Archives for May 2018

A vast expanse of shifting white sand dunes in southern New Mexico would be elevated from a national monument to a national park under legislation proposed Friday by one of the state’s senators.
U.S. Sen. Martin Heinrich, a Democrat, made the announcement while visiting the state as part of a multiday tour that also included looking at the potential for more outdoor recreation elsewhere as New Mexico and other western states promote their wide open spaces in hopes of attracting more tourists and more money.
White Sands already brings in about a half-million visitors each year, and Heinrich said designating the area as a national park has been something that community leaders and local elected officials have been pursuing for years.

“Everyone who visits White Sands marvels at its remarkable geology, spectacular scenery and outstanding recreation experiences,” he said in a statement. “And the broad regional support we’ve received for what could be our state’s second national park demonstrates the endless opportunities this designation would offer to communities and local businesses across southern New Mexico.”
With national park status, supporters hope to bring more recognition. Entrance fees and access would remain the same.
A study released Friday by the nonprofit research group Headwaters Economics found that re-designation of White Sands could result in more than $6 million in new spending and dozens of additional jobs.
The group looked at eight re-designated national parks in California, Colorado, Arizona and Utah and found that visits increased on average by about 20 percent within five years. The parks also had more overnight visits and spending per visitor than monuments.
The study also suggests that the uptick in visitation at national parks following the recession will persist as long as the national economy continues to grow.
White Sands was established as a monument in 1933 by President Herbert Hoover to preserve the dunes and additional features of scenic, scientific and educational interest.
Supporters have said the monument contains a more diverse set of archaeological and scientific resources than were first known, including the recent discovery of Ice Age fossilized footprints and sloth tracks.
The monument has the largest collection of fossilized tracks in gypsum in the world, from saber-toothed cats and woolly mammoths to ancient camels.
Thousands of hearth sites where early inhabitants built campfires have also been preserved in the dunes in ways not found elsewhere, and scientists are finding new species and subspecies of insects and reptiles that have adapted to the unique conditions.
White Sands is bordered by a military missile range. The bill clears the way for a land trade with the U.S. Army that has been in the works since the 1970s.
An additional 9 square miles would be transferred to White Sands, and park officials would take over management of another area currently within the monument’s boundary. Nearly 6 square miles would be transferred to the Army.
Situated in the Tularosa Basin, the monument currently spans 224 square miles with the dune field stretching across parts of the monument and the missile range.
Under the proposal, existing agreements would remain in place between the military and the National Park Service to protect use of airspace and testing grounds for the missile range, nearby Holloman Air Force Base and Fort Bliss.
By: Susan Montoya Bryan (ABQ Journal)
Click here to view source article.

1031 LIKE KIND EXCHANGES: During 2013 and 2014, tax reform proposals in both the House and Senate would have repealed Section 1031. The President’s budget proposal for Fiscal Year 2015 contained limits on the deferral provisions of Section 1031. Fortunately none of the proposed changes to Section 1031 progressed beyond the idea stage. So far no tax reform plans have been introduced in 2015, but since it is typical for tax reform proposals to borrow heavily from ideas floated in previous years, the risk to Section 1031 remains a clear and present danger..

NAR ACTION: NAR participates in multiple coalitions to protect Section 1031 from repeal or limitation. As part of the “1031 Like-Kind Exchange Coalition,” which includes non-real estate industry groups, NAR commissioned a study from Ernst & Young on the macroeconomic effects of repealing Section 1031, and participated in a press conference and a hill-visit day to meet with key Members of Congress to discuss the issue. As part of the “Real Estate 1031 Like-Kind Exchange Coalition,” made up solely of real estate sector groups, NAR has commissioned another economic study on Section 1031, focusing on its impact on real estate. In 2015 NAR surveyed its membership to gauge how REALTORS® use Section 1031, and how their businesses will be affected if it is repealed. NAR continues to monitor this, and will oppose any plans to repeal or limit its use.

BASEL III: The Basel Committee on Banking Supervision released a proposal addressing Revisions to the Standardized Approach for Credit Risk, which outlines the risk-weighting regime for credit exposures for those using the standard approach. The proposal would have a negative impact on credit availability for commercial real estate through its changes to risk weighting different factors within the loan, and increased lending standards that would be higher than what regulators already have in place.

NAR ACTION: NAR signed onto a comment letter in March 2015 with several industry partners calling for the Committee to rethink its approach to the risk weighting standards and to scale back some of the changes that would be most limiting to commercial real estate lending.

LEASE ACCOUNTING: The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have been working since 2005 to develop a standardized approach to lease accounting. The initial proposal included new accounting rules that would force many companies to capitalize commercial leases onto their balance sheets using a “right-of-use” accounting model. Efforts to fully converge the two standards have stalled. The latest reports from FASB indicate it will replace the current dual model approach with a new one: though leases currently categorized as “operating leases” will be brought onto balance sheets under it, “Type A” leases are treated as capital leases and “Type B” leases continue to be recorded as straight-line rent expenses. Most real estate leases will fall into the “Type B” category. The updated standards are expected to be released in 2015, to be effective in 2017 or 2018.

NAR ACTION: Throughout the standards convergence project, NAR has been active on its own and in coalitions to express concern the new lease accounting proposal would be detrimental to the economy by reducing the overall borrowing capacity of many commercial real estate lessees and lessors. NAR will continue to monitor the FASB and IASB negotiations as they approach finalization of their standards, and will provide education to its members about the new standard and the impact it may have on commercial real estate.

MARKETPLACE FAIRNESS: In March 2015 Senators Enzi (R-WY) and Durbin (D-IL) introduced S. 698, the “Marketplace Fairness Act of 2015,” which would create authority for state governments to collect sales taxes on Internet sales for goods delivered to their states, which would level the playing field between brick-and-mortar and e-commerce retail businesses while assisting the states in collecting billions of uncollected state sales taxes. Earlier in 2015 Rep. Goodlatte (RVA), Chairman of the House Judiciary Committee, circulated a draft proposal which would implement an origin-based collection system for online sales, which has been strongly criticized by many industry groups.

NAR ACTION: NAR participates in the Marketplace Fairness Coalition, and will continue to support S.698 and urge Congress to pass this legislation.

Read full issues briefings  here.

Diversity in commercial real estate, whether it be at the company or association level, is increasingly being recognized for what it is: A matter of survival. The good news is that, in both arenas there is a growing emphasis on seeking the thought leadership that is a natural outcropping of a diverse population. The bad news is: the clock is ticking on getting it right.
A study commissioned by NAR and published last year states that: “By 2025 the industry will be faced with a shortage of 15,000 to 25,000 qualified leaders without a significant number of younger leaders to replace them. As the Boomers begin approaching the point of retiring and prepare to pass on the leadership of the industry there is a growing question as to whom they will pass it to as most leaders acknowledged that there is a major talent shortage of potential millennial leaders to follow Gen X as the next in line.”

Survival Instincts

But this is not a story about millennials only. Diversity is just that: Diverse, and doors have to be thrown open for a population increase of women, African-Americans, Asians, LGBT and truly, you can fill in the blank. And it’s not just a matter of putting more diverse butts into chairs. As we said, this is a matter of survival.
“Diverse organizations are smarter and more innovative,” says Angela West, SIOR, frankly. West, a first vice president at CBRE, was Global 2014/15 SIOR President and a driving force behind the creation of the association’s Diversity and Young Professionals committees. She sees the industry doing “quite well” in terms of its push to level the playing field and says that she sees “new fresh faces in the industry all the time. My view of commercial real estate brokerage is that the doors are wide open and were even back in ’91 when I started. But I also know my experience is unique.”
Indeed. CBRE, as a global firm, she says, is positioned in a way not many smaller firms are, with the resources to create networking and support groups for a range of populations, including internal groups for women, African-Americans, Asians, the military, LGBT professionals, Hispanics and Latin Americans. In fact, the firm’s efforts in diversity have been recognized by both the Human Rights Campaign, which designated CBRE as a Best Place to Work for LGBT Equality, and Fortune Magazine, naming it among its 100 Best Workplaces for Diversity.
Such notable accomplishments aside, white men still hold more than 77 percent of senior executive positions, according to the Commercial Real Estate Diversity Report from Bricta Media. Unfortunately, age is not taken into consideration in that statistic. However, anecdotally, it would be surprising if the majority of those men were under 50. But that often-quoted report came out in 2013, and a lot has happened since.
SIOR, for example, is attacking the question of diversity from a range of positions, and the group is currently mounting an effort to define the state of diversity within the organization. According to current Diversity Committee chair Soozi Jones Walker, SIOR, the engine of that research is a major national survey now shaping up and designed to gauge membership pulse on the issue. Walker, the president of Las Vegas-based Commercial Executives Real Estate Services, says that in addition to the survey, which is due out this year, “leadership is making a conscience effort to add a more diverse profile to the working committees of the organization.”
And that’s not all. There is also a major push at the chapter level for current members to scour their local markets for potential candidates that could bring to the organization the diverse thought leadership that West referenced.
“At the local level,” says Walker, “my chapter has grown by 30 percent, from 24 members to 39. SIOR leadership is encouraging local members to bring in diverse candidates. They’re telling current members not to be threatened by the fact that new candidates might be their competition. Rather, know that a diverse group of people will make the industry stronger.”
That’s a gospel that is being spread increasingly not only to members but to other associations and, on an industry basis, to the colleges and universities. On the first score, SIOR is working with groups such as “AREA, which is a very diverse group,” says Walker. “We’re cross-pollinating and inviting members of other industry groups to come and see the value we can bring to their business.”

Branding Issues

On the second score, Walker reports that industry associations, CCIM and IREM for instance, are mounting stepped-up campaigns to reach out to college and even high-school students to expose them to an industry that does not have a very public face. West and Walker agree that branding commercial real estate as a potential career path remains a best-kept secret. This, despite the multi-trillion-dollar size of the industry’s collective portfolio size or the sheer number of practitioners it represents.
When most people think real estate, they think “residential,” says West, who describes that as a “highly visible industry. Everyone has bought, sold, or lived in a house. By contrast, most people don’t think of all the services that take place daily in the buildings they drive by. It’s not a well-branded industry.”
Walker agrees: “It takes years to really learn and master the nuances–the physical demographics, the legal and engineering applications–all of which are far more complex than on the residential side. When most people think of real estate, they think of people on TV wearing crazy outfits.”
There is also the double-edged sword of having strict criteria for membership in groups like SIOR, a necessity that increases the age of the candidates and thus, renders it less resonant with the college set. As a result, “We see change in SIOR after we see change in the brokerage population because of the criteria set down by certification,” she says. And clearly, that is not something that can or will change.
Happily, and on a growing basis, the commercial real estate associations are keenly aware of the need to step up their efforts to make commercial real estate a much more diverse industry. But clearly, as Walker and West attest, short of buying a rack full of crazy outfits to mimic the residential side or lowering the criteria for association membership, more can be–and needs to be–done.
At the very least, the industry is pointed in the right direction. As Angela West concludes: “The next five years can hold much more dramatic improvements in the focus on diversity.”