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

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.

Ugly Index

Double dip...or buy opportunity?

(*Note neither the 10 nor 20 city Case-Shiller Home Price composite indices directly incorporate the KC market, but they're still useful for capturing trends in other major metros/nationally.)

How Stressed is KC's Housing Market?

Relatively, not very. Of course, things still aren't exactly rosy, but in this recent analysis by the Wall Street Journal, out of the 49 most populous U.S. metro areas, only three had lower "housing-stress indicators" than Kansas City. Factors considered included percentage of income spent on housing, percentage of population without health insurance, and percentage of population not working. The Miami area was rated as the most stressed, with three California metros close behind. Perhaps this is yet another indicator that much of so-called fly-over country is actually, in the words of urban development scholar/commentator and recent LWREC speaker Joel Kotkin, a "zone of sanity."

A New Way To Present Your Development Projects

I hear they look even better in person. 

Presidents Club: A Powerful New Voice in KC Real Estate

A who's who of Kansas City's commercial real estate elite was recently assembled by LWREC director Walt Clements to address important local economic development and real estate issues. In addition to weighing in on policies of concern to the greater commercial real estate community, the group, known as the Presidents Club, will foster the development of the UMKC Lewis White Real Estate Center, including its intended launch of a new real estate masters program by the fall of 2011. Both the advisory group and the masters program will be invaluable sources of guidance and innovation for the region's real estate sector in the years ahead. Read more...

Infrastructure

Infrastructure (an incredibly broad category) location, capacity, and condition are critical factors in real estate investment decisions. Economic slowdowns and resulting contractions in tax receipts and budgets for local governments tend to lead to particularly pronounced infrastructure deficiencies. Something of a negative feedback loop can emerge in such an environment, given the heavy reliance of many local government revenue streams on real estate activities. In some cases, funding shortfalls and forced resource reallocations lead to reworkings of infrastructure funding channels and project processes (selections, approvals, reviews, etc). For example, recently, federal stimulus funds have trickled through to select infrastructure projects. Private, public-private, and community-based efforts can also offer alternative means of infrastructure provision. But there remain innumerable project wishlists and maintenance backlogs dispersed across our city and beyond in need of creative solutions. Here's a smattering of links to current KC infrastructure-related stories and organizations:

"Chamber: Kansas City infrastructure shortcomings hurt business"

U.S. 71 upgrades coming

Green infrastructure

Christopher S. Bond Bridge project

KC Design Center

City's new infrastructure manager