General Information Archives - Page 11 of 14

The Swartz Report: Machinery and Equipment Appraisals

March 16, 2022/in General Information/by Swartz + Associates

Yesterday, Gary Stone and I had lunch with good friend (and Advisory Board member of Swartz + Associates, Inc.) Laird Goldsborough and the managing partner of his company, Jason Roos. We wanted to discuss the necessary components, skills, ego (??) and any other attributes in growing a business or a sector of a business.

One of the takeaways from our meeting is the fact that it’s too easy to get caught up in the day-to-day activities; to continue to be an analyst and not a marketer; to sit behind a desk and only work on the projects in front of you. Does this sound familiar?

My focus over the past several months has been placed primarily on the following:

The increasing values of real estate.
The software development and efficiencies we have created with the Indurante practice.
Business personal property consulting and compliance filing for our clients.

Machinery and Equipment Appraisals

Rarely do I find myself presenting a niche practice within our business. This niche is appraising machinery and equipment for our client’s needs. Whether a bank needs a valuation on equipment for collateral purposes; an attorney needs a valuation on equipment as part of family trust; an accountant needs a machinery valuation as a carve out to a business valuation for a merger or acquisition or an owner is considering liquidating assets, this is a specialized area where Gary is the recognized expert.

As an Accredited Senior Appraiser of the American Society of Appraisers, Gary earned the ASA designation in Machinery and Technical Specialties. In fact, he is only one of a handful of accredited appraisers for this specialty in the Midwest. This area is underserved and my goal is to promote this practice, create awareness and cement relationships with those who may need this service on a consistent basis.

So, consider this my initial effort to promote our equipment valuation practice. I promise to report updates throughout the year as we make this a concerted effort. Stay tuned!!

March Madness and St. Patrick’s Day

Of course, I would be remiss if I didn’t mention St. Patrick’s Day and the annual March Madness surrounding these next two weeks. I’ve reviewed my last few years of the March blog and at least I’m consistent!! The difference this year? Look for my Iowa Hawkeyes to be in the Final Four ???? (This will disappoint my KU friends and associates as we could potentially meet in the Round of 16). It has been 42 years since we have graced the Final Four and who knows… and Happy St. Patrick’s Day to everyone!

Please reach out to us with any questions concerning equipment valuations, property values and railcar assessments. As described above, please reach out to Gary directly with questions concerning the appraisal of equipment. You may contact him at .

– Don

The Swartz Report: The wild ride of property tax increases is in full force.

February 17, 2022/in General Information/by Swartz + Associates

Happy belated Valentine’s Day to everyone! I hope your Super Bowl weekend and lead in to the 14^th was filled with sweet chocolates and parties for the Big Game. As a longtime Chiefs fan, I must admit to not having my “heart” in the game. Still reeling from the second half collapse against the Bengals, the game didn’t have much attraction for me and I feel like a… a… Patriots fan??? How did I become one of them so quickly? It was only a few years ago, we were at the bottom of the well, looking like we would never see the light of day. And now, a casual attitude to historically one of the more enjoyable weekends. But I digress…

Quantitative Easing

I recently watched an interview with Christopher Leonard, author of The Lords of Easy Money: How the Federal Reserve Broke the American Economy. I found his comments extremely interesting about what sort of effect the concept of Quantitative Easing will have long term on the real estate market as well as the valuation of equipment owned by manufacturing companies.

Generally, the idea revolves around the Federal Reserve creating money to de-value the dollar; create cheaper debt and increase asset prices. As the author describes with so much money available, it becomes necessary for money to find a home to make more money, or in Leonard’s words, “Searching for Yield”. We’ve seen this as the residential real estate market continues to push upward; commercial development continues at a blistering pace and those with money to invest are turning to real estate opportunities.

Increasing Valuations

Certainly, the assessor’s offices around the country have been taking notice as valuations have increased in many jurisdictions by 30% and even higher. It’s a difficult argument when sales of commercial properties support these increases and lower capitalization rates drive the value of income producing properties upward.

