Archive for category: General Information

By Donald Swartz, President

Happy New Year to everyone and I trust the year if off to a fast start! I know a popular thought to begin the new year involves New Year’s resolutions – losing weight, exercising more, eating healthier, watching less television, spend more time with family… The list is extensive and if we’re honest, can be quite repetitive.

My resolution and goals heading into 2023 are simple, yet challenging. Namely, I want to think outside the box.

What does that mean? I want to find additional ways to create value for our clients and prospective clients within Indurante and Swartz; I want to create a larger footprint so more people know about our companies and services we provide; I want to become a better promoter of my companies (not necessarily my strongest asset!)

For me, thinking outside the box to accomplish these goals has been accomplished in one fell swoop.

 

Please say hello to David Swartz.

After 30+ years in the financial industry, working with various insurance products and wealth advisors, David has decided to join the company and focus on business development. As David says, he is both a Swartz and an associate of the company, so this seems easy and natural.

Living in Des Moines, our hope is to build on our solid foundation created over the years and grow our client base. David’s strengths match our Core Values – he is ethical, professional, entrepreneurial and client focused. (Not to mention older and wiser!) We’ll work on the expertise side together. 😊

I am very excited to have him join the ranks and look forward to his presence, thoughts and energy as we get started in 2023.

This will be a challenging and fantastic year rolled into one.

With reassessment in many states occurring in 2023; adjustments continuing in interest rates; supply chain issues easing in the rail world and many other factors presenting themselves in valuation of equipment and real estate, I believe I have already achieved the goal of thinking outside the box. Have you?

As always, I appreciate your feedback and commentary. Please email me directly at dswartz@swartzaii.com or dswartz@indurantetax.com.

To reach out to David directly – please contact him at David.swartz@swartzaai.com.

By Donald Swartz, President

Last week, Kristen Canfield and I attended the 2022 RSI Expo and Technical Conference. We made the decision to attend based on the fact we hadn’t been able to go to conferences and felt this would be a good opportunity to see clients and potential clients face to face. Additionally, the technical sessions would provide us with information relating to the railroad industry for the coming year – trends, supply chain issues, technology updates…. all components we are interested in for potential discussion with State Assessors on the valuation of railcars for property tax purposes in the coming year.

The conference did not disappoint, as we were able to meet several individuals throughout the conference who were either interested in our services, were existing clients of Indurante or wanting to become more involved in the industry. It was a great couple of days and we look forward to attending next year’s Expo in Indianapolis.

A big thank you to our client, Trinity Industries for hosting a wonderful dinner at the Ashton Depot.

October Happenings

This has been a busy month as we recently completed our 2023 planning meetings for both Indurante and Swartz. With reassessment looming in Missouri, Iowa and Colorado for the 2023 tax year; rising interest rates, a softening of the real estate market and several articles focusing on a short term (or longer term) recession, property taxes will be a topical concern for most, if not all, owners for commercial real estate, machinery and private railcars. We anticipate a busy year and we want to make sure we’re ready to handle the needs of our clients.

Undoubtedly, counties will be relying on sales data from the past 2-3 years to support their opinions of value for the coming year. Will these sales be reflective of the market place as of January 2023? For income producing properties, what capitalization rates will be employed to calculate values based upon the Income Approach?

These are the big questions taxpayers will face and we’re preparing for the appeals process set to occur in the spring and summer of 2023. As we finish up a successful 2022 season, we know our services will be in high demand heading into 2023!

Please reach me directly to see how we can be of benefit to you – dswartz@swartzaai.com or dswartz@indurantetax.com.

By Donald Swartz, President

Last month, I had the opportunity to attend the Wichita Property Tax Conference (formerly the Appraisal for Ad Valorem Taxation Conference). This is an annual conference attended by State Assessors, members of respective State Departments of Revenue, consultants in the property tax area and businesses with property tax liabilities valued by the state (properties such as rail, pipeline, telecommunications, energy, etc.)

This year was the 50^th anniversary of the conference, and the first in person meeting since 2019.

I initially attended the conference in 2017 during my early conversations with Pete Indurante and the prospects of acquiring his company.

At the time of the 2018 meeting, we had not quite finalized the transaction, so I again attended as an interested consultant. Unfortunately, I missed the 2019 conference due to my accident and the in-person conference was not held in 2020-21 due to the pandemic. I was anxiously (and excitedly) awaiting the 2022 conference as this would be my first conference as owner of Indurante & Associates, Inc. (Indurante)

Indurante is a member of the influential Railway Supply Institute and as part of the RSI Tax Committee, we annually share in hosting a hospitality suite during the conference.

To say my expectations were met would be a complete understatement.

Members of the committee were warm and engaging; excited to learn about me and the technology we have implemented within Indurante.  Mark Phillips (Manager) and Noelle Giacomino (Director) attended the conference with me and to see them interact with various governmental officials, our clients and other RSI committee members was a true pleasure for me to witness.

I attended the educational breakout sessions and speakers, but my true focus this year was to show my face as the “face” of Indurante. Very exciting and very fulfilling!  I am already looking forward to the 2023 conference.

Speaking of conferences, in September, I will be attending the Entrepreneurs Organization’s EO XCentric in Cincinnati.  As a member of EO Kansas City and Board Member of the Kansas City Chapter, this is an event dedicated to the US Central Region of EO Chapters. I have not previously attended this event, but if it is anything compared to the EO Global Leadership Conference earlier this year, I am very interested to meet fellow business owners, entrepreneurs and the learn from engaging speakers spanning a full spectrum of topics.

