Friday, May 20, 2011

New Federal Lease Accounting Standards

The upcoming changes to the Federal Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) will dramtically change how leases are shown on an organization's balance sheet.

Long-term leases have often been an off-balance sheet item, and some argue it was a tool for corporations to hide what is essentially "debt" in the form of monthly payments to a landlord. The new regulations will require these leases to instead be shown on the balance sheet as a long-term liability which will instantly impact debt-to-equity ratios and could trigger default clauses in some corporate contracts. Despite the pain of transitioning to the new system, proponents of the new standards argue it will allow a higher level of corporate transparancy and accountability.

On June 14, 2011, Walter Clements, CRE, CCIM, FRICS, Director of the Lewis White Real Estate Center along with David Donnelly, PhD, Professor of Accountancy for UMKC will co-instruct a seminar geared towards informing real estate professionals to learn how to proactively prepare their clients for this upcoming change in accounting rules. More information can be found here: http://www.bloch.umkc.edu/centers-institutes/lewis-white-real-estate-center/online-registration/real-estate-leases/index.aspx

Wednesday, May 11, 2011

Briarcliff Named as Master Developer For 'Horizons'

The city of Riverside, Missouri finalized a master development agreement yesterday with a unit of Briarcliff Development for the 'Horizons' site at I-635 and Hwy 9. The master plan (see above) was designed in conjunction with BNIM Architects and is comprised of 1.1 million square feet of office space set in a series of tree-lined canals along with 1.5 million square feet of industrial space.

Riverside, with its relatively sizable tax income from casino earnings, has spend millions over the past several years on infrastructure, including a large levee to prepare the site for development. Briarcliff is now the 6th developer since 2002 to attempt development of the site, but with its highly successful retail and office experience in the Northland, Briarcliff may just have the right combination of skills and knowledge to turn this blank canvas into a crown jewel for Kansas City as a whole.