Big news just in the past few weeks that affect CRE owners and new investors.
Number 1 -- Congress has delayed an accounting rule change that negatively impacts property owners, both corporations and private individuals. The proposal called for referencing options to purchase or options to lease as liabilities on the balance sheet. Specifically, if you were in the middle of a lease term, and in your contract you have two 5-year renewal options (meaning you have the option to continue another five years, to start), the proposed accounting rules would have required that it be shown as a 10-year liability. For publicly traded corporations, this would negatively impact balance sheets and impact share pricing in the future. For private individuals, it would similarly impact the balance sheet, perhaps lowering credit scores and potentially interfering with an individual's ability to get a loan.
Number 2 -- The Small Business Administration has announced it is expanding its commercial refinancing program, which is a win for struggling business owners.
Number 3 -- Congress has KILLED (okay, we can also say "repealed") a controversial new provision in the controversial health care bill that required anyone spending more than $600 with any one vendor in a calendar year to issue an IR Form 1099 to that person or entity. So if a company or individual buys a new computer for $600 or more, they would be required to issue a 1099 to Egghead, or Amazon, or from whatever or whomever they purchased it. As a colleague asked this afternoon, can you imagine Staples, or Best Buy being covered in a blizzard of paper every week to comply? In our business, it would have been burdensome for owners and their agents, alike. It was government intrusion at its worst, sold as a means to fund the new healthcare program and, allegedly, to battle tax fraus. Congress, thankfully, has killed it.
Things are looking up.