Lease Accounting Will Change, Commercial Markets Recovering in Places, Stimulus Jobs Surge, Investing in Industrial Real Estate

The Organization:
IAMC is headquartered in Atlanta at:
6625 The Corners Parkway,
Suite 200,
Norcross, GA 30092
Tel: 770-325-3461
Fax: 770-263-8825
Toll Free: 1-888-299-9848
www.iamc.org

IAMC is managed by Conway Data, Inc. McKinley Conway, Founder. Conway Data, Inc., also publishes Site Selection magazine (www.siteselection.com), the official publication of IAMC.

May 4, 2010 - Vol. 9, No. 13

Hot Springs, Virginia, Professional Forum Updates

Register for the 2010 Professional Forum in Hot Springs, Virginia, entitled "Real Estate: Are
You Ready for the Next Cycle?," which happens October 2 6, 2010.
The Homestead in Hot Springs, Va., is the Forum headquarters. For room reservations, call
1-800-838-1766, Ext. 1, and request the "IAMC room block." Or download the reservation form, complete it and fax it to 540-839-7922.

A mountain lake surrounded by thick forest seen from Virginia's Blue Ridge Parkway
Photo courtesy of www.virginia.gov

Lease Accounting Will Change, but When?
When the joint IASB - FASB lease accounting standard takes effect some time next year or later, most leases will be tallied on the balance sheet, whereas today many are not. For a few companies, the change will cause major financial reporting headaches. No one is sure yet when the new standard will take effect. The accounting organizations say the first half of 2011, but this is considered by insiders a no-sooner-than date. A white paper by the real estate company Transwestern entitled "Accounting Standards: Proposed Major Changes and the Potential Impact on Commercial Real Estate Leases" says, "Under the proposed standard, a lessee would likely see the following results: interest and depreciation will be recorded instead of rent expense; due to the declining nature of interest, higher expense incurred during the first half of the lease term, but lower expense during the second half of the lease term as the effect reverses; less of a financial impact on short-term leases, which results in less of an impact to the balance sheet. However, if a renewal is likely, the standard may require capitalization of the renewal period; 'right of use' asset and an obligation to pay rent liability will be recorded on balance sheets; impact to EBITDA3, financial ratios and company valuations; and more complex accounting and administration due to calculating and reporting the leases."

Participate in IAMC's Online Business Networking
Stay "linked in" year-round with fellow IAMC members through IAMC's LinkedIn online business networking group, which is open exclusively to members. Once you join, you can post discussion items for group input and share your knowledge by answering others' questions. If you're not periodically checking IAMC's discussion group, you're missing some great CREM Q&A. IAMC Executive Director Ron Starner posed this question to the IAMC Group: "What is your favorite take-away from the Spring 2010 IAMC Professional Forum, held earlier this week at The Broadmoor in Colorado Springs?" He has received five responses, including this one:

Source: blog.linkedin.com

[This was] my first IAMC Forum, and I was impressed with the professionalism of the attendees and their expertise. Interaction with the Active members was easy.

To jump to the LinkedIn logon screen, click here. Once logged on, go to the top of the left-hand column and click on "groups." For more information on LinkedIn or the IAMC Group on LinkedIn, click here.

Find a Real Estate Job; Post an Opening; Post a Resume
Go to the IAMC Career Center to read about dozens of corporate real estate, economic development and real estate service provider jobs. Here's an example: Manager Real Estate Operations, for Crown Castle International Corp. The job description says the position "oversees and manages resources and processes of the Real Estate Billing Operations and Real Estate Operations Control teams; and manages performance and ensures that staff members have the skills necessary to perform the job."

Short Subjects

Commercial Markets Recovering in Places; Challenges Remain

A few commercial real estate markets are beginning to firm up after the credit crisis and ensuing economic downturn. The recession is over, but research by CCIM and the Real Estate Research Corp. finds a number of impediments to a quick commercial real estate recovery. These are reported in the RERC/CCIM Investment Trends Quarterly.

Stimulus Jobs Surge in Early 2010

The slow development of new jobs from the federal stimulus program has ignited criticism of President Obama's recovery plans by both Democrats and Republicans. But recent data suggests that the flow of jobs is beginning to increase. Tami Luhby writes, "The White House's $787 billion stimulus plan funded 682,779 jobs in the first quarter, administration officials said Friday. The figure captures the number of people whose jobs were directly paid for with stimulus money, such as teachers, cops and road construction workers. It's based on more than 179,000 reports filed by state, local and corporate recipients."

Investing in Industrial Real Estate

As investors begin to look again at commercial real estate, financial advisors suggest caution and careful research beforehand. The article "15 Things to Consider before Investing in Industrial Real Estate" lists the items and issues every investor should look into before signing any agreements and writing any checks.

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