Volume 1 December 2010

FASB: The Law of Unintended Consequences – Proposed FASB Accounting Rule Changes for Leased Real Estate May Be a Genuine Threat to Commercial Real Estate

Doing business in the United States is about to get a whole lot more complicated and expensive. Recent proposed rule changes by the FASB (Financial Accounting Standards Board), if set in place, will have a dramatic and severe impact on the way that US companies treat their leased real estate. If the proposed FASB change takes effect all lease expense-based accounting will be eliminated and all leases will be treated as a debt obligation to be reported on the balance sheet. The proposed standard replaces FAS 13 in the United States and will affect companies that lease real estate in the following manner:

• There will no longer be any difference between operating leases and capital leases, meaning the elimination of  ‘off balance sheet’ accounting

• Leases will be capitalized based on the present value of the lease obligation – a straight line rent expense will disappear to be replaced with interest expense for an asset financed by debt

• The capitalized lease value will include the base rent, residual payments, obligated renewals – any renewal options that are likely to be exercised are added to the overall amount of the liability

• Balance sheets will show all leases as a debt liability

• Pre-existing leases will not be grandfathered

• Corporations with multiple locations will be burdened with complex reporting and administrative costs

Read More >
 

Marine Industries Association of South Florida

Other than having to deal with the Thurston Howell III jokes, we recently joined the Marine Industries Association of South Florida (MIASF). It is a cool group of people, especially if you love boating. Supporting MIASF is also good business for our local economy.

Mission: The MIASF is a not-for-profit leadership organization created to promote and protect the sound growth of the marine industry in South Florida for the benefit and education of its members, the community and the environment.

Fort Lauderdale show sees boost in attendance: Attendance at this year’s Fort Lauderdale International Boat Show, which concluded November 1, ran about 5 to 6 percent ahead of last year’s show.

Search Marketing & Social Media Commentary

We’ve been invaded by the over-communicators and live in the land of instant messaging. To some degree, we have joined the chatty online world, with a Twitter account and active Blog. We also stepped up our web presence and work with some talented Internet marketers to point search engines toward our site. We even funded a Google Adwords campaign for a handful of months – and pulled the plug when it wasn’t working – by which we mean, it was not generating business leads our way.

And then out of the blue, the phone call from Los Angeles. The caller said we had the #1 Google ranking for ‘Miami Tenant Representative’ and handed us an assignment to procure a business site and negotiate a lease for his client. It’s not a huge deal or fee, but it does support the notion that contemporary marketing should probably be supported by some Search Marketing and Social Media.

Featured Property

Airport Commerce Park
4101 Ravenswood Road
Ft. Lauderdale, FL 33312

• Fully Remodeled Business Park

• Easy Access to I-595, SR-84, Florida's Turnpike & I-95

• Adjacent to Ft. Lauderdale International Airport

• Minutes to Port Everglades and Downtown Fort Lauderdale

• Aggressive Pricing

• Small Suites Available

• Secure Access After Hours

• No Common Area Factor

• Efficient Energy Systems

CONTENTS:

- Is Proposed FASB Change a Genuine Threat to CRE?

- The Market is Flat? We Beg to Differ.

- Marine Industries Association of South Florida

- Search Marketing & Social Media Commentary

- Featured Property: Airport Commerce Park

The Market is Flat? We Beg to Differ.

A recent GlobeSt.com story featuring the third quarter report of a respected competitor characterized the South Florida commercial real estate market as “flat.” Maybe it was for them. We beg to differ, having closed seven transactions totaling 43,000 square feet in a recent 30-day period. (remember, it is not bragging when it is true)

Of the seven leases, five were new deals in which the tenants relocated from a previous location, one was a renewal at an existing location and one of the transactions included a new tenant to the marketplace.

After the summer doldrums, activity suddenly went ballistic. It’s as if companies have been suffering from ‘limbo fatigue’ and decided to get on with their lives and businesses and do something. We think the worst is over for Broward County commercial real estate. Here are the leases.

• 14,137 sq. ft. at 350 Jim Moran Blvd.

• 8655 sq. ft. at the Airport Corporate Park

• 8,000 sq. ft. at the 1830 Main Street Building

• 3,511 sq. ft. at the Sawgrass Business Plaza

• 2,872 sq. ft. in the Bank of America Plaza

• 890 sq. ft. in the Bank of America Plaza

• 5,134 sq. ft. in the Bank of America Plaza

For complete transaction details, click here >