How to win in 2010

December 30th, 2009 by John Combs

This time of year we can choose to either look back or look ahead. Based on some of the Year in Reviews I’ve read already, I advise looking ahead. While the overall economy does seem to be rebounding, the best advice is to take matters into your own hands. Choose the best path for your business in 2010. Choose to win.

I’ve compiled a few strategies to consider if you’re looking to gain more value from your real estate and better position your properties for 2010. To be honest, some of these recommendations for winning in 2010 are actions you should have considered in 2009. Don’t put off the resolutions that could help your bottom line. While they won’t help your waistline (depending what your personal New Year’s resolutions may be), they are worthwhile if you want to win in 2010.

Stay close to your tenants. According to Kingsley Associates, an industry research firm that conducts tenant surveys, almost 20 percent of tenants never interact with their property managers. Connecting with your tenant can bring about higher levels of tenant satisfaction, which also promotes better retention. Conversely you can also better observe how their underlying business is doing. Don’t let a tenant get too far behind. Look for signs of decline. The earlier you can identify a potential problem, the faster you can correct the problem and safeguard your revenue. What are signs that a tenant may be in trouble? More empty offices or cubicles. Empty parking spaces. Unreturned phone calls. Bounced checks and repeat late rent payments. If you can, blend and extend terms if you believe the tenant’s business is viable.

Rebid and re-negotiate contract services for properties paying particular attention to the scope of services. To preserve revenue, many owners and managers are cutting back on 24/7 guard service or modifying cleaning specifications to reduce operating costs. Try to adjust the scope of work without compromising service quality. Some of the ideas noted by Patricia M. Areno, CAE, Senior Vice President, BOMA International on the BOMA website include: adjusting the frequency for window washing or for sweeping and mopping stairwells, taking advantage of economies of scale by using the same vendor for multiple properties, and evaluating service levels to be sure you are getting all the services in your contract agreement.

Keep the vacancies in move in condition. If you are in a building that is 15 years or older, make sure the entry, common area and suites show well. This is not the time to let it be. If you have empty space, be proactive. Your buildings need to look great and you need to work more with the brokerage community. Schedule open houses or, if you can, offer incentives. Think about what you can do for potential tenants. Provide free rent periods and other incentives.

Review tax bills and appeal valuations The valuations show how much a property is worth based on calculations by the Assessor’s Office. While notices should reflect current market data, property valuation can be a complicated and lengthy process that, despite an ever-changing market, has to refer to a fixed period. The valuation appeals process can be simple and beneficial to a property owner if there is evidence of a different lower value for the property.

Continue your commitment to reduce utility costs. According to California’s Flex Your Power program, energy represents as much as 30 percent of a building’s operating costs. Undertaking energy efficiency measures can reduce energy consumption – and thus, utility bills – by 30 percent or more. These savings directly benefit the bottom line. A 30 percent reduction in energy consumption can lower operating costs by $25,000 per year for every 50,000 square feet of office space. The best part is that these improvements to energy efficiency are often attained through no-cost or low-cost projects that also enhance the indoor environment of commercial office buildings. Consider these ideas: Turn off copiers and other office equipment at night to save energy and money. Conduct periodic night tours to identify equipment that’s left running in your buildings and tenant suites. Keep the commitment to “green” your buildings. Implementing energy saving and sustainable practices has been shown to increase tenant satisfaction and property values.

Thank you for your interest and commitment to this blog. 2010 is bound to be another challenging year and I look forward to commenting on it for the real estate community.

The State of California Real Estate

Southern California has had its great share of real estate struggles since 2007, and the economic recession of 2008 only made it worse. However, over the past few months, a stabilizing real estate market has offered optimistic views of the future of the Southern California real estate market. Home sales are beginning to rise and the drop in median prices have slowed, giving real estate experts the impression that the real estate market has hit bottom and is poised for a rebound. However, many still feel that the economic stability of the state of California and the concern for job security still pose as major obstacles to the successful recovery of the Southern California real estate market.

