Governance in Action

The sizable crowd gathered for the COMMERCIAL COMMITTEE was excited to learn about plans for Swanepoel T-3 Group, led by guest speaker Stephan Swanepoel, to create an Analysis of the Latest Emerging Risks & Trends (ALERT) report on commercial real estate. The ALERT report will rely upon intense market research and interviews with dozens of members to create a powerful analytical reference tool that will provide specific insight into the near future of the commercial sector.

Notable was a presentation from Wayne D’Amico, CCIM, about the relationship between NAR and Xceligent’s™ ongoing expansion of its data offerings and commercial markets. Conceived as a platform upon which more tools can be built, D’Amico talked about the well-known challenges of sourcing quality data, made tougher by bulk import practices.

Also of interest was Emily Line’s RPR® Commercial update, reporting on member survey results conducted from May – July 2016. Highlights included 80% of RPR® users saving money, 71% of respondents believing RPR® could influence non-members to join NAR, and a walk-thru of the new commercial features available within RPR Mobile™

Q&A was lively, peaking after the update by David Greer’s team on the commercial consumer advertising campaign. The creative team responsible for the residential side’s “Get REALTOR®” tagline and strategy talked about the commercial plan’s components including online display banners, social media, and content partnership. A special 10-part series of articles in Fortune named “The Location Scouts” was touted and leveraged to promote the commercial face of the REALTOR® brand.

To read official minutes from this or any other governance meeting, please visit www.nar.realtor/national-leadership

NAR Senior Tax Policy Representative Evan Liddiard updated the COMMERCIAL LEGISLATION & REGULATORY ADVISORY BOARD on the questionable future of 1031 “like-kind” exchanges, tax extenders, and other commercial tax provisions under both Presidential candidates, focusing especially on the House Republican Blueprint for Tax Reform, which currently provides only a vague outline of the plan and its implementation. Liddiard noted that though 1031s are not mentioned, they could be limited or eliminated as a way to “pay for” tax cuts elsewhere, and thus NAR will continue its considerable advocacy effort on the Hill to educate Members on the economic benefits of 1031s, highlighting NAR’s studies and research on the topic. Commercial Policy Representatives Erin Stackley and Stephanie Spear ended the session with updates on Internet Sales Tax Fairness, EB-5 reauthorization, and the Qualifed Commercial Real Estate Exemption (QCRE) from the upcoming commercial risk retention rules (Dodd-Frank). Tough it is unlikely Congress will take any actions in the lame duck session (other than reauthorizing expiring provisions, such as the EB-5 Regional Center Pilot Program), NAR’s advocacy efforts will serve as the framework for immediately picking these issues up in 2017. Gary Reggish, RPAC Fundraising Liaison, praised commercial broker participation, congratulating the Advisory Board on making 100% RPAC participation in 2016.

COMMERCIAL REAL ESTATE RESEARCH ADVISORY BOARD featured an engaging presentation from George Ratiu, Director of Quantitative & Commercial Research, discussing NAR Research projects and activities in support of commercial real estate, with emphasis on an overview of commercial real estate research conducted from November 2015 until November 2016. Attendees expressed a strong desire for NAR to encourage various Multiple Listing Services to display commercial listings. An Xceligent™ update was provided, followed by a lively discussion on improving CommercialSearch to better challenge LoopNet. Adding more markets and enhancing member engagement with the platform were top-of-mind and a motion was approved to have Xceligent™ report back to the Advisory Board on its strategic plan to address these improvements at the next meeting in May. Te session ended with the decision to include the impact of cannabis legalization on industrial real estate in future research, citing markedly lower vacancy rates in states that support marijuana real estate.

COMMERCIAL LEADERSHIP FORUM spotlighted a live demo of the new RPR® Mobile™ commercial platform. Members were excited to learn how the app greatly enhances the REALTOR®’s ability to conduct on-location property searches and discover area-specific demographic and economic trends. National Commercial Awards honorees were recognized to enthusiastic applause. Tis year’s group included 32 members from 24 States. The forum was able to recognize Charles Palmeri, a 90-year old member from the REALTOR® Association of Sarasota & Manatee, who was in attendance. National Commercial Awards is an annual recognition program designed to highlight the service and achievements of commercial practitioners across the country. Each awardee is selected by their local or state associations and nominated by AEs.

PROPERTY MANAGEMENT FORUM featured a Legislative and Regulatory Update by Megan Booth, Senior Policy Representative, NAR, and Beth Wanless, Government Affairs, IREM®, who apprised the audience on work being done collectively to get the ADA Education & Reform Act of 2015 approved, hopefully in 2017, as well as information on current policies for accommodating comfort animals and medical marijuana usage. Chad Curry, Managing Director, Center for REALTOR® Technology, presented on emerging smart building technology and building materials science and fielded questions on how these issues can be used to better serve clients and enhance business. Curry noted that new technologies can track things like air quality data and utility usage, leading to efficiencies and savings opportunities through preventative maintenance. Cyber-security management in smart buildings was also a hot topic, with CRT Labs suggested as a resource for members in need of guidance.

The COMMERCIAL ECONOMIC ISSUES & TRENDS FORUM featured Lawence Yun, NAR Chief Economist, K.C. Conway, senior vice president of SunTrust Bank, and Cynthia Shelton, CCIM, CRE, moderating a wide-ranging discussion to a packed room. The following is an excerpt from an article originally published by REALTOR® Magazine.

Lawrence Yun said he expects rental rates in the multifamily sector to rise a modest 3% a year through 2018, fueled by young households who see solid job growth but aren’t yet ready to buy. Industrial properties — already one of the strongest sectors — are expected to see solid 4% growth in rental rates and little change in vacancies over the next two years.

Retail and office space, which are battling online commerce and telecommuting trends, will see slower growth in rental rates of about 2% to 2.5%.

Yun said the country is likely to maintain positive economic growth over the next two years, although it is likely to be sluggish: barely more than 2% in 2017, and maybe a little higher than that in 2018. Tepid business spending is mainly what’s holding back growth, Yun added, because other types of spending, including consumer and government spending, are still strong.

K.C. Conway is more pessimistic about the country’s economic growth prospects. He said growth is already starting to slow and could dip into recession at the end of the year. If so, the United States would join other big economies, such as the European Union, in seeing negative growth. Even China, which says its growth is at 6%, could see it slow to as low as 3% based on indicators that aren’t included in the country’s official figures, Conway said.

Both Yun and Conway said the economy is hurt by the lack of new housing construction, which is keeping prices high and forcing young households to delay home purchases. At the core of the inventory problem are regulations that make it hard for banks to increase their construction lending to builders. Easing those restrictions for community banks, Yun said, would help unleash badly needed financing for builders without putting the banking system at risk, since large, systemically important financial institutions would still be subject to stringent capital rules.