If you are a business owner and would like to learn more about EO, I strongly encourage you to click on the following link – Entrepreneurs’ Organization Home (eonetwork.org) or contact me directly (email below) as I would be thrilled to let you know more about my involvement and what EO membership provides for me.

It is hard to believe the summer is coming to an end, but the fall looks exciting as we begin to ramp up for reassessments in Iowa, Colorado and Missouri in 2023. We are also looking at the relaxing of sales in the residential and commercial markets and will be interested to see how the counties respond with their valuations next year.

Thank you for your continued interest in Swartz & Associates and Indurante.

As always, please reach me directly at either of the following addresses as I would love to hear from you and what issues would be of interest to you. dswartz@swartzaai.com or dswartz@indurantetax.com.

This morning on my way to the office, I made the decision to stop for fuel as the needle on the gas gauge illuminated a bright yellow warning, “Don, let’s not be stupid about things…” So, I casually filled the tank until I decided $50.00 was my limit. Well, that did not quite get us to the “F” but close enough for the weekend. Just under $5.00/gallon currently, which I know doesn’t seem too bad if you are reading this from either coast or living in a bigger city, but for Kansas Citians, this is a BIG DEAL.

Watching the Dow drop 1,000 points this week; the Federal Reserve increasing rates an additional 75 basis points; utility costs rising and the overall cost of living on the rise, I am concerned when the real estate market, both residential and commercial, will be negatively impacted. Not IF, but WHEN…

In the property tax world, valuations continually lag what is transacting in the current markets. 

Assessors must value property on a particular lien date, in many cases January 1. When the pandemic initially hit in March of 2020, the pushback from most counties came in the form of, ”As of January 1, we were not in a Pandemic”, and even more challenging, several states assess properties every other year, so the valuation date may have been January 1, 2019.

Interest rates remained historically low during 2020 and 2021, creating opportunities to purchase/invest in real estate and take advantage of the low interest rates being offered. Investors were willing to accept lower yields on their investments as the cost to borrow was so inexpensive.

We have now witnessed in the past 2-3 months how quickly things can change.

How will all of these real estate acquisitions which have transacted over the past 24 months affect the value of real estate from a property tax perspective? Will jurisdictions push to keep values high based upon sales the past two years? Will they factor in rent concessions which took place in 2020/21 in order to keep existing tenants in place? Will residential, multi-family, warehouse and distribution type properties continue to soar in value, or will we see a softening in the market place over the next 6 months? What about the sectors that have been slower to recover? Hospitality, retail, office, sit down restaurants, theaters… Certainly reasonable questions, but the answers may be a little more challenging.

Approaching my 37^th year in the property tax world, I have witnessed and participated in the highs and lows of the real estate market. I can assure you we will be ready to assist owners and property managers with their valuation needs. We anticipate the 2023 – 2026 could be bumpy ride for owners of commercial, industrial and residential real estate. Let us help make the ride a little smoother.

As always, I am appreciative of my clients and my always growing readership. I would welcome feedback to either email – dswartz@swartzaai.com or dswartz@indurantetax.com as well as posting in the comments below.

By Donald Swartz, President

In our weekly Monday morning meeting, my challenge to the group for 2022 is to spend more time discussing contacts we have made, marketing efforts, events to attend and other concepts to promote brand awareness. Over the past several years, we’ve used our Monday meetings to discuss current caseload, property tax hearings on the horizon and general bantering about our pipeline of property tax cases. I have found when we focus too much on the appeals and work we do, we can lose sight of the potential opportunities in front of us.

The Balance

The challenge of balancing the work in place and seeking opportunities to expand your customer base is a fine line when operating as a small business. There are certainly tools available to assist in the organization and follow up (CRM software, database development, and in person events.) But ultimately, the burden falls on your team members to make things happen; to initiate conversations; to attend various events…. Sometimes that can be overwhelming and hiding behind a desk and working on the projects in front of you allows people to stay in their comfort zone. While this can create work efficiencies, it’s important to get out of the comfort zone and create interactions.

Face to face interaction is finally coming back – in person meetings are being scheduled; conferences and seminars are being attended and conversations are taking place. The conversations may be politics, issues in Ukraine, the cost of gasoline, the cost of groceries, rising interest rates and maybe even sports! For those who read my blog regularly, feel free to blast my non-sense about my Hawkeyes reaching the Final Four, while the J-Hawks are left watching on the sidelines. I guess I missed that prediction by… “just that much…” No betting sports app for me just yet!

Anyway, the fact that these conversations are occurring and opinions are being offered, provides an opportunity to listen and determine how this will affect our businesses. Will continual increase in interest rates slow down the hot residential and commercial real estate market? Will the rising costs of labor and materials slow down new construction demand? How is the remote working environment making its mark on office space?

I was on a conference call this afternoon and the discussion turned to a downtown Central Business District in a decent sized metropolitan area possibly reaching a potential 40% vacancy rate by mid 2023. That will have a significant impact, not only on the landlords, but the surrounding supporting businesses – restaurants, convenience stores, specialty retail, etc.

Counties have been aggressively raising property tax values in an effort to match the market.

We need to keep an eye on the summer and fall activity, but my hunch is that it will be time to put the brakes on rising property tax values. Whether this occurs in the fall of 2022 or summer of 2023, the conversations I hear tell me there is change in the wind.

As always, we will be here – ready to answer any questions and representing your property tax interests. Thank so much for your continued support.  If you have any questions about your commercial property taxes, please reach out to me at the following: dswartz@swartzaai.com or dswartz@indurantetax.com.