According to DQNews.com, many cities, including Santa Barbara, are beginning to post increases in home sales and slower declines in the median price of home sales. In fact, October experienced the smallest decline in median home prices since 2007, primarily due to a smaller inventory of foreclosed and distressed properties on the market. The median price for a home in Southern California was $280,000, up 1.8 percent from the previous month but down 6.7 percent from the previous year. Some regions near Santa Barbara are even beginning to experience year over year gains in the overall median home price. In October of 2009, about 22,000 new and resale houses and condos were sold in Southern California, which was a 2.8 percent increase from the previous month and also a 2.8 percent increase form the previous year. October also marked the 16th consecutive month ending in a year over year gain in home sales. Experts also believe that the federal tax credit for first time home buyers has also been a major factor in the increase in home sales, as well as affordable mortgage rates and home prices.

The Pacific Coast Business Times also reports that real estate experts forecast that the Santa Barbara real estate market will rebound in the coming months as signs show that the market has already hit bottom. Declining foreclosure rates will play a major role in the improvement of median home prices. However, experts still believe that the commercial real estate market has a longer way to come, given that the market is still struggling with a 13.3 percent vacancy rate and virtually nonexistent construction activity.

Taxes, Taxes and more Taxes!!!!!

URGENT! CONTACT YOUR CONGRESSMAN TO AVOID COMMERCIAL REAL ESTATE TAX HIKES

December 9, 2009 on 10:50 am

Action to Oppose More Than Doubling of Taxes on Real Estate Carried Interests

Edited by Jodi Summers

In early December, Congressman Charles Rangel Ways, chairman of the Ways and Means Committee of the House of Representatives, introduced the “Tax Extenders Act of 2009″ (H.R. 4213). Wrapped in this legislation package is a proposal that would more than double the taxes on carried interest received by general partners in real estate partnerships. Under this legislation, carried interest would no longer be taxed as capital gains at 15 percent, but as ordinary income at rates as high as almost 35 percent…making everyone’s investment real estate holdings a lot less sexy.

Kick us while we’re down. Those investing in commercial real estate are already feeling economic distress because of the decline of property values and the lack of loans available. The proposed legislation would more than double the taxes imposed on many real estate entrepreneurs.

If H.R. 4123 enacted into law, this proposal could be the largest modification to the taxation of real estate since the Tax Reform Act of 1986.

This bill was past stealthfully, proposed on December 7th, it bypassed the customary legislative process, bypassing the House Ways and Means Committee, and going directly to the House floor for a vote on December 9, reducing meaningful opportunities to amend the bill.

Safeguard your real estate assets; communicate with your Congressional Representatives and Senators! Let them know that this tax increase on carried interest will further damage the commercial real estate industry and undermine efforts in their own communities to spur job growth and economic recovery.

http://www.capwiz.com/naiop/issues/alert/?alertid=14439831&type=CO has letters ready to go to your congressmen.

Save your assets and contact them!

Key Professional to Make Use of When Buying Real Estate

01.12.2009 | Author: Chris Channing

A small ring of professionals is necessary when buying your first home. Such professionals all work together to make your buying process to be a smooth, fast, and safe one. If you are buying your home for the first time, it’s important to take advantage of each professional to avoid hardship.

The first professional that comes to mind is the real estate broker- who is going to help you find the actual real estate you wish to buy. Although some argue that brokers aren’t completely necessary, for the average first time home buyer working a full time job, it would be too much work otherwise. Real estate brokers also have key contacts in the industry to aid you in other aspects of home buying.

Getting approved for a mortgage loan is the logical next step. A lender will take the time to comb over your financial history and ability to pay a mortgage loan. If approved, the lender will proceed to set a payment plan that corresponds to your budget. Sometimes getting approved is tricky- and it might take months to fix a credit rating.