As an example, if a typical investor were looking for an 8% yield on a property that is achieving net operating income (exclusive of debt service, depreciation and amortization) of $100,000, it is fair to assume the value of the property is around $1,250,000 ($100,000/.08). Suppose another investor looks at the same property, creating the same NOI but this investor is willing to achieve a 5.5% return on the investment. Nothing about the property has changed – the income generated and the expenses are the same, however the anticipated yield has dropped to 5.5%. This creates an increase in the value of the property to over $1,800,000 ($100,000/.055). The fundamentals of the income producing property are identical, but the lower yield creates a valuation increase of $550,000.

Important Questions

Can current owners raise their lease rates? Can they pass the tax increases along to their tenants? And if so, what are the prospects of a tenant remaining in place once their lease expires? The COVID-19 world has created a significant amount of available space in the commercial markets as the hybrid working environment may have a permanent place in society. What sort of long-term effect will this have in the commercial real estate world? All are good questions and subject to consideration as the new valuations on properties are being issued over the next 30-60 days.

Hold on to your hats – the wild ride of property tax increases is in full force. As always, you may reach me directly or to discuss your portfolio.

We welcome the opportunity to assist you!

The Swartz Report: Looking forward to navigating 2022 with you!

January 18, 2022/in General Information/by Swartz + Associates

Happy New Year to all! I trust everyone has had their share of holiday snacks and beverages; created their resolutions for this year (and have not broken too many of these yet ????) and have a game plan for goals and priorities for 2022.

I certainly have had my share of the above. I may have partaken so much in the snacks and beverages they have literally materialized on my footwear! (Okay, a slight exaggeration, but take a look and you tell me!)

This leads directly into resolutions – less eating, less drinking, more exercising… Boring, boring, boring. If this forces my footwear to become nothing more than bland blue or black, NO THANK YOU! Bring on the pizzazz and more drinks for everyone!

Looking Forward to 2022

In all candor, I am very excited about the year in front of us and our abilities to assist owners of commercial real estate, tangible personal property and private railcars. As I have mentioned in previous postings, the pandemic has been a boon to certain aspects of the real estate market and a severely negative impact in others. How will the jurisdictions handle their valuations for the upcoming year?

Certainly, school districts continue to need more funding and as more than 70% of property taxes collected directly flow to the schools, there is pressure to maintain (or increase) valuations for this year. Reports indicate that although consumer spending has increased during the 2021 year, the numbers have not reach pre-pandemic levels. Various economic forecasts believe 2022 will be another challenging year and we may see numbers below pre-pandemic levels again. Factor in the Federal Reserve’s estimate of three interest rate increases, it is hard to imagine the real estate market continuing to soar as it has the past several years. Capitalization rates in many sectors will begin to increase, which may adversely affect real estate values. We have seen increases in idle capacity for machinery and equipment in the manufacturing sector and we continue to monitor the number of railcars in storage, due to a reduced demand for sand, coal and other goods.

Of course, the flipside could be true as well. The Omicron variant may peek very soon and subside as quickly as it ascended. If workers stay diligent and vaccinations increase, the economy will benefit and manufacturing, retail and other markets will see a significant benefit. The one constant? Taxes. And in my case, property taxes.

Owners will continue to be resourceful in ways to minimize operating expenses and an annual review of their property tax valuations is (and should be) a part of the annual business game plan.

As always, we are here to help. If you would like to address your property tax needs, please reach out to me directly at or . Both companies are here to help and we look forward to another year together!

The Swartz Report: Year End Review and Happy Holidays!

December 20, 2021/in General Information/by Swartz + Associates

As we conclude 2021, I’m amazed at how quickly the year passed by. It was just yesterday we were contemplating what 2021 would look like from a virtual perspective. Could we really continue to operate in 2021 like we had in 2020? What changes would be necessary in the work environment? How would our relationships with our clients and the county/state jurisdictions survive? How would owners of private railcars continue to survive and thrive and what will be the state of commercial real estate, particularly in the hospitality and entertainment venues?

After months of no travel, I began attending conferences, client meetings and visits to Las Vegas office in June. Previously, blogs suggested traveling was… different. I contend this continues to be the “new normal” and with variants of COVID continuing to rear their ugly heads, I anticipate more of the “new normal” throughout much of 2022.

So, what does this mean in the world of property taxes?

