed with a lack of commitment to make necessary changes to this problematic tax increase on commercial real estate. ICSC's efforts to dampen the impact of this tax hike continue.



At this point, we do not believe that Senate leadership is willing to further consider the concerns of the commercial real estate community with the carried interest provision, and we are asking ICSC members to contact their Senators to request a "NO" vote on cloture and "NO" on H.R. 4213 until the carried interest issues for real estate are reconsidered.



To contact your Senators, please call 202-224-3121 and ask to be connected to your Senators' offices. Click here to use the ICSC phone script as a resource for those calls. You can also click here to send an email if you are more comfortable with that option. The important thing is that Senate offices hear from you.



Thank you for your continued efforts on this issue.



Sincerely,



On behalf of Betsy Laird

Senior Vice President

Office of Global Public Policy ICSC







Forwarded by:



Bradley H. Bailey



Associate Vice President, Investment



Director, National Retail Group



Marcus & Millichap REIS















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Larry Korkmas with Commercial Dispute Resolution Associates CREN 6/18/2010

According to Larry Korkmas the upcoming Cap & Trade bill will be "poison to the real estate industry".
Capping greenhouse emissions/CO2 not only affects large manufacturing and power plants. All property will have to be modified prior to any sale to meet Federal standards proposed in the new bill. There will be no more "as is where is" or grandfathered conditions. These regulation standards apply to most major appliance groups but even to the color of your roof. White for hotter regions and dark for cooler regions.

Larry Riklin with LJR Enterprises, Larry Korkmas with Commercial Dispute Resolution Associates and Wayne Landin with Landin Interests

Larry feels the only safe sales now through implementation will be land sales and if you are not into RE Management; you better be.

Ned Holmes Speaks on TXDOT at ACRP June 17, 2010

Ned Holmes with TXDOT and Jim Suttles with First American Title

Ned Holmes spoke to TXDOT future funding needs today at the monthly ACRP breakfast. Right now funding from gas tax is based on a $ amount per gallon of gas. In the case of Texas that amount is $.20 per gallon. There are no built in increases and this tax has been at the $.20 rate since the early 90's. No one in the legislature is about to approve any increases for TXDOT for fear of losing votes. Until recently the population growth has added enough to the tax base to offset fuel efficiency but that has now reversed and with mandated fuel efficiency going to 34 MPG in 2030 there will be a deficit.
One remedy is VMT which is a Vehicle Miles Travelled Fee. How this one is calculated is a big question.

Dick Klein with The Richard Klein Company and Bill McDade with McDade Smith Gould Johnston Mason + Co.

CCIM June 10th Luncheon Speaker Mike Inselmann with MetroStudy

 

Kristen Wiehe CCIM Scholarship Recipient, Mike Inselmann with MetroStudy and Suzanne Page-Pryde with Page-Pryde Properties

According to Mike Inselmann Texas is the best place to be when looking for recovery from the last two years.  Population growth in the top 20 US cities shows Texas with 4 spots including the top two. Population grows with jobs.

A recession is two back to back quarters of negative GNP growth. We are now running three consecutive quarters with positive GNP growth. What's wrong? Well there is no job growth. Job growth is the most important factors in new housing starts. We are up to 2 million jobs lost from 6 million jobs lost. It takes on an average 1 1/2 to 2 jobs for each housing start. At least the trend is not negative.

Foreclosures still loom out there. There is a new stage in the foreclosure arena. Started when values suddenly declined forcing a foreclosure. Then Adjustable rate mortgages kicked in forcing more. The the third wave comes because of job loss. Now a fourth has come into play and that's the Give Back. Homeowner can afford to pay the mortgage but decides that it will be more beneficial to him to walk. It's voluntary and could cause havoc.

Lastly there are no indicators that this process won't repeat itself again in the next 5 to 10 years.

Jim Cockrill with Coldwell Banker United and Beth Young with Grubb& Ellis

O'Connor and Associates Hotel Forecast Luncheon

Bruce Walker with Source Strategies was the featured speaker at O'Connor Hotel Forecast and a gloomy one it was. Anywhere from Stormy to Extremely Stormy and it won't get much better for 5 years. By the way did you know that 2 per cent of the population is always on the road?

Bruce Walker with Source Strategies and Scott Sherrill with O'Connor  Associates

Kathleen O'Connor, Ray Hankamer and Melanie Fregoe Edmundson

IREM June 8th Luncheon

Dr. Robert Ivany, President of the University of St. Thomas, was the guest speaker at IREM yesterday and spoke on Leadership. In today's volatile, uncertain, complex and ambiguous world; how does one lead? Dr Ivany feels that by going back to basics such as Values and Education rather than formal training for each situation is the key. Dr. Ivany is a retired Army Major General that has held many influential positions including heading up the War College.

Frank Staats with Crescent RE, Dr. Robert Ivany and Bill Lakenmacher with Lock Protective Services