Tax Bill "No Sale" To #Home Builders
An influential home builders group will oppose the House Republicans’ forthcoming tax bill, in a blow to the party’s attempt to forge unity among business sectors.
The National Association of Home Builders, which had expressed openness to changes in the mortgage interest deduction, decided it couldn’t back the GOP bill. The association’s leaders made the decision after top Republicans this weekend said they wouldn’t accept an idea home builders and lawmakers had been working on: repealing the deductions for mortgage interest and property taxes and replacing them with a new tax credit.
Instead, the bill will retain an itemized deduction for property taxes, the House Ways and Means Committee said late Saturday. That is a concession to lawmakers from high-tax states such as New York and New Jersey.
“It’s a bad bill for the housing sector,” Jerry Howard, CEO of the builders group, said in an interview on Saturday. “We will not be for it.”
House Republicans plan to release their tax bill on Wednesday. The tax legislation is the centerpiece of the GOP’s economic and political agenda, and many details have been closely guarded as lawmakers try to build a coalition to push it through the House before Thanksgiving.
The plan nearly doubles the standard deduction, ends personal exemptions and likely repeals the deductions for state and local income and sales taxes. The combination would remove much of the incentive for the mortgage-interest deduction outside the highest-cost areas and could potentially hurt home prices.
Groucho's Home Sells for $3.8M
Room service? Send up a larger room...one of Groucho's most memorable lines, but apparently he didn't really need larger rooms.
The onetime Hollywood, Los Angeles, home of Groucho Marx has sold for $3.81 million to a buyer from Texas, according to property records.
That’s some impressive price appreciation from the time the television, radio and film star last lived there in the 1940s. Marx sold the property in 1949 for a mere $35,000,
The most recent seller, a company called The Crest Group LLC, put the home up for sale just seven months after buying it for $3.45 million, property records show. The company originally wanted close to $4 million for the house but ended up closing for slightly less two weeks ago, selling to a husband and wife from Houston, Texas.
The 3,700-square-foot home, built around 1935 and which recently underwent a Regency-style renovation, has four bedrooms and five bathrooms. The main house sits on around one-quarter of an acre, which encompass a swimming pool with waterfall and hot tub and brick-paved terrace, according to the listing with Juliet Zacarias of Sotheby’s International Realty. Ms. Zacarias did not immediately return request for comment.
The traditional-style house with a steep sloping roof and dormer windows has an attached garage and is surrounded by a privacy hedge, photos of the home show. The master suite has two bathrooms, a walk-in closet and an office with its own balcony.
The first floor has a living room with a fireplace, a dining room and wet bar, and an open kitchen attached to a media room with double glass doors out to the backyard.
#Homes, #RealEstate Selling Like #Weed
Home ownership close to a business with a name like Herban Underground, High Rollers or Dr Releaf could yield a bonus upon a resale. And neither Potco nor WellGreens refer to a bulk products warehouse or a pharmacy chain store. All these are real names of Colorado marijuana shops.
But serious headlines from a variety of sources state this mystifying side effect of legalized cannabis:
“Will Legal Marijuana Give Home Prices a New High?” — Realtor.com.
“The Marijuana Business is Really the Real Estate Business” — FloridaMarijuana.net.
“A Real Estate Boom, Powered by Pot” — The New York Times.
Before cannabis legalization spread across the land, this real estate phenomenon would have been laughable. Indeed, one leading Florida Realtor howled at the very thought when asked for comment about the possibility of such a positive pot impact here.
The growing trend may not be on anyone’s radar here — or statewide, the Florida Realtors organization suspects — but could that change as Florida’s fledgling medical marijuana market sprouts dispensaries?
To date, there’s but one dispensary operational today in the Sarasota-Manatee area, a Trulieve outlet on Tamiami Trail in Bradenton. Its grand opening last month attracted a standing-room-only crowd.
The cannabis clout is on a roll in both the residential and commercial real estate markets in other states. Several scholarly studies support pot’s real estate impact. But that depends on several factors.
Twenty-nine states have legalized some form of marijuana use, either medical, recreational or both. In the November election, California, Massachusetts, Maine and Nevada joined Alaska, Colorado, Oregon and Washington with laws allowing the recreational use of cannabis. Sunshine State voters approved medical pot in November via Amendment 2. The ballot initiative included a July deadline for implementation.
Realtor.com reports the four states with at least a year of experience with recreational marijuana sales showed a marked increase in home prices — well above the national median price. Coincidentally, the price charts for those four states show almost identical upward trends. As Realtor.com states, “Recreational marijuana is likely to have a big impact on home buyers, owners and sellers.”