Good question, and we’re definitely looking for clues to guide us. The Federal Reserve recently announced plans to potentially increase interest rates three times in 2022. How will this affect the ability to borrow money or finance commercial/industrial real estate? Will money market rates increase to a level so investors may consider this option over speculative real estate? I don’t believe so, but there could be a slight “cooling off” of real estate transactions heading our way.

Closer to home, Missouri completed the bi-annual reassessment of real estate values. Particularly, the greater Northland area of Kansas City saw tremendous increases in property valuations. Owners of property located in Clay County witnessed valuation increases between 20%-150%. Many appealed the increased values to the local Board of Equalization, but many more didn’t meet the deadline in June to appeal their valuations and were in for quite a surprise when they received their tax bills in late November.

Please remember, taxpayers will have the right to again appeal their valuations in 2022 and at least have the opportunity to achieve a fair assessment for the 2022 tax year before undergoing the re-assessment cycle in 2023. The same theory holds true in the States of Iowa and Colorado. Please contact me if you have any questions concerning these states and what rights you have as owners of property.

Looking Ahead

While certain sectors are thriving (industrial/commercial warehousing; multi-family and residential), other properties continue to suffer and will to seek ways to create value. High-end hospitality, office space and segments of the commercial retail space are not coming back to the pre-pandemic levels and it will be interesting to see if they’re permanently affected.

Restaurants, theatres and live entertainment venues are re-imagining what necessary steps must be taken to drive individuals to their businesses. All of these factors must be considered when looking at valuations for property taxes. The majority of the states must value property at its true market value on a “fee simple” basis. While jurisdictions love to look at contract rent (or the “leased-fee” aspect), fee simple valuations require these jurisdictions to review the market rents, not encumbered by lengthy, long-term leases.

On the rail car side, owners are excited to see goods on the move.

We filed a significant number of railcars this year with an “idle capacity” or “placed in storage” as many cars were not in service at the valuation date of January 1, 2021. We expect the numbers of cars in service to be much greater as of January 2022 and will be gathering the data over the next 30-60 days.

All in all, a very busy and challenging year. As I embark on my 37^th season in the industry (Really???) I’m just as passionate about our clients and their needs as I’ve been in the past. Hop on, it’s going to be an interesting ride over the next 3-5 years.

Happy holidays to everyone and here’s to ringing in a great 2022!

The Swartz Report: So Many Things to be Thankful For in 2021

November 26, 2021/in General Information/by Swartz + Associates

As we enjoy the Thanksgiving break, I wanted to take this opportunity to again identify the things I am thankful for and appreciate the support we have received this past year.

My Father

First and foremost – Happy birthday to my father, who turned 90 years young last week. We were able to celebrate the event with him and the senior community; a little party, a great dinner and as a bonus, attending an exciting college basketball game. Extremely thankful for my parents and the guidance they’ve provided in helping me become the parent/person I am today.

Our Clients

I am continually thankful for the relationships we’ve developed with our clients and the trust they have shown in allowing both companies (Swartz and Indurante) to successfully represent their property tax matters. Since purchasing my company back from CBIZ/MHM in 2014, as well as acquiring Indurante & Associates in 2018, we continue to represent our clients in a positive and professional manner – the comments received from our client base reinforce the acquisition decisions.

Our Team

I remain thankful for my staff, who continues to push forward by reviewing ideas and concepts to support our clients. As certain sectors of the real estate market are being re-imagined; use of railcars and machinery and equipment go through the ebbs and flows of use and capacity, we do our best to stay on top of things by following the market trends. These ideas are often presented to the various governmental jurisdictions we work with and I believe our clients know we are constantly representing their best interests.

My Family

Finally, I am most thankful for my family. As my kids (although grown adults ????) and wife continue to excel in their endeavors, be it work, college or graduate school, they continually make me young at heart and are supportive of my work and goals. As longtime readers of my blogs know, I have had a few challenges over the past years, but feel I’m as strong as I have been in several years.

Looking forward to the challenges that lie ahead and I’m excited to continue the journey, putting our clients’ needs first!

As always, please do not hesitate to reach out to me at or with any questions.

The Swartz Report: The National Business Aviation Association conference was fascinating.

