Author: Randybacon

For Data Center Leasing, Demand Doesn’t Always Come First

by Randybaconin Real Estate, TechnologyLeave a Comment on For Data Center Leasing, Demand Doesn’t Always Come First

Demand should dictate lease costs, right? Yes, usually. But this maxim isn’t always true for the data center properties that are operating to host the zettabytes of data—that’s trillions of gigabytes—we’re all punching through with social media and synced business operations.

According to a recent CBRE study, a company looking to lease at a data center will spend $12 million more in one major city than another for the same amount of space. That’s because of variables such as new vs. mature markets, the local cost of power, climate issues, environmental risk, taxes and government incentives. For example, a market with a lot of properties, such as Silicon Valley, costs less to lease in than the up-and-coming Omaha, Neb., market, says Pat Lynch, managing director of CBRE’s data center solutions division.

Read entire article on National Real Estate Investor here.

Carried Interest Unexpectedly Re-emerges for CRE

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Carried Interest Unexpectedly Re-emerges for CRE

WASHINGTON, DC—Congress has been trying to change carried interest’s tax characterization for years and in some instances, came rather close to suceeding. More recently, the issue died down — at least on the Hill — as the conversation shifted to comprehensive tax reform.

‘Carried interest’ is safe for now, has been the unspoken message.

Last week that message changed.

On Wednesday the Internal Revenue Service quietly proposed a rule that would effectively do what numerous proposed acts and measures could not: ban companies such as private equity firms from converting the management fees they receive from their investors — fees that would normally be taxed as ordinary income — into capital contributions invested in their funds. These are taxed at a much lower tax rate.

Read the entire article on GlobeSt.com  here.

Why Street Stores Still Matter in the Age of Online Shopping

by Randybaconin Real EstateLeave a Comment on Why Street Stores Still Matter in the Age of Online Shopping

Online shopping has increased in popularity with the advancement of technology, but a large number of shoppers prefer the traditional brick-and-mortar store because of the immediacy factor, according to Cushman & Wakefield’s Gene Spiegelman.

“Amazon has been challenged with how to get products to their consumers faster and at a better cost. That’s why they want to develop drones,” Mr. Spiegelman said at C&W’s mid-year Manhattan market overview breakfast on Tuesday. “The retail store is still the best point of distribution from the retailer to the consumer.”

Read entire article at Commercial Observer here.

Macy’s and Other Retailers Are Pressured to Sell the Land Beneath Them

by Randybaconin Real EstateLeave a Comment on Macy’s and Other Retailers Are Pressured to Sell the Land Beneath Them

Retailers are coming under renewed pressure to cash in on their real estate as property values soar. But the approach has a mixed track record and poses risks at a time when chains are rapidly retooling their stores to support online operations.

Macy’s Inc. is the latest to wrestle with the option. The department-store chain is facing pressure from activist investor Starboard Value LP to spin off its property, a move the fund, which hasn’t disclosed the size of its Macy’s investment, thinks could boost shares in Macy’s by more than 70%. The retailer has said it is evaluating spinoffs and other property moves.

Read entire Wall Street Journal article here.

Should Congress Trade in 1031 Exchanges?

by Randybaconin Real EstateLeave a Comment on Should Congress Trade in 1031 Exchanges?

The Real Estate Roundtable, campaigning to dissuade Congress from abolishing a stipulation under the U.S. tax code that’s critical to the real estate market, has some new ammunition in its arsenal. The organization has just come out in support of “The Economic Impact of Repealing or Limiting Section 1031 Like-Kind Exchanges in Real Estate,” a new study detailing the benefits of retaining the provision and the negative consequences of eliminating it.

To read the entire article at Commercial Property Executive click here.