An appraisal is in order for a home you aren’t sure is priced right or not. The appraiser can be of great help in formulating a good offer for the real estate in question. A good real estate broker should be able to give a ball park estimate of what the home is worth according to current market conditions. Real estate brokers can also sometimes act as an inspection agent for the home.

Saving money after buying the home because priority in order to keep bills paid. Applying and qualifying for a tax credit can lessen the burden of bills for up to $8,000 for qualified home buyers. There are several tax credits to take advantage of, so if you can’t qualify for one, talk to an accountant for more ideas on saving money via tax credits.

Lastly, obtain insurance on the property once it is received in your name. Lenders will automatically demand that you do this in order to protect their investment, but it doesn’t hurt to look around before the purchase so you know which insurance agency has the best deal. Become educated on what the policy does or doesn’t cover, and do consider getting a more expensive policy to cover your home from acts of nature such as a tornado or hurricane.

Your team of professionals that you choose will cost a pretty penny- but it’s a sum well spent. Buying real estate is much easier with the help of others on your side to find the deals, close them, finance and then insure them so that your future with your home will be long lasting.

The Spirit of this Season

I read this story and it was encouraging to me of how Americans are not waiting for something to happen. They are making things happen. They are not just looking for handouts, they want to chip in as well. This is a great story of someone in need who wants to help out others in need. This is the spirit of America and I felt others should read this story especially because the tough times we are currently facing.

The spirit of this season: Be thankful, spend less

By Rick Hampson, Judy Keen and Wendy Koch, USA TODAY

Giving families a hand

The story of pumpkin pies across America began last summer in Michigan with Kim Neubacher, 33, mother of six, whose husband lost his job with an auto parts supplier; whose car broke down; whose 6-year-old was hospitalized with an infection; whose electric bill balance was $3,000; and whose spirit was unbowed.

She called Family-to-Family, a private charity in Hastings-on-Hudson, N.Y., that matches families that have more with families that have less, as founder Pam Koner puts it.

What Koner really liked was that "Kim didn't just ask for help. She said, 'I want to help' " — to find partner families for other families in her town of Burton, just outside recession-battered Flint.

Koner matched Kim and Kelli Weeks, 29, a lawyer in San Francisco.

Kim's need for help met Kelli's need to do something more than work and play. She wanted to show a mother, struggling to provide the basics for her children, that someone cared. Also, "Michigan was part of the draw for me," Kelli says. "Everybody's reading about GM and Chrysler."

She's been able to recruit about 20 girlfriends to link up with other Burton families. In California, she says, "A lot of our friends are losing their jobs, too."

Each month she pays for a package of groceries for the Neubachers, and personally sends them a box with things like backpacks, coats or medicine.

This month, she also decided to surprise the family with a turkey and a pumpkin pie — baked according to her family's recipe.

On Sunday she had her Family-to-Family friends over to her place for a pie bake-a-thon for their Michigan families.

Kelli stored 12 pies that night in the freezer of her neighborhood grocery store.

On Monday she and a friend packed them in coolers with ice, brought them to a FedEx office and overnighted them to Burton.

Kelli will spend Thanksgiving at her parents' place on Lake Arrowhead in San Bernardino National Forest in Southern California. Kim will be at home with her family, 2,000 miles away. But they plan to celebrate together by sharing photos online.

Things are looking up for the Neubachers. Kim's husband, David, is in college full-time and working two part-time jobs; the kids are healthy; the electric bill is paid; the mortgage is only a month behind.

But without Kelli's help, Kim says, her family might have had to eat Thanksgiving dinner at the Salvation Army.

Her takeaway: "We don't always have to rely on the government. We can help each other."

Keen reported from Chicago. Koch reported from McLean, Va. Contributing: Emily Bazar and Marisol Bello in McLean; The Associated Press

Shaping Mogul Launcher

Last weekend our company went to sunny Oceanside for a business retreat to work out our business plan. We had a great time getting to know each other on a more personal level. That was an encouraging sign to all of us and evidence that our working and personal relationships will gel well together as we shape Mogul Launcher. The midnight oil was burning on both nights spending all weekend (except playing a game of basketball) talking and figuring out what we feel will be important to and for our future clients. It was great to get a culmination of various points of view and feedback on how we are going to lay out our business keeping in mind how we need to ultimately benefit our clients. We feel we will be the pulse of what real estate professionals need and want out of a real estate website. We also know our services that we will offer our clients will be beneficial in growing their empires. On our final morning, our layout for the website was pretty much done and our rough draft for our business plan needs a bit of re-working. But the vision is in place and now we need to implement it on our site. We are so excited for the future of Mogul Launcher and the servicing our clients the best way possible.

Written by: James Oronoz

Real estate still reeling

Panel sees bright spot in industry

Matt Wrye

Created: 11/18/2009 06:44:23 PM PST

The new realities of the Inland Empire's commercial real estate market are still sinking in.

A consistent theme took shape as members of Commercial Real Estate Women Network Inland Empire questioned an expert panel on Wednesday at an Ontario meeting: The local market, while showing some positive signs, is still far from recovering.

The new tug of war between desperate-for-cash tenant borrowers and lenders who are using old-school underwriting standards won't be solved by using strategies from prior commercial real estate busts, according to one of the experts.

Rather, "it's going to take creative minds in meetings like this," Karen Racusin, senior vice president of U.S. Bank's Southern California region, said in an interview after the event.

If there's any Inland Empire bright spot, it's industrial real estate, panelists said.

This sector will probably be the first to emerge from skyrocketing vacancy rates, sometime in 2010, with retail and office space slowly following suit, panel members said.

"The economists who I talk with ... say we're in the sixth inning, and small (positive) sprouts are everywhere," Racusin said about a commercial real estate recovery. "So there's great hope moving forward, but there's still $1.5trillion in toxic (bank) assets."

She said it's "too early in the game to tell" whether or not the U.S. Treasury Department's Term Asset-Backed Securities Loan Facility (TALF) program, created to bolster commercial credit markets, has done a good job. John Renken, president of Claremont-based real estate brokerage firm Renken Co., said sale and lease transactions will probably start picking up throughout 2010 as more sidelined real estate investors become convinced that a bottom is forming in the market.

But overall, "we've got a few years to work our way through all this," he said, noting that lease rates, loan volumes and vacancy rates in certain areas are poised to return to 2002 levels.

With respect to Inland Empire office space, several experts believe there's five to 10 years worth of inventory to work through, Renken said.

Deborah Gallagher, director of Small Business Administration lending at Pasadena-based Community Bank, said several business clients are finally showing some optimism.

"We're seeing a lot of equipment (financing) activity in the last 90 days, which was nonexistent at the beginning of the year," Gallagher said.

The attractiveness of Inland Empire commercial properties will be a hot topic moving forward.

The region offered distributors and white-collar employers "cheap" rental prices during the housing market boom, until rates peaked in 2007.

Now that rates have plunged across Southern California, some tenants are finding similar office, industrial and rental space in Los Angeles or Orange County for prices they've always dreamed of.

The topic "is an (issue) that's going to be answered over the next couple years," said Erik Hernandez, a senior vice president at Lee & Associates in Ontario.

Is there light at the end of this tunnel?

The Los Angeles Times reported on the trouble commercial real estate faces in Southern California, with the number of office vacancies rising and expected to grow well into next year. Many companies in the South Orange County region are still inclined to shrink rather than grow during these unsure economic times, resulting in about 17 percent of the total available office space in the region being vacant. However, many companies are also taking advantage of early lease extensions and lower rents in exchange for agreeing to stay put longer. Nevertheless, many feel that the commercial real estate in Orange County has already hit bottom and are preparing for the recovery of the market. So, hang in there! Be flexible and creative with your tenant retention. Analyst feel that the market will level out mid-year of 2010 and plateau there for the remainder of the year.

Commercial Real Estate Chartbook

Commercial Real Estate Chartbook: Quarter 3

Wed, Nov 11 2009, 16:32 GMT

by Anika Khan, Mark Vitner

Wells Fargo Investments, LLC

The Commercial Real Estate Centipede Loses Another Shoe

Hardly a day goes by without some mention that another shoe is about to drop on the economy as the rising tide of defaults and foreclosures of commercial properties overwhelms the financial system. Such talk is understandable given the circumstances and the nearness of the collapse of the residential market. There is still plenty of bad news stoking fears, both real and imagined. Property values are declining. Credit is hard to obtain. And there are numerous high-profile commercial real estate bankruptcies such as General Growth Properties, Extended Stay Hotels and Capmark reminding folks of just how perilous the real estate industry is today.

While many of the challenges facing commercial real estate are well known, there are also important differences with previous real estate crunches. One of the most notable differences is that real estate is not nearly as overbuilt as it was in the late 1980s and early 1990s. Commercial development did not really get going until the last two years of the economic expansion and significant office development was largely confined to a handful of markets. Retail development and industrial construction were more widespread, with the housing boom fueling explosive gains in consumer spending and an import boom. The result was a massive wave of retail development and a boom in industrial development around many major seaports.

The flip side of that import boom was that a huge pool of capital accumulated overseas. Eventually this surplus was recycled into various investments, including commercial real estate, which helped pushed prices much higher than the fundamentals ever justified or anything seen in previous cycles. Once housing values started falling, consumer spending quickly wound down and the capital markets stumbled. With the capital markets frozen, investors no longer had access to a cheap source of capital and prices for commercial properties quickly turned south.

Various measures of commercial property values show prices topped out in late 2007, right about the time the capital markets froze. Prices are currently down a cumulative 34 percent from that peak across all property types. We expect further price declines over the next 18 months, as sales of distressed properties increase. The largest drops will continue to be in areas where housing weakened the most, including Florida, southern California, Arizona, Nevada and Georgia. Office buildings and shopping centers remain exceptionally vulnerable as employment is still falling and discretionary consumer spending remains on the back burner.

Commercial property market to hit bottom in 2010, report says -- latimes.com

Commercial property market to hit bottom in 2010, report says -- latimes.com

Posted using ShareThis

After reading this article, I am encouraged that there may be an end in sight of this economic chaos. If you are an owner of a commercial building, hang in there! There is light at the end of the tunnel. I know it's tough right now. This may be the time to become creative with creating cash flow and compromising a bit with rents.(Now only if the banks would loosen up their wallets a bit.) If you are in the market to purchase, there are tons of good deals for you and you have the power of negotiation on your side. If you need a good realtor, escrow company or real estate direction, email us your question or concerns and we would be happy to help you. Have a great weekend and keep coming back to check on our progress as we build a company suitable to your needs.

Posted by: James Oronoz

RETREAT RETREAT!!!!!!!!!!!!!

While we continue to build our team in order to operate Mogul Launcher, we are also preparing for our retreat to hammer out our business plan in order to help us stay on course. We are aware that our business plan will change as the real estate needs and market change. As that happens, we will adjust accordingly and make the necessary moves that help our clients reach their full potential.

We are very excited for our Mogul Launcher retreat as we know there will be long nights and long hours but we also anticipate the completion of our business model. When this is complete, our next steps will be to have former executives look our plan over and get some feedback from them. We feel blessed to have a variety of talented people at our disposal. These are the people that will help shape our company and may never receive any proper acknowledgment. We are grateful for these individuals and we are priveledged to know them.

Our excitement for the launch of our company is growing daily. We feel we can do this in the first half of next year, if everything goes according to plan. We have mapped out our steps and we feel confident that these are the correct and proper steps needed in order to do business correctly. Come back often to check out our progress in the creation of Mogul Launcher. Thanks for reading.

