Archives for March 2019

When approaching Opportunity Zones, the conventional view on the opportunities presented by the legislation appears that the tax benefits are overwhelming the underlying project analytics, but read on to learn some new suggestions.

As a real estate professional, it seems like you can’t go a day without hearing about Opportunity Zones, and for good reason — the legislation offers immensely appealing tax advantages, and the industry is scrambling to figure out how to take advantage; it has the feel of a veritable gold rush. However, many investors are only seeing dollar signs and losing sight of the core intent of the legislation: to make a real and lasting impact on challenged communities. At Cedar, we often talk about doing good for the communities we serve while doing well by our investors.  Opportunity Zone investments certainly can allow us to achieve both of these objectives.
As developers and everyday investors approach Opportunity Zones, the conventional view on the opportunities presented by the legislation strike me as myopic, since it appears that the tax benefits are overwhelming the underlying project analytics. Instead, I would suggest that those already involved in Opportunity Zone investments (or others clamoring to get in) must think constructively about the specific community involved and ensure that, particularly for development initiatives, the project aligns with the needs of the people in those neighborhoods.
Some important questions that developers and their investors should be asking very early on when exploring an Opportunity Zone development project: What are the needs of this community? What type of development will work in harmony with the local socioeconomic and demographic characteristics? How will the development fit in with the aesthetics and culture of the community at large? Becoming well-versed in the tax-related complexities of Opportunity Zone legislation is one thing, but a qualitative analysis of the local market to truly understand the character and sensitivities of a historically disadvantaged community is another entirely. It is this latter analysis that will determine the long-term success of the project and thereby allow the investor to truly realize the economic benefits the Opportunity Zone legislation contemplates.
One prime example of how Opportunity Zones, if approached in this sort of thoughtful manner, have the potential to address very real and prevailing economic issues is our project in Northeast Washington, DC’s Ward 7. In the Ward 7 neighborhood, an Opportunity Zone where Cedar Realty Trust is initiating a large-scale redevelopment, access to fresh and healthy food has remained a challenge. Such an area is often described as a “food desert”. Identifying and addressing this need is not solely the function of the developer — it also requires close collaboration with community stakeholders and public officials not to mention potential tenants. In fact, in the early stages of our Ward 7 project, we began a process of community and local government outreach that has allowed for close engagement with the community, Ward 7 Councilman Vincent Gray as well, as key officials in Mayor Muriel Bowser’s administration. In general, we have found supportive community and government partners in Washington, DC. In addition, we have had the opportunity to already begin enhancing the community through enriching art events, including Cultural DC’s Mobile Art Gallery and bringing the well-known Art All Night to Ward 7 for the first time.
Our Ward 7 project does not exist in a vacuum. Rather, on a national level, access to fresh and healthy food still remains a major problem that impacts 17.6 million people, highly concentrated in low-income urban communities. By identifying similar access gaps — be it to food, housing, transportation, or employment — developers can ensure that their Opportunity Zone projects are positioned for long-term, sustainable support from those that will be most affected by the development itself, such as what we have thus far experienced in DC’s Ward 7.
In conclusion, when approaching Opportunity Zones, the analysis needs to be far more holistic than simply a calculation of tax benefits. A greater emphasis on the human component of Opportunity Zone investments isn’t just about being charitable, rather it allows us, as corporate citizens, the opportunity to do good for the communities we serve while doing well for ourselves and our investors.
By: Bruce Schanzer (Globe St)
Click here to view source article.

The REALTOR® Party works hand-in-hand with the REALTORS® Political Action Committee (RPAC); however, RPAC is a voluntary program and provides the “hard” dollars the association uses to make direct contributions to national, state and local candidates. This partnership is what makes us a force to be reckoned with at the local, state and national levels.
View this video celebrating RPAC’s 50th Anniversary:

U.S. employers posted nearly 7.6 million open jobs in January, near a record high set in November, evidence that businesses are still hungry for workers despite signs the economy has slowed.
The Labor Department said Friday that hiring also rose and the number of people quitting their jobs picked up. Quits are a sign of a healthy economy, because people typically leave a job for another, usually higher-paying, one.
The tally of available jobs now outnumbers the unemployed by roughly 1 million. Openings began to outpace the unemployed last spring, for the first time in the 18 years the data has been tracked.
“The question now is, will workers be increasingly tempted to switch to new jobs or will their current employers raise wages to keep them?” said Nick Bunker, an economist at job listings website Indeed.
The strong job market is already pushing up wages more quickly, with hourly wages rising in February at the fastest pace in nine years.
The report, known as the Job Openings and Labor Turnover survey, or JOLTS, also showed that layoffs declined, a reassuring sign that employers weren’t spooked by the government shutdown, which ended Jan. 25, or the sharp drop in the stock market in December.
Nearly 3.5 million people quit their jobs in January, up 2.9 percent from the previous month. That could force employers to pay more to prevent their workers from quitting.
“The high quit rate is the major source of upward wage pressure, because high turnover costs are a strong motivator for employers to raise wages to retain their top talent,” said Julia Pollak, labor economist at ZipRecruiter.
The economy grew at a healthy clip last year of 2.9 percent, the fastest pace in four years. But trade tensions with China, slowing global growth and signs of caution among consumers have weighed on the economy early this year. Many economists forecast growth could fall below 1 percent in the first quarter.
The JOLTS report suggests the job market remains strong and bolsters most analysts’ expectations that steady hiring and rising wages will support faster growth later this year.
Openings have fallen slightly to 7.58 million since the record high of 7.63 million in November. The data was sharply revised this month to show that there were more open jobs late last year. Before the revisions, the record had been 7.3 million openings in January.
By: Christopher Rugaber (Globe St)
Click here to view source article.

The NIC reports that overall occupancy at skilled nursing facilities held firm at 82.4% at the end of the fourth quarter of 2018, which was virtually unchanged from the third quarter of 2018 and down 35 basis points from 82.8% in the fourth quarter of 2017.

The latest report from the National Investment Center for Senior Housing & Care indicates that skilled nursing care occupancy levels are improving in urban areas, while continuing to slide in facilities located in rural areas of the nation.
The NIC reports that overall occupancy at skilled nursing facilities held firm at 82.4% at the end of the fourth quarter of 2018, which was virtually unchanged from the third quarter of 2018 and down 35 basis points from 82.8% in the fourth quarter of 2017.
“While it appears that the worst of declining occupancy has passed, it’s too early to predict whether occupancy will increase over time,” says Bill Kauffman, senior principal at NIC. “However, it’s likely that the growth of elders in their 80s, as part of the Silent Generation, will boost demand for skilled nursing care.”
The NIC notes in the report that national occupancy levels for skilled nursing facilities had been hovering around 82.5% since April 2018.
“The fourth quarter occupancy trend varied by geographic area with urban areas experiencing an increase, while occupancy in rural and urban cluster areas declined from the third to fourth quarter of 2018. The occupancy rate ended 2018 at 80.4% in rural areas and 83.7% in urban areas, representing a significant difference of 330 basis points.
“Even though we’re seeing stability in both rural and urban areas, rural areas face distinct challenges brought on by lower levels of occupancy, low reimbursement rates and labor concerns,” Kauffman adds. “These factors have contributed to hundreds of facilities closing in rural areas.”
The NIC and other senior care experts say that declining occupancy and fewer facilities in the rural sector are concerns going forward. The NIC cites a recent report in the Bangor Daily News report on nursing home closures in Maine, which has lost nearly 40 facilities statewide since 1995. The newspaper report stated that nearly a third of the state’s population is projected to be over the age of 65 by 2030. Despite that demographic trend, the state has fewer nursing home beds than other states.
Recent data from the Cowles Research Group indicated that more than 440 rural nursing homes have closed or merged nationwide in the last decade.
The latest NIC data reveals the growing importance of private Medicare Advantage plans as a driver of skilled nursing facility occupancy. In urban areas, where occupancy increased in the fourth quarter of 2018, managed Medicare plans are experiencing significant growth. They are now responsible for 13% of skilled nursing facility revenue, up five percentage points between January 2012 and December 2018, the report states.
“Even though Medicaid still accounts for half of skilled nursing’s revenue, evidence suggests that managed care, specifically Medicare Advantage and Medicaid managed care, is the future,” says Beth Mace, NIC’s chief economist. “As low Medicaid reimbursement challenges skilled nursing, federal policymakers are making Medicare Advantage more accessible. It has been gaining popularity for years, but greater flexibility to tailor benefits for certain populations is creating a whole new playing field.”
By: John Jordan (Globe St)
Click here to view source article.