Friday, November 18, 2011

2011 Presidents` Letter - Update

Dear Friends,

We write to you today on behalf of the Triangle Commercial Association of REALTORS® and Tacquire to thank you for your ongoing support, and to update you on the many milestones we reached over the last year. The achievements outlined herein would not have been possible without your feedback and involvement.

TCAR: In early 2010, the TCAR Board of Directors met with both TCAR members and non-members to strategize and prioritize the coming year with the goal of narrowing our focus to best meet member needs. Through this meeting we developed a strategic plan that served as our guide in 2011 and beyond.

Among TCAR`s top priorities in 2011 was providing commercial educational opportunities through our mandatory and elective updates, as well as through our partnership with CCIM. We also provided multiple networking opportunities, with Property Showcases held throughout the year and the annual TCAR Golf Tournament held at Hasentree in the spring. On March 3, 2011, we recognized Smedes York (Realtor® of the Year) and many other Triangle brokers at TCAR`s annual Frontier Awards Breakfast, held at Carolina Country Club.

Early in the year, we aggressively opposed an unforeseen NAR dues increase on a local, state and national level. While the national board overwhelmingly approved the increase, our efforts were not wasted. We sent a clear message to both state and national representatives that such steep increases in dues are unacceptable and will be met with aggressive action, and that we expect to have direct input into how the funds allocated to our area are utilized on our members` behalf.

As we do each year, we also focused on giving back to our community. Through our participation in the 2011 Joint Event, we helped to raise $10,000 for The Boys and Girls Club. More than 400 people attended the event. We will wrap up the holiday season on December 6th with a Christmas Toy Drive benefitting the Salvation Army.

We will soon complete our first full year of marketing TCAR and Tacquire with the help of Articulon, a well established local marketing/public relations firm. In addition to fee-paid services, Articulon donated their time and expertise via an in-kind sponsorship. Through our proactive marketing and membership recruitment efforts, we have thus far exceeded sponsorship goals for the upcoming year, and TCAR membership has held steady at approximately 585. This is a noteworthy achievement given challenging economic and market conditions that would typically result in attrition of members and sponsors. We feel strongly that the addition of member benefits such as Tacquire and the recently launched National Haves and Wants program played a significant role in helping us to maintain membership levels and increase visibility for our sponsors.

As most of you know, our primary focus in 2010 and 2011 was the development of a new, research-supported Commercial Information Exchange known as Tacquire. Our charge was to develop an affordable, accurate, easy to use system for our members. With the help of many of you, that vision became a reality in September 2010. Tacquire made significant strides in its first full year of operations, including a substantial increase in the amount of data in the system, as well as the addition of numerous enhancements. A summary of Tacquire`s 2011 accomplishments to-date follows below.

Tacquire: Tacquire exceeded both membership and data entry goals in 2011. Just one year after launching, more than 11,400 properties and more than 6,600 listings had been entered into the system. Over 5,000 sales comparables were also added, with all sales from 2010 forward being researched and checked against the deed.

To facilitate research efforts and increase exposure for member listings, we actively sought partnership opportunities with local economic development agencies. To date, five agencies have joined Tacquire and are using the Tacquire Link feature as the exclusive property listing search engine on their web sites. They include Wake County Economic Development, Raleigh Economic Development, the Downtown Raleigh Alliance, Chapel Hill Economic Development and the Wake Forest Chamber of Commerce.

Through member feedback and weekly team calls with our CIE technology platform partner, eProperty Data, we combed the system, making adjustments and improvements as needed, and sought opportunities to roll out enhanced features at no additional cost to members. Examples include a new and improved generation of reports, including both property and analytic reports; FastFlyer, an automated flyer maker program; and a new iPad app to enhance mobile access for members. Investit Lite was launched to allow members to quickly and easily perform on-line cash flow projections and simple investment analysis, and a new Site Evaluator tool allows members to overlay logos for retail tenants onto aerials, print demographic and traffic count reports, and export imagery to Google Earth.

GIS information and parcel shape files were added for Moore, Hoke, Alamance, Guilford and Forsyth Counties, and an enhanced GIS Search Tool was incorporated into the system to streamline the search process.

And our work is far from done. Before the end of the year, tenant data from Dun & Bradstreet will be incorporated into the system, and new Office and Industrial Leasing Guides will be released to highlight broker listings and market share.

The support we have received from the Triangle commercial real estate community has been overwhelming, and Tacquire members are already seeing the benefits of a cooperative system. Requested enhancements have quickly been adopted, and listings are garnering scores of views per month, with the majority derived from the public side of the site.

In 2012, we look forward to working with our members and eProperty Data to introduce additional tools, including even more reporting options. Researcher Ron Dixon will continue not only to add new listings, but also to identify opportunities to enhance existing property and listing records with additional information, photographs, etc.

To conclude, we cannot thank current members and the broader commercial real estate industry enough for your support of both TCAR and Tacquire. Our long-term vision is to be the primary resource for commercial real estate information, not only for our local real estate community, but also for business owners seeking information on Triangle commercial real estate. In becoming the shepherds of our own information and our own future, we will all realize value through improved information, more streamlined research, and enhanced visibility. Our short-term success, which is dependent upon your support, can lead to even larger opportunities in the future, including our ultimate vision for a state-wide member owned system. The future is ours, if we choose it. We do, and we hope you will too. This is YOUR commercial association and YOUR commercial real estate information exchange.

Warmest Regards,

Shane Bull Board President, TCAR

Elizabeth Raiford Board President, Tacquire

Thursday, November 17, 2011

Lease Rule Would Hit Profits

NOVEMBER 16, 2011 The Wall Street Journal

Lease Rule Would Hit Profits

By EMILY CHASAN

Retailers, banks and airlines, which often use long-term leases to add to their locations or aircraft fleets, are pushing back against a proposed accounting rule that would act as a drag on their profits.

U.S. and international accounting-standards setters appear ready to reconsider the proposed rule, which has emerged as the most controversial piece of their effort to overhaul accounting rules for leases. The outcome could influence the length of commercial leases, how fast some companies grow and how much exposure they might have to the real-estate market.

Wal-Mart Stores Inc., the world's No. 1 retailer, and drugstore operators Walgreen Co. and CVS Caremark Corp. are among the big companies that could be hit hardest by the proposed rule, part of a long-term project by the U.S. Financial Accounting Standards Board and its overseas counterpart, the International Accounting Standards Board, to make balance sheets more accurately reflect a company's assets and liabilities.

The overhaul aims to address complaints that current accounting rules let companies leave investors in the dark about the size of their lease obligations. Many companies keep most of these obligations off their balance sheets, disclosing only a few details in financial footnotes.

Most American companies are resigned to the centerpiece of the overhaul: treating leases—or the right to use a piece of property or equipment—as a new kind of asset. This new asset would be offset on a company's balance sheet by a corresponding liability, the obligation to pay rent. The change would add a total of $1.7 trillion in current liabilities to corporate balance sheets world-wide, according to analyst estimates.

However, companies are at odds with the standards setters over how lease expenses should be recorded on their books. As the proposal stands, companies would have to use a method called front-loading, which effectively concentrates the cost of a lease into its early years. Currently, they can spread the average rental cost under a lease evenly over its lifetime, often as long as 20 or 25 years.

"The [FASB] staff is currently evaluating at what time we might bring [the front-loading] topic back to the board table," said Kristin Bauer, an FASB practice fellow who works on the lease-accounting project. That could happen as early as December at a joint meeting in London with the IASB.

Leases generally are more valuable to retailers in later years, after a location has built a following and is generating more cash. If forced to adopt front-loading, retailers argue, they would have to book higher costs for a new store before its sales have had a chance to take off.

If a retailer was expanding, signing new leases faster than its old ones expired, front-loading could take a heavy toll on profits.

Similarly, front-loading could weigh down profits for years at banks that have lots of retail branches. Airlines, which have razor-thin profit margins and use aircraft leases to hold down costs, also are worried about the impact on their bottom lines.

Based on companies' current disclosures about leases, Bill Bosco, a member of the IASB's working group on lease accounting, estimates that big retailers that use long-term leases, such as Walgreen, CVS, and Wal-Mart, would book higher lease expenses for eight to 15 years under the new proposal than they would using the current straight-line method.

Walgreen would be the most-affected of the three, with a 23% increase in lease expenses in the first year alone, said Mr. Bosco, who also works with the Equipment Leasing and Finance Association.

A representative of Walgreen, which leases about 79% of its locations and typically signs 20- to 25-year leases, said the front-loading issue is the "most sensitive" area of the proposed changes for retailers, because the expensing method doesn't reflect the way leases work.

Walgreen wouldn't comment specifically on Mr. Bosco's estimate, but pointed to regulatory filings in which the company said the proposed changes would have a material impact on its financial statements.

Wal-Mart and CVS declined to comment.

In a December letter to the FASB, CVS said it leases 95% of its retail stores under long-term leases and has $26.9 billion in operating-lease commitments. It said it would need to hire additional finance personnel to handle the proposed rule's "onerous" requirements.

Nor do investors generally favor front-loading. "Many investors like the straight-line approach," said Janet Pegg, an accounting analyst at UBS AG in New York. "They feel it more accurately depicts cash flows."

Companies could potentially shorten the length of their leases in order to keep the overall cost down, and so minimize the expenses they record, said Bret Hardy, head of corporate finance for commercial-real-estate firm Colliers International.

But, if companies were to shorten leases, that would require more-frequent renewals, leaving them more exposed to swings in the real-estate market, according to Credit Suisse accounting analyst David Zion.

Printed in The Wall Street Journal, page B5

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Friday, November 11, 2011

WebEx Presentation Discusses Commercial Broker Lien Law

WebEx Presentation Discusses Commercial Broker Lien Law
NC’s Commercial Broker Lien Law is an important piece of legislation that was enacted during the 2011 legislative session. Through this WebEx presentation (held live on Oct. 31 but available for your information now), Cady Thomas, NCAR Director of Government Affairs, and Garth Dunklin, commercial legal counsel with Wishart Norris Henninger & Pittman, P.A., discuss the bill and its implications for commercial brokers in North Carolina.
To hear and view the presentation, click here.
To view the Powerpoint only, click here.