20A — July 24 - August 13, 2020 — M id A tlantic Real Estate Journal
www.marej.com
M id A tlantic R eal E state J ournal
Top ten issues affecting real . . .
Managing director brings 23 years of experience ASCSP elects CRS’ Robert Rahner to Board of Directors T
continued from page 14A in short-term debt obligations, 6) all cash, other than neces- sary reserves, must be distrib- uted on a current basis, and 7) the trustee cannot enter into new leases or renegotiate the current leases unless there is a need due to a tenant bank- ruptcy or insolvency. Drawbacks to investing in DSTs include liquidity and lack of control. DSTs are not like the stock market where shares can be bought and sold in real time. Additionally, DSTs are managed by profes- and Investments, LLC. About Kay Properties and www.kpi1031.com Kay Properties is a nation- al Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the mar- ketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor com- panies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experi- ence, are licensed in all 50 states, and have participated in over 15 Billion of DST 1031 investments. This material does not con- stitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confi- dential Private Placement Memorandum (the “Memo- randum”). Please read the entire Memorandum paying special attention to the risk continued from page 12A continued from page 2A confirmed how quickly debt and equity capital liquidity can stop flowing when risk and returns are difficult to measure. “One thing we have seen since March is that volatility has spiked which makes pric- ing debt more challenging,” said Zellers. “Federal interven- tion helped to limit a complete seizing of the markets, but doesn’t necessarily mitigate the longer-term concern about defaults and loses. While pric- ing stability and liquidity appear to have somewhat re- turned, late payments and loan defaults have seen a significant increase.” The remaining issues identi- fied by The Counselors of Real Estate are Public and Pri- vate Indebtedness, Affordable
sional investment real estate asset managers and property managers, so investment deci- sions are at their discretion. Taxpayers should be aware of both the benefits and draw - backs of a properly executed 1031 exchange into a DST, but this can be a great option for a long-time real estate investor to still remain in the industry without the manage- ment commitment as well as defer the recognition of a tax- able gain to the future. Ryan Williams is tax su- pervisor at Withum. MAREJ section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes there- fore you should consult your tax or legal professional for details regarding your situa- tion. There are material risks associated with investing in real estate securities includ- ing illiquidity, vacancies, gen- eral market conditions and competition, lack of operating history, interest rate risks, general risks of owning/oper- ating commercial and multi- family properties, financing risks, potential adverse tax consequences, general eco- nomic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appre- ciation are not guaranteed. Securities offered through WealthForge Securities, LLC. Member FINRA/SIPC. Kay Properties and Investments, LLC and WealthForge Se - curities, LLC are separate entities. MAREJ Housing, Flow of People, Space Utilization, Technology and Workflow, Infrastructure, and ESG (Environmental, Social, and Governance), respectively. “Clients of Counselors seek unbiased, objective advice on the critical factors that will impact all property sectors today, as well as those issues that may affect their decisions over the next ten years. This thought leadership initiative is an invaluable service to those clients and to the real estate industry in general.” The Top Ten Issues Af- fecting Real Estate is de- veloped by The Counselors of Real Estate’s External Affairs Committee, with issues identified, debated, and voted on by the general membership. MAREJ
property owners should ex- pect providers to wear masks, ensure minimal and distant contact with property person- nel, and self-quarantine should they experience any virus symptoms. Beyond these mini- mum efforts, Cost Recovery Solutions LLC has been work - ing with clients to customize the best approach to complet- ing their studies based on site availability and client comfort levels. Examples include offer- ing phased-approach site visits and contactless options such as combining in-person exterior inspections with Matterport or other virtual imaging technolo- gies for interior inspections. As the CRE industry con - tinues to look for relief from COVID-19 effects, implement - ing cost segregation as a tax strategy may be a critical way for investors to regain signifi - cant lost ground and plan for the uncertain future. Robert Rahner, CFA, ASA, CCSP, is the managing director of Cost Recovery Solutions LLC. MAREJ at CPC. “We’re proud to part - ner with Tryko to provide the financing to help preserve the Harrisburg Park Apts. Fred- die Mac’s TAH provided the terms and process our borrower needed to get the most out of their refinance and achieve their goals.” MAREJ Solutions LLC, he personally oversees all of the firm’s proj - ects, which encompass the retail/office space, health care, multi-family residential, food service, hospitality, telecom- munications, manufacturing, consumer business, energy, transportation and technology industries. He is also certified to provide continuing educa- tion to commercial property/ accounting professionals and has been featured as an expert author in several industry publications. Prior to managing the firm, he was a senior manager with the Deloitte Financial Advisory Services practice. He attended Rutgers University, earning both a mechanical engineering degree and an MBA. He also holds multiple Accredited Senior Appraiser (ASA) des- ignations from the American Society of Appraisers and is a Chartered Financial Analyst (CFA) . MAREJ
for cost segregation providers. Because of the wide range of services offered in the indus- try, The American Society of Cost Segregation Professionals (ASCSP) was formed to help establish credentials, create/ maintain quality standards and provide a code of ethics for the industry. Approaches used to perform studies range from detailed engineering approaches, either from actual or estimated costs; those relying on contractor sur- veys, residual cost estimations, or sampling/modeling of differ- ent facility types; or a “rule of thumb” approach, which uses little or no documentation at all. While there is no specific ap - proach required by the IRS, it states that a fully engineered study generally “is the most methodical and accurate ap- proach, relying on solid docu- mentation of the construction costs andminimal cost estimat- ing.” It also points out potential problems in obtaining accurate INTON FALLS, NJ - Cost Recovery So- lutions LLC (CRS) congratulates managing di- rector Robert Rahner on being elected for a third term to the board of the American Society of Cost Segregation Professionals (ASCSP) , the industry’s premier resource for education, credentials, techni- cal standards and the highest code of ethics. Rahner has been a member of the non-profit organization since 2008 and is also a former ASCSP Educa - tion Committee Chair. Rahner looks forward to his next two-year term. “The ASCSP has been a valuable ca - reer resource for me through- out the years, and I’m glad to help it grow by serving on its volunteer board. We are com- mitted to serving investors and their accountants with integrity and keeping up with the pulse of the ever-changing tax environment as it affects
data or sufficient documenta - tion to support project cost al- locations using any of the other methods. Due to COVID-19 restrictions on building access, some providers may seek to cut corners with one of the less de- tailed study approaches. Own- ers and accountants can trust that providers with an ASCSP designation have the advanced expertise to substantiate their depreciation deductions and property classifications. This helps ensure the validity of the study that can provide much- needed tax relief in the wake of COVID-19. What safety measures should I expect from my provider? Cost segregation profession - als have had to adapt to the fluid environment in which we all find ourselves. While less accurate study approaches relying on surveys, samples or the rule-of-thumb methodol- ogy can be performed without entering a property, a site visit is still preferred to create a supportable study. In this case, Apts. located at 1410 South 15th St. in Harrisburg which is owned by Tryko Partners . “In this challenging time, it’s more important than ever to en- sure that our communities have access to the affordable housing they need,” said Doug Olcott , senior VP and regional director our industry,” he reflects. An integral component to Rob’s commitment to excel - lence is his designation as a certified member (CCSP) of the ASCSP. Becoming a CCSP requires a minimum of seven years of technical experience, rigorous training and testing only achieved by a select few, and is the highest credential in the cost segregation industry. Rahner has 23 years of experience in cost segrega- tion and tangible asset ap- praisal services. As manag- ing director of Cost Recovery
Kay Properties creates online . . .
continued from page 11A Cost segregation in a COVID-19 world: a key tax strategy . . .
Delaware Statutory Trusts: 1031 . . .
HARRISBURG, PA — The Community Preservation Corporation announced the closing of $10.2 million in financing through a Freddie Mac Optigo Targeted Afford- able Housing (TAH) loan to re- finance 163 units of affordable housing at the Harrisburg Park CPC announces $10.2M to refinance 163 units in Harrisburg, PA
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