Even Washington, D.C., which only legalized medical marijuana like Florida, sports a similar upswing in home prices.
One of the academic studies, primarily from two University of Mississippi economics professors, estimates that Colorado’s legalization of recreational cannabis and local governments’ approval of retail outlets within their jurisdictions increased housing values by an average of 6 percent. (Florida, like Colorado, allows local governments to ban cannabis.) The sharp price rise “is likely due” to pot shops “inducing strong housing demand,” the researchers’ report states.
The highly detailed study found recreational marijuana laws “obviously attract more migrants — whether it be marijuana users, entrepreneurs or job-seekers — to relocate, which drives up housing demand.” And, as existing residents become more willing to remain in place, the housing supply drops as demand rises, thus the increase in property values.
The rather lengthy equations the researchers devised to reach their conclusions would make Einstein proud and speaks to their scientific approach. A natural logarithm, indicator variable, vector, demographics, and fixed effects are all part of the multiple equations. Good luck following the explanation of the interplay between all these factors.
A second study, from the University of Wisconsin School of Business and economics researchers from two additional universities, focused on property values in Denver and found that homes near retail cannabis outlets — within just 0.1 miles — gained 8.4 percent more in value than houses just steps further away, from 0.1 to 0.25 miles. That big increase amounted to almost $27,000 for an average house.
A Realtor.com analysis published last year compared median home prices in Colorado from the first six months after the debut of pot shops in January 2014 with the first half of 2016. The increase? From $248,000 to $298,000, a 20.4 percent jump, far higher than the 15.2 percent registered across the nation. The Rocky Mountain state’s booming population accounts for some of that.
Realtor.com qualifies the numbers: “There’s no direct evidence tying the legalization of the drug to the population boom, but real estate agents say more of their clients are relocating to the state because of it.”
Furthermore, “Home prices tend to be higher in the roughly 60 Colorado cities and towns where cannabis is legal than the more than 200 where it’s not.” In hard numbers, the median sales price in the second quarter of 2016 came in at $302,500 for pot jurisdictions versus $267,200 in banned areas. The annual appreciation rate has been higher in cannabis locales, too, 12 percent versus 9 percent since 2014.
On the flip side, Colorado neighborhoods harboring grow houses lose value. The pungent odor the plant emits turns off home seekers.
The Realtor.com data team did not analyze Washington state because some cities allowed sales but later issued moratoriums on sales licenses. Colorado offered the most consistent data.
The commercial side
On the commercial side, warehouses, factories and self-storage businesses in states with legalized marijuana have been converted to pot growing and processing enterprises, the New York Times found. And suburban strip malls have become homes to pot shops.
The industrial real estate market is booming as marijuana operations continue to sprout up. The upshot translates into premium prices for building leases and purchases. The smart money is on property ownership since landlords have been known to gouge marijuana tenants. One sign of all this: There’s a Denver-based real estate and business brokerage company called Avalon Realty Advisors that specializes in cannabis counsel.
Denver marijuana growers inhabited 4.2 million square feet of metro industrial space by the end of 2016, an increase of 14 percent over the previous 18-month mark of 3.7 million square feet, CBRE Research found. Roughly two-thirds of the space comes from warehouses. The average sales price of cannabis-occupied industrial properties jumped 17.6 percent from 2014 to the end of 2016, CBRE reported. Plus, in 2016 sale prices of those properties achieved a 20 percent average premium over all industrial properties.
Denver’s city council, though, capped the number of dispensaries and grow houses in April 2016 since the Mile High municipality became overrun with pot operations. Marijuana dispensaries far outnumber Starbucks outlets in the state — by five times. The number of individual marijuana dispensaries within Denver’s city limits stood at 235 by the end of 2016.
As the Colorado market cools from saturation, states with recent marijuana legalization are now entering the quickly changing landscape in commercial real estate, particularly California and Massachusetts. The states with newfound cannabis laws are looking to Denver’s industrial market to gauge the potential impact on their own market fundamentals, CBRE wrote in a June 2017 analysis.
Arcview Market Research, a division of the Oakland-based marijuana company Arcview Group, forecasts California’s legal marijuana industry will be worth $5.8 billion by 2021. Nationally, Archview predicts revenues from the industry will soar from $6.7 billion in 2016 to more than $21 billion by 2021.
The pot industry could go up in smoke should U.S. Attorney General Jeff Sessions implements new federal policies to crack down on legalized recreational cannabis. The impact on medical marijuana is not clear.