Posted by: James Oronoz

Whoa! Slow down.

We had a lunch meeting today in rainy southern California , which is a great change to the weather, and we went over the specifics of our next steps in the creation of Mogul Launcher. I am so anxious and excited to launch our business that, at times, I feel the need to rush this whole process in order to join the competition. I was reminded by my business partner that in order to really serve our clients and customers, these steps need to be approached correctly and in a certain order. I am normally a person who sees the big picture but my excitement has clouded that a bit and so I thank my partner for keeping me focused on the big picture. In order for us to accomplish the big picture we have some work with the small details that I believe will set us apart from the rest of the competition. It's good to step back a bit and see what has been accomplished thus far and continue to paint the picture of the vision we had started. While go through the excitement of creating Mogul Launcher, it is easy to get lost in what we are doing and not be able to enjoy the ride. I want to enjoy the ride! Our next step is to find a web-designer who shares our same vision and excitement. Hopefully, we find the right person. Here's to hoping.

Posted by: James Oronoz

Another piece added to the puzzle?

Last night, we had a meeting with a gentleman who we would like to consider to jump on board with us for Mogul Launcher. He has been in the real estate business for some time now and we feel his expertise will benefit us as we go forward. We felt the meeting went really well. It was a great opportunity to get to know each other and see if he is a good fit for us and us a good fit for him. We were able to give him a vision of our company and were able to bounce different ideas off each other. The feedback we received from him was encouraging to us as we feel it validates our idea and the need for Mogul Launcher. The consensus was, it is more important to surround ourselves with people with the same passion, drive and working with people who share the same vision with enthusiasm. It's more about the excitement of building this company than to chase the $$$$$$$$! We are excited about the possibilities and the future of this company. We are excited to share this with you as you journey with us as we build our company.

Posted by: James Oronoz

What's in a name

As we have gone to explain our business to friends and certain people that we meet. They often ask us how we came up with our name for our business. The answer is pretty amusing. One night, I was playing monopoly with my daughters and wife and my 4 year old was just killing us by swiping up most of the properties on the board. Although I am a competitor and don't like losing, it was funny to us to see her with all these properties in her possession. I took a picture to post on my facebook and I tagged the photo with " future real estate mogul". It just hit me like a ton of bricks, using the word Mogul and knowing we want to use our business to help launch our clients in creating their own little empires. We automatically knew this was the name. Mogul Launcher! There you have it.

Posted by: James Oronoz

Setbacks! Everyone has them.

We met today briefly to share ideas of building our business plan. Our dinner meeting was cancelled for tonight which was slightly disappointing. We feel this prospect has tons to offer with his experience, intellect and enthusiasm. But we say it as a small setback. We are hoping for a future meeting with him. We are still focused on other prospects in hopes that they will share our vision for our company and bring to life our vision . We are currently reviewing a number of graphic artist and IT peeps. We are excited about the possibilities of who might join our team. We are focused and motivated to bring what we feel is missing in the real estate market. Things are going great. Come back for future updates and see us grow right before your eyes.

The ball is starting to roll

Things went really well for us today and we are excited about how our business is being structured and developed. We met today for a business lunch and we discussed our different ideas and opinions for developing our business plan. We also went over online and marketing development and ways to go about exposing our business where we could effectively grow,serve and give our clients exposure in the most proficient and professional way. It was exciting to discuss the different individuals that we are going to pursue as we grow our business and our team. We set up a dinner meeting next Thursday to inquire feedback and possibly add more experience to our company. The ball is starting to roll and gain some speed.

Mogul Launcher!!!!!!!!!!!

We finally decided on our name for our online real estate business.

Our business name is Mogul Launcher. We are looking forward to

helping make real estate investment a bit easier. We will continue to

brainstorm for ideas. Come back for updates.