October 21, 2021/in General Information/by Swartz + Associates

Last month, I discussed the CinemaCon convention I attended in August and thought it would be interesting to compare this conference to the NBAA – BACE at the Las Vegas Convention Center I attended last week.

The differences were striking.

The NBAA (National Business Aviation Association) is the leading organization for companies relying on aircraft to make their businesses more profitable. I was invited as a guest of SkyMark Refuelers (a big thank you to Mike Ellis for allowing me the opportunity to attend.) I knew this would be an excellent opportunity to meet business owners as well as suppliers, fixed based operators and others to discuss the aspect of business personal property taxes levied against various types of equipment. These types of equipment include refueling trucks, maintenance equipment, private jets and the leasehold improvements situated on airport property.

The event was fascinating.

Exhibitors from all across the globe gathered to show their wares in extremely elegant and sophisticated tradeshow booths. While smaller than past years, this was the largest convention gathering post pandemic Las Vegas has hosted with over 18,000 registered attendees. This is roughly 4-5X the number of attendees at CinemaCon and held in the recently completed West side of the Las Vegas Convention Center (as well as aircrafts located at the Henderson Airport).

The feel of the event was completely different. You had to be fully vaccinated to attend and pick up your credentials for entering. This was streamlined by installing the Clear App on your mobile device; downloading a picture of the front and back of proof of full vaccination card; downloading a picture ID of yourself and showing the application at the Registration Area to collect your credentials. After receiving credentials, masks were not required within the Conference Center. It was as close to “normal” as I’ve felt as part of an indoor setting with so many people. Kudos to the event planners for making this happen so efficiently.

While many conventions highlight the social aspects of getting away, make no mistake, these attendees were here to meet up with clients, learn about the latest technologies and most importantly – conduct business!

The tradeshow booths.

Many tradeshow booths were set up for staging areas for the “chit-chat”, while stairs led to 2^nd story conference rooms (within the respective vendor’s booth) for privacy and real work. Additionally, there was a section of floor space dedicated to first time presenters. I spent time meeting with the “first timers” to determine what was the deciding factor to exhibit. Several indicated to me they would recoup their investment as much as 20-30 fold within the next year. I believe anyone would consider that a successful return on investment!

As a summary to these two recently attended conventions, I’m continually reminded of the importance of marketing – Marketing of your company; your brand; yourself! You can never underestimate the power of marketing. It’s completely exhausting, exhilarating and essential for brand awareness, as well as keeping your name out there. I was surprised by the number of different types of companies attending the conference – now it is up to me to see what happens next.

Happy Trick or Treating!

As always, please respond with any thoughts or comments as they are always read and appreciated.

The Swartz Report: It’s been a busy appeal season! Time to start planning for 2022.

September 20, 2021/in General Information/by Swartz + Associates

If you are a regular reader of my blog (and THANK YOU if you are ????) you may recall I was getting ready to attend my first in-person conference since the start of the Pandemic. I attended the Cinemacon conference in Las Vegas as we have several clients in this arena. I felt it was important to be there, showing my support for not only my clients but also the industry.

Cinemacon in Las Vegas

I’ve heard many reports of conference attendance being approximately 40% of previous years’ conferences. I believe this was true for Cinemacon as well. Seeing the interaction amongst the attendees; listening to leaders in the industry discuss the future of movies; looking at the latest in technology to enhance the experience and walking through the trade show area brought back a sense of normalcy that had been missing.

Granted, you must have been fully vaccinated to pick up your credentials and you had to wear a mask throughout the day as long as you were indoors at the conference. One advantage of a smaller turnout was the ability to freely move from exhibit to exhibit on the tradeshow floor. I found this aspect to be quite pleasant and refreshing as you weren’t fighting through crowds to get from one booth to another. And the opportunities to engage with other people were abundant.

People were genuinely interested in connecting, especially those who hadn’t been able to meet personally over the past 15+ months. Clearly, this industry has been severely affected by the Coronavirus, yet most were discussing ideas and plans to move past this and had both eyes set on the future.