The question of whether Florida’s real estate market could see fresh dollar signs is pretty iffy, especially on the commercial side. Currently, there are strict limits on cultivation operations. To get a grow license, an applicant’s nursery must be at least 30 years old and should also possess at least 400,000 plants in cultivation. Plus, applicants should be able to prove they have a financially viable business plan backed by $2 million for start-up costs and show licensing officials they have the ability to finance their operation for at least two years without going bankrupt.
Unless the rules change, it appears only dispensary locations could influence real estate in the Sunshine State — on the residential side. Limitations on potential retail medical marijuana sites, and bans by cities, look likely to snuff out the potential realized in other states.
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Oh Lord (& Taylor) #WeWork Buys HQ
The iconic Lord & Taylor flagship building on Fifth Avenue will soon be WeWork's new headquarters. The seven-year-old startup is buying the building, which was officially named a city landmark in 2007, for $850 million in a deal that Lord & Taylor's parent company, Hudson's Bay, hopes will help reduce its debt.
The deal is the latest example of the heightened pressures that have slammed the retail industry in recent years. And while retail giants once did well in grandiose shopping spaces, that real estate has now proven to garner more value in serving the needs of millennial workers.
Lord & Taylor has operated out of its Fifth Ave store since 1914. When it opened, "it drew 75,000 visitors, who were treated to music from a pipe organ on the seventh floor and could chose to dine in one of three restaurants on the top floor," per the New York Times. But after Christmas next year, the retailer will only control the bottom floors, and the rest of the 12-story building will be converted into office space.
Other retailers across the U.S., such as Macy's and Sears, have also been rethinking their building space as consumers increasingly choose to shop online or at specialty stores.
Meanwhile, WeWork has become one of the world's wealthiest startups with a valuation of more than $20 billion. As of Monday, Lord & Taylor's valuation is less than a tenth of that at $1.7 billion.
WeWork's joint venture real estate partner, Rh?ne Group, will also invest $500 million in Hudson's Bay, which will give the parent company more than $1 billion to help pay off its debt.
Alexa: Buy Me a House
A building company is now selling homes on Amazon that anyone can purchase online–but they are not your average humble abode.
The tiny houses, sold by MODS International, are fashioned out of shipping containers and are each 320 square feet, according to Apartment Therapy. Despite their shortcomings, the homes seem rather luxurious inside.
Each residence comes fully furnished and includes a bedroom, shower, toilet, sink, kitchenette, and living area, according to the Amazon posting. The home is also fully insulated with AC and heat, and can be hooked up for plumbing, water and electric.
Unfortunately there is no free 2-day shipping deal as the home is not an Amazon Prime item, however the listing goes for a reasonable price of just $36,000.
Who Gets @Amazon's HQ2?
Now the hard part begins...Amazon set to decide on proposals from cities trying to land its second corporate home. Many cities have gone hog-wild to lure the e-commerce giant's so called HQ2. Amazon now will decide who wins and who loses.
New York lit up some of the city’s most iconic landmarks — including the Empire State Building and One World Trade Center — in orange, Amazon’s signature color, in a bid to court the Seattle-based online retailer, which is looking to build a new corporate campus.
The Big Apple stooped almost as low with its stunt as the Georgia town that offered to change its name to Amazon to lure in the Alexa's parent.
But New York officials stopped short of dangling tax breaks, like the $7 billion on the table from New Jersey to get the web-retail giant to Newark.
The Seattle-based company said last month it plans to invest $5 billion in a second North American headquarters over nearly two decades, some of which it could recoup through hefty tax breaks.
Top Five Cities for Home Flipping
Attom Data Solutions, compiled a list of the top metro areas with the most flipped homes in Q2 of 2017 and listed them by county data, so you can plan your project accordingly.
1. Phoenix
County: Maricopa
Metro area: Phoenix-Mesa-Scottsdale, AZ
Number of homes flipped: 2,116
Average flipping profit: $54,787
2. Los Angeles
County: Los Angeles
Metro area: Los Angeles-Long Beach-Anaheim, CA
Number of homes flipped: 1,404
Average flipping profit: $135,000
3. Las Vegas
County: Clark
Metro area: Las Vegas-Henderson-Paradise, NV
Number of homes flipped: 1,207
Average flipping profit: $55,600
4. Chicago
County: Cook
Metro area: Chicago-Naperville-Elgin, IL-IN-WI
Number of homes flipped: 922
Average flipping profit: $95,000
5. Fort Lauderdale, Florida
County: Broward
Metro area: Miami-Fort Lauderdale-West Palm Beach, FL
Number of homes flipped: 863
Average flipping profit: $75,000
Have a profitable day ahead!