CCIM July 8th, Ted Jones Speaker

Stewart Titles Ted Jones was the speaker at last Thursdays CCIM Luncheon and once again put on an entertaining slide presentation. Ted feels that we will not be out of the recession till jobs turn around. Right now recessions are judged according to rising and falling GNP numbers. Ted feels that our economy would be best served if this was measured by the job growth rather than GDP. Trends point to 3 more years of rising unemployment. And just as others have commented  "it's a good thing we are in Texas".

Jim Cockrill with Coldwell Banker United, Realtors - Sugar Land, Beth Young with Grubb & Ellis and Gordon Fox with Fox Inspection Group

      Sassy Stanton with Stanton-Pinckard Realty, Michele Brown with United Western Bancorp, Suzanne Page-Pryde with Page-Pryde Properties and Melanie Fregoe Edmundson with Phase Engineering

HEBC July 8th 2010. Houston Mayor Annise Parker

Houston mayor Annise Parker was featured speaker last Thursday at the Houston Realty Business Coalition Breakfast. She mostly reflected on her first 6 months in office but did bring up the subject of increasing property values by accelerating the process of tearing down derelict multi-family properties. The mayor would like that Houston is thought of as the "City that works and you don't have to think about it".

                Mark Sappington with Cobb Fendley & Associates and Houston City Councilman CO Brad Bradford.

Former Houston Police Chief CO Brad Bradford was in attendance. He feels strongly that Houston can be positioned as the #2 city to do business in in the USA. No one can top NYC but neither Los Angeles or Chicago has the advantages of Houston. He feels a strong marketing campaign emphasizing our strong business atmosphere would prove beneficial.

 

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

Suite 150

Austin, TX 78731

License: TX: 0429279

(512) 338-7800 ext. 0167855

(512) 338-7855 direct

(512) 338-7810 fax

(512) 619-6070 mobile

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

Just how bad was 2009? Jim Carney

The last day of ICSC was pretty much as Sunday & Monday. Most of the people or rather all of the people I spoke to were pleased with results, had good meetings and expect things to happen from them. The one thing that always came up was how they are doing now versus 2009. Last year I remember everyone complaining about how bad business was. Now 2010 is no banner year but the consensus is that business is better year to date that last year and in many cases 2010 through April is better than the entire year of 2009. That begs the question; just how bad was 2009?

Jim Carney

ICSC RECON Las Vegas Monday May 24th

One group that is very glad that ICSC is in Las Vegas are the cab drivers. Each one I spoke was more than pleased to see "conventioneers". Even though ICSC might be down in attendance it's a welcome sight to those in need of tourism.

We all have our opinions of when it will get better but most of those I spoke to make it a sure bet that 2010 will be better than 2009. In fact quite a few are all ready ahead of 09. That doesn't say much for 2010 though. There are still alot of hopes hanging on funding that may or may not happen.

There were some people doing brisk business.

And then there were some empty aisles.

ICSC RECON Las Vegas Sunday May 23rd

 ICSC RECON started today and it was a lot easier walking the isles than it was a few years ago but it is still a huge walk from the North Hall to the end of the South Hall. I stopped by to see Laura Guerra and Albert Gonzalez with Mercedes TX EDC.

On hand at Retail Solutions were Matt Delahoussaye and T.J. Powell.

Most of the early activity seemed to be at Retailers like Walgreens, CVS and anyone giving away free food. Traffic seemed to pick up later in the afternoon but it will be interesting to see what the final attendance figure will be.

Looking forward to walking tomorrow..

Jim Carney

O'Connor Office Forecast Breakfast May 19th 2010

Henry Hagendorf with Grubb & Ellis and Andrew Segal with Boxer Properties teamed up to present their views on the Houston Office market yesterday morning.

Henry had some interesting statistics and is most everyone in the brokerage community glad that we are in Texas and specifically Houston. Houston ranks 2nd in the nation in $ volume of transactions while first in # of sales.Some trouble spots will be NW Fwy where both class A & B are at the bottom of the vacancy scale. 290 construction will probably keep it that way for a while. And the Exxon relocation will hurt the Greenspoint sub market. Absorption is slightly up in B & C while somewhat flat in A. While subleases are flat they will be shifting to vacant as time goes by. Rents will bottom out late 2010 or early 2011. LEAD certifications are up significantly from 11 in 2008 to 29 in 2009.

Andrews focus has always been on distressed properties and he feels that now the market has really come to him. His out of the box thinking has moved another step out with listing his lease space on Craigs List. To date he has signed up 20 leases from this source one of which is 8,000sq ft. He has also had a mobile application built for his tenants to report difficulties and to promote interaction. Be on the watch for the CMBS Special Services. There is 1 Trillion $ and 10 Billion sq ft under the control of Bercadia, LNR. Centerline, Midland and C W Capital but just try and reach them. What is happening is a cycle of the Specials selling cheap to vultures who lower rates causing more failures bringing on more vultures and so on.

Proposed Tax Increase on Real Estate Partnerships going from 15% to 35%

Dear INVESTOR, CLIENT and ICSC Member,



ICSC has learned that the U.S. House of Representatives is likely to consider
a tax increase on real estate partnerships next week with the U.S. Senate
following the week of May 24th.  If this legislation passes through the
House and Senate, we expect it to be signed into law before Memorial Day.



The carried interest proposal  would increase the taxes on a general
partner's promote or sponsor's share from the current capital gains rate of
15% to the ordinary income rate of 35%. In addition to the tax rate increase,
one of the biggest concerns about the legislation is that gains from a
partnership would be re-characterized as ordinary income.  As a result,
not only would the tax rate go to the 35% ordinary income rate (possibly
39.6% in 2011), but the income would also be treated as compensation and
subjected to employment-related taxes, such as Social Security and Medicare,
as well as additional state taxes. Furthermore, capital losses would no
longer be able to offset separate gains. It is critical that Congress
preserve the ability to offset and the current character of gains from
partnerships, otherwise the impact will be devastating to real estate
entrepreneurs.



Although the House has voted for this tax increase three times before, it is
important to contact to contact House Representatives again to make them
fully aware of all the ramifications associated with a vote that supports a
permanent carried interest tax increase to offset numerous temporary tax
incentives.



Based on intelligence we have received thus far, the Senate continues to be
the pressure point. There is no reported widespread agreement or consensus in
the Senate with the House approach. Unlike the House, the Senate has not held
a vote on this tax increase, and several Senators have expressed serious
concern about it. We know much of these reservations are the result of your
communications to your Senate offices.  In short, keep it up. We need to
continue to stir the pot and most importantly, ask your Senators to
communicate their reservations to Senate Finance Chairman Max Baucus (D-MT),
who oversees the bill, so that he is aware of the
opposition.    

Please click here to use the ICSC phone script  and sample letter as a
resource when contacting your Congressional delegation. We encourage you to call your
Senators and Representative, as phone calls are more impactful. 
However, you can also click here to send an email if
you are more comfortable with that option. The important thing is that your
elected officials hear from you.

The next two weeks are crucial.  Thank you for your
continued action on this issue.



On behalf of,



Betsy Laird

Senior Vice President

Office of Global Public Policy

ICSC

Sincerely,

Brad Bailey

Marcus & Millichap
Real Estate Investment Services

Associate Vice
President, Investment

Director, National
Retail Group

*Serving commercial real
estate investors in Texas
since 2002

CCIM Luncheon May 13th John Walsh Speaker

U of H Regent John Walsh and CCIM President Suzanne Page-Pryde

U of H Board of Regents member John Walsh was the featured speaker at the CCIM luncheon yesterday and as Welcome Wilson Sr preaches; Tier One is the goal of all in the U of H system. He stressed that the # 1 reason for a students success is the presence of a "livable community"; where students can live on campus and enjoy all the benefits of campus life. In the next 10 years the university will see student enrollment increase to over 40,000. Plans are to increase academic facilities from 7.5 M Sq Ft to 10 M Sq Ft. They will add 4,000 beds and incorporate a retail aspect to the campus.

Jim Carney

John Cobb and Mark Sappington with CobbFendley

I attended the Houston Realty Business Coalition (HRBC) breakfast meeting today where Attorney General Greg Abbott was the featured speaker.

Below are some of his key points.


The items that have been on the front burner for the past few months all deal with multi state and federal issues.

1) BP oil spill. “Damage will be extreme and take years to fix”. There is the possibility that it will take 2 more months to cap the leak and the Attorney Generals job is to insure that BP pays for the damage not Texas taxpayers.

2) Ruling by EPA on CO2 Carbon Dioxide emissions will affect Houston more than any other major city. It will cost taxpayers in excess of $1 Trillion and lost jobs. Texas filed a lawsuit in March and now 20 other states have joined in to reverse the EPA ruling and put that power back into the hands of congress.

3) Texas will challenge the Health Care Bill as violating the Commerce laws and the 10th amendment. If congress can get away with forcing taxpayers to buy health insurance will the next step be: Buy an electric car from GM?

Attorney General Gregg Abbott and Brad Fricks with Stream Realty

Dave Gilkeson with Westchasee District and Kiki Dixson with Dixson Realty

Jim Carney
REDNews
Co Publisher
O 713-661-6300
C 281-723-7500
jim@rednews.com
http://www.rednews.com/

Houston will gain 28,000 SF specialty grocery store Phoenicia

Apr. 30, 2010
Info from The Houston Chronicle

(Fort Worth, TX) LG Electronics consolidates in Alliance, adds 65 employees and 65,000 SF

May 4, 2010
Info from Houston Business Journal