I will be attending another conference in Las Vegas next month and will be interested to compare the two. This upcoming conference has members who have definitely thrived during the pandemic and I would like to contrast and compare the industries and the attendees to determine if there is a difference in the pace and feel of the conference compared to my experience in August.

As the day gets shorter, it can only mean one thing – Planning Meetings for 2022

It’s hard to believe we’ve almost completed the 3^rd quarter of 2021. As someone mentioned to me the other day, the days are long but the weeks are short. HOW TRUE… This has been a very busy appeal season. I’ve scheduled our planning meetings for both Swartz and Indurante in the coming weeks.

How did we do this year? What could we have done better, more efficient, more transparent? Have we effectively communicated with our clients? Are we keeping pace on the technology front? And finally, what does 2022 have in store for us and our clients?

I feel very good about our products and services for both companies, but we can always be better. As we move forward to 2022, our opportunities to expand and take care of our clients will continue to be at the forefront.

As a service provider, I want to make sure we are putting the needs of our clients first. If we’re successful in doing this, the rest will take care of itself. These planning days are good for the group as it’s our chance to examine our processes and focus on implementing strategies that have previously been discussed. I always look forward to these meetings and look back at notes from the previous year to determine what has worked and what continues to need improvement.

Thank you very much for your thoughts and feedback – Again, you may always reach me at the following:
or .

The Swartz Report: The power of relationships and golf.

August 22, 2021/in General Information/by Swartz + Associates

There’s a saying that you can conduct quite a bit of business on the golf course. I’ve always felt there’s quite a bit of truth to this as you spend approximately four hours on the course (give or take 30 minutes ????) with one, two or three additional people. While you’re focused on your game, the actual execution of the shot and your score is a rather miniscule time frame compared to the amount of time you spend with the people in your group on the course.

What do you do with all that time?

Certainly, there is discussion about family, vacations, TV shows, possibly religion and politics but inevitably, work can be a driving force.

Now, multiply this by 3X and you have our club’s annual Member Guest Golf Event. For the past two years, I’ve invited the CFO of a long-time client. Mike enjoys knocking the ball around the course as much as I do, and this provides a great opportunity to keep the working relationship strong. More importantly, Mike has become a good friend. Three days for golf, socializing, consuming beverages of all varieties, tremendous eating and maybe a LITTLE wagering… truly another great weekend. While we were technically away from the office, it was hardly wasted time.

The opportunity to meet others during the event is also present. There is no shortage of ways to meet those in the business world, even if takes place in a social, golfing environment. I recently completed a 10-week course through the Kellogg School at Northwestern in Mastering Sales and one should never discount these functions as purely social. As an owner of a business, I am constantly in “sales mode”, even if I don’t realize it at the time. The way you interact with others; the way you carry yourself and your conduct on and off the course is noticed not only by your group but also by others. In fact, a business opportunity may have presented itself with a person I met after we concluded a match. My follow up early next week will definitely be a plan of action and who knows how this may develop.

Speaking of marketing, this week I’m attending my first in-person conference since the Pandemic began.

While a little nervous, I am fully vaccinated and conference attendees must show proof of full vaccination in order to be allowed into the various breakout sessions. I’m excited about the opportunities but definitely cognizant of the surroundings. I am completely comfortable wearing a mask in this setting and curious to see how interactions will occur as well as the number of attendees at the conference. (Sounds like a good story for the September blog!)

As always, I appreciate you taking a few minutes out of your day to read my blog. If you have any comments or suggestions, I would love your feedback by posting a response or emailing me directly – or .

Enjoy the balance of your summer and a great upcoming Labor Day weekend!

The Swartz Report: Another road trip? We thought we were finished!

July 19, 2021/in General Information/by Swartz + Associates

Happy Summer everyone. I hope the season is treating you well and you are taking advantage of this time to travel, vacation and/or relax. For those of you who regularly follow my writing, you may recall the road trips with my daughter as she would get ready to attend another year of college. After graduation, one would have thought those opportunities would be gone… No more World’s Largest Golf Tee or Wind Chime; various universities in our path back East; the Flight 93 memorial, the total eclipse. Great times and great memories.

Just when you thought it was over, grad school, here we come!

