Surviving Dual Agency

Wednesday, January 11 -- 8:30 - 10:00 a.m.

Speaker: Bill Hunter

Cost: $10 for SAR Members and REALTORS®/$15 All others

When a real estate broker represents more than one party in a transaction, the odds are good that the situation is one of dual agency.  What does the law require? How can one identify a situation of dual agency?

Additionally, real estate brokers are expected to be facilitators.  They find owners who want to sell or lease their properties, take listings, and negotiate sales and leases. But they are also "fiduciaries" in that they are expected to serve as trusted advisors and advocates for their clients, even when the clients have conflicting interests.  How can a broker do that without incurring liability. What must the broker do to protect itself and its clients? How can a broker and its agents survive dual agency. Additional Information and Registration Form

REGIONAL EVENTS

Your Pipeline is Your Bloodline -- Free Webinar

The greatest insight to deal flow and opportunities is the broker's pipeline. In this 31-minute session, listen to speaker Rod Santomassimo, Founder and President of the Massimo Group and walk away with tips on how you can properly create and utilize your pipeline for achieving maximum commissions. Link

Fundamentals of Commercial Real Estate -- Free Webinar
Tune into this 30-minute webinar, where you will have a preview of Signature Series Speaker Cindy Chandler's  "Fundamentals of Commercial Real Estate" course. In this session, Cindy introduces the basics of commercial real estate culture, lingo, practices and marketing, then provides sources for further training opportunities and additional resources. Link

LEGISLATION

Proposed initiative targets health-premium regulation

Debate over the controversial issue of health care rate regulation came roaring back recently. Consumer Watchdog, the Los Angeles advocacy group that makes health plans bristle, announced it has filed a proposed ballot initiative with the California Attorney General that would regulate health care premiums.

If backers get approval to circulate petitions to qualify the measure - and get the half million signatures necessary to put it on the ballot - California voters will get an opportunity next November to make premium rate regulation a reality. The proposed measure seeks to ensure fair and transparent rates by:

• Requiring health insurance companies to publicly disclose and justify their rates before they can take effect.
• Prohibiting unfair pricing based on prior coverage and credit history.
• Requiring health insurance companies to pay a fee to cover the cost of administering the new law.

"Getting control of health insurance premium increases in California is like trying to slow a runaway train," Consumer Watchdog President Jamie Court said in a message to supporters. The proposed Insurance Rate Public Justification and Accountability Act "will change the insurance industry's arbitrary and unreasonable pricing practices and give needed relief to consumers," he said. Proposed Initiative

 
What's coming tomorrow?  Wouldn't we all like to know?  That was the message at the session, "Views From The Frontier Of Commercial Real Estate" held at the NAR 2011 Annual Meeting in Anaheim earlier this month.  

The question asked was, "What will we be doing in our offices?
 
"Hold up your smart phones," said Patricia Lynn CCIM, speaker and principal of consulting firm Lynnk.  "These are the office of the future." Lynn spelled out the four principles of the future office worker profile:  Talent, Technology, Transportation and Tolerance.  Creative talent, high technology, high mobility, and social tolerance.
 
Tomorrow's office worker, culled from a US population growth that appears on pace to hit 450 million in 2050, will be of the creative class, said Lynn.  "These are the knowledge workers, who think, and use technology creatively and who want to be near other knowledge workers."  Today, 30% of the workforce is in the creative class - but Lynn says the number will climb to 50% in just a few years. The more she spoke, the farther away the traditional conception of the office cubicle farm faded into the mists of history. Tomorrow's Office Workers

The health of banks nationwide is improving, according to the most recent report by the Federal Deposit Insurance Corp. The majority of all insured institutions - about 63 percent - recorded improved performance over the previous year, according to the FDIC's Quarterly Banking Profile. (Sacramento Business Journal)
 

by Michael Shaw

The team that guided Sacramento's downtown railyard project for nearly a decade - even following a foreclosure - is no longer involved after the owner terminated a consultant contract last month. The change raises the question of whether there's still a long-term plan for the railyard.
 
Inland American Real Estate Trust Inc., a large investment fund that owns nearly 1,000 properties worldwide, foreclosed on the 200-acre property last year and took control from former owner Thomas Enterprises Inc.  Inland agreed to keep the Thomas team on as consultants for at least six months. They lasted a year, but Inland's representative confirmed the end of the contract and the transition to its own management team.
 
"It was never an indefinite agreement," said Jared Ficker, Director of Public Affairs for Inland. "It was a transition agreement to help us take ownership." Ficker said Inland is focused on day-to-day operations, while the vision for the property will develop over time and as the real estate market improves. (Sacramento Business Journal) Railyard Contract

by Michael Shaw

Charter schools can be a headache for building owners, but as the schools continue to open and expand, they are increasingly viewed as potential tenants for nontraditional settings such as offices and industrial sites.The lease deals can be risky. Nearly one in five charter schools will close within the first five years, according to a Business Journal analysis of California Department of Education figures.

Take the California College, Career and Technical Center, which opened in West Sacramento last year. The school leased a portion of a 164,000-square-foot former high-tech plant after pouring thousands of dollars in upgrades into the building. But a late opening and funding delays led founders to close it this fall. West Sacramento officials this week sought to revoke the use permit for the school.

Some landlords, however, are taking the leap during an otherwise anemic real estate market. In Sacramento, charter schools are going into everything from office buildings to former bowling alleys. California now has nearly 1,000 charter schools and added new ones at a rate of 92 per year over the past five years.

One of the larger office leases in Sacramento this year went to the John Adams Academy. It signed a 10-year deal for 51,000 square feet in a Roseville office building that was formerly home to an insurance company.

Brokers say there has been an increasing number of inquiries from new or expanding schools in the region. "In a traditional market you wouldn't spend five minutes on this," said John Fondale, a commercial broker at Cornish & Carey Commercial Newmark Knight Frank and listing agent for Affymetrix (Sacramento Business Journal) Charter Schools

PROPERTY PULSE: SLUGGISH GROWTH EXPECTED FOR VALUES 

It is going to be a tough slog for the commercial-real-estate industry, says Moody's Investor Service. U.S. commercial-property values overall are expected to see sluggish growth in coming years, even dropping some next year. By 2015, the firm projects that office values will rise just 1.3%. 

The restrained outlook comes as job growth has been slow, hundreds of billions of distressed commercial mortgages are coming due and landlords must sign leases in a relatively low-rent environment.

"Retail and office in particular have some wood to chop," said Tad Philipp, Managing Director at Moody's. "We don't see a lot of rent growth." With home-ownership rates falling, the firm feels good about apartments, though. Moody's projects a 33% increase in apartment values over the next four years. 

by Cris K. O'Neall

Property owners in and around San Francisco face an increasing tax burden as local governments attempt to bolster their struggling budgets by expanding the scope of transfer tax laws.

In recent years, the cities of San Francisco and Oakland as well as Santa Clara County have gone beyond just collecting transfer taxes when a deed is recorded, and now collect the tax for real property ownership changes that occur when one company buys or takes over another. The new laws may be working, as transfer tax revenues in all three jurisdictions have recently risen.

From the time of its first implementation in the 1960s until recently, local governments only levied documentary or real property transfer taxes when a deed or other legal instrument was recorded based upon a transfer of "realty sold." The amount usually ranged from $0.55 cents to $3 for each $1,000 increment in the reported price paid for the property.

However, the advent of new types of legal entities which are readily bought and sold has altered the way properties transfer now. As a result, the traditional system for collecting transfer taxes via recorded deeds cannot always keep up with today's transactions. (NREIOnline)  Bay Area Transfer Taxes

by Array Mark Anderson

Employee Policies Institute predicts the equivalent of 6,000 full-time restaurant jobs in California will be eliminated if the state minimum wage is raised to $8.50 from $8, as proposed by Assembly Bill 10.

Most of those losing hours will be waiters and waitresses. "If you take a typical restaurant, it has a 3 percent profit margin," said Michael Saltsman, Research Fellow at the Employee Policies Institute.
"Restaurants have been seeing their costs going up, and they find it difficult to pass it on to customers in these economic times."

The nonprofit institute has tracked government data from 50 states for 20 years. The research found that every 10 percent increase in cash wages reduced the number of hours worked by tipped employees by 5 percent. If wages go up, restaurants are most likely to schedule servers for fewer hours, Saltsman said. "When your labor costs go up and you are a low margin business, you have to make hard choices and get more efficient," Saltsman added. (Sacramento Business Journal)  Minimum Wage Threatens Restaurants

Clean water appears to be abundant at the crux of two of the state's major rivers, the Sacramento and the American, which gave rise to the state's capital. But new requirements to treat and transport the water that flows freely through the Sacramento Valley are culminating in an unprecedented number of projects with a potential cost totaling $20 billion.

In California's politically charged and economically challenged climate, no issue is likely to be more controversial or costly as water for the coming decade. It means higher water and sewer rates for businesses and residents and big contracts for engineering firms. But engineers say Sacramento has been living on borrowed time as its infrastructure has aged, and that residents have failed to grasp the magnitude of the problems.

"The whole issue is taken for granted," said Dave Bennett, a principal in the Rocklin office of international engineering firm Stantec. "It's only going to get more expensive. The low-hanging fruit has been picked." The firm is one of several pursuing opportunities with these projects such as locating funds, designing facilities and overseeing construction. (Sacramento Business Journal)  Flood of Projects for Sacramento

by Randyl Drummer

The combination of economic and regulatory uncertainty in the health care industry, coupled with a pullback in buying activity by REITs, has slowed the torrid pace of major medical office building investment deals over the first three quarters of 2011, according to CoStar data and industry sources.

While the number of transactions was up slightly through Sept. 30, overall investment sales dollar volume for medical office buildings in the CoStar database was less than half of the $2.8 billion recorded for the same period in 2010.

But while investment is down, demand for the current supply of medical office building space has increased due to job growth in both the medical fields and the broader economy. The 1.5 million jobs added over the last year have restored health insurance coverage for many Americans who lost their jobs during the recession, according to a recent report by Marcus & Millichap.

The vacancy rate for Class A and B medical office space, which rose to a high of 13.6% in late 2009, fell to 12.4% in the third quarter, according to CoStar information. It remains well above the single-digit levels prior to the recession, however. (CoStar)  

by Anita Likus

 
Non-British investors own more than half the real estate in London's financial district, the City, overtaking U.K. buyers for the first time, according to a new report. While the trend of increasing non-U.K. ownership is likely to continue, the make-up of buyers is changing, and prices in the City will have to come down, market participants say.

Foreign investors own 52% of the property in the City in 2011, compared with just 8% in 1980 and 25% in the mid-1990s, according to the report commissioned by property developer and investor Development Securities PLC.

London office property as a whole attracts more investment from abroad than any other city in the world, including New York, with $97 billion of sales between 2007 and 2011. Both Paris and Frankfurt lag behind. In addition to its role as a financial center, the City also offers a stable legal environment, represents a hedge outside the euro and has no capital-gains tax on property transactions for foreign investors, said Andrew Hawkins, City Investment Director at real-estate brokerage Jones Lang LaSalle Inc. (Wall Street Journal)  London Owners

by Eliot Brown

The pharmaceutical industry is cutting back these days, but you would never know it from the construction underway by Pfizer, Inc.

The drug maker broke ground Monday in the Boston area on a new 180,000 square-foot facility that will house researchers being moved from Groton, Conn. In the U.K. earlier this year, the company said it would mostly shutter its operation in Sandwich, the birthplace of Viagra, choosing instead to concentrate research at a new facility in Cambridge, England.

Pharmaceutical companies such as Pfizer are increasingly concentrating research and development in a handful cities known as "bioscience clusters" that are rich with universities and competitors. The trend is a sign that companies are reaching for new-and costly-ways to bolster their research efforts at a time their pipelines of blockbuster drugs are running dry.

At the same time, the moves are providing a rare bright spot for the struggling commercial real-estate sector in Boston, San Francisco and a few other areas while new construction continues to slow in much of the country.

In the first 10 months of 2011, construction starts overall were down 3% in the U.S. from the same period in 2010, according to McGraw-Hill Construction, which tracks the industry. But starts in the manufacturer-owned laboratory sector, which includes biotechnology, more than doubled last year. (Wall Street Journal) Biotech Boom

For the first time, the US has a national green building code.

The International Green Construction Code (IGCC), approved last week after two years of development, applies to all new and renovated commercial buildings and residential buildings over three stories high.

The historic code sets mandatory baseline standards for all aspects of building design and construction, including energy and water efficiency, site impacts, building waste, and materials. Although the final code won't be published until March 2012, many local and state governments have begun to officially adopt it.

"It represents a change in the standard of construction," says Jessyca Henderson Director of Sustainability Advocacy at the American Institute of Architects. "It will effect everyone that touches buildings...it will be a big leap."

The new code creates a mandatory "floor" - enforceable minimum standards on every aspect of building design and construction that now must be reached. LEED certification, on the other hand, is voluntary. Although many buildings now strive for it, there are more that don't. The new code will thus raise the standards for ALL buildings. (Sustainable Business.Com) Green Building Code Approved