And even crazier, how about both kids attending the same school? I would have never imagined my two children (let alone, one) attending Syracuse University, but low and behold, my son will be a senior this fall and my daughter commenced the one year graduate program July 6^th. So, luckily for me (and you ????) another road trip was tackled.

Lunch in Hannibal, MO; a visit to the Lincoln Museum in Springfield, IL and dinner with a few college buddies rounded out Day 1. Notre Dame and lunch with a friend (living in South Bend) of Miriam’s from her Lafayette College days highlighted Day 2, although dinner in Erie, PA was surprisingly excellent and our accommodations in Buffalo were outstanding.

A heartfelt thank you to my client, Shaner Hotel Group for providing a room downtown, while the Toronto Blue Jays were playing in their “home” stadium. (Learn more about Shaner Hotel Group at www.shanercorp.com.)

The trip was fast and easy other than a few thunderstorms we seemed to continually catch and drive through! Of particular interest was the number of wind farms and turbines we were exposed to as well as the number of client’s properties we passed along the way. I’m half tempted to write off the mileage. If only I would’ve stopped in on the multiple locations for “site visits” – maybe next time.

Again, it takes trips like these to realize and appreciate the vast and varied portfolio of properties we represent. Seeing their signs and locations continually humbles me and I’m so appreciative of their support and confidence in trusting us for the property tax needs.

Notre Dame on the left, Wind Farm on the right

Finally, a quick thank you for those who reached out on the two year “anniversary” of my accident. Things are going well and the day practically passed without me thinking about the date. Hopefully next year, and the years following, July 9 will be just another day.

We will keep representing the interests of taxpayers to ensure they’re paying their fair share.

If you have any comments or suggestions, please share by responding to the blog. You may also reach me directly at .

The Swartz Report: The Pandemic and Property Tax Values

June 23, 2021/in General Information/by Swartz + Associates

As we start our hearings for the 2021 tax year, a question constantly arises from both taxpayers and county appraisers…

How has the pandemic affected the value of business personal property and real estate?

The answer is both simple and complicated. If business has suffered (think hotels, movie theatres and restaurants, to name just a few) due to the pandemic, is it the business value that has diminished or does it also include a decreased value in the business equipment as well as the “sticks and bricks”? County offices are constantly asking taxpayers to show market sales to support the claim the pandemic has had a detrimental effect on real estate. Business owners aren’t willing to sell their assets during this time, arguing the market is too depressed. If a sale does occur, is it truly a market value transaction? In other words, exposed to the market with neither party under duress to buy or sell?

In the cases we’ve had before the local Boards, another question invariably is asked…

Did the taxpayer receive PPP money?

I’m not sure how that relates to the value of real estate or business personal property. This money is primarily intended to support the payroll of a company, again, focusing on the business side of the equation and not the tangible asset side. However, the respective Boards believe if PPP money has been received, the businesses are surviving and therefore, the value of the equipment and the real estate remains unchanged.

I see the purpose of the argument. However, many types of commercial real estate (and the associated business personal property) are directly tied to the income it can produce. Investors look at types of real estate for the income potential. Office buildings, hotels, theaters, malls, multi-family… These are all in existence because of the rents they can collect from their tenants. If the tenants fail to make rent or worse, close due to a lack of business, the real estate becomes less valuable to an investor. Granted, the investor is not looking at a snapshot in time when purchasing real estate (the investor should be looking at stabilized income over the life of the property) but the role of the assessor’s office is to value the property as it sits on a specific valuation date. In most jurisdictions, this is January 1^st. As a result, we’re forced to look at the property at this “snapshot in time” and as of January 1, 2021, various sectors of the market were disproportionately disturbed.

Many counties have been proactive in their valuations.

Some have offered 20-30% reductions in value before the appeal process. However, this is not widespread, and those counties not proactively offering relief to the taxpayer can expect to see a surge in the number of appeals. Boards and State Courts or Commissions are already back logged due to the closure of the courts during the pandemic these past 15 months. Add the potential of new cases as a result of the pandemic; we may not have resolution for 2021 appeals in some jurisdictions until late 2022 or early 2023. The effects are long lasting and challenging for all sides.

We will keep representing the interests of taxpayers to ensure they’re paying their fair share.

If you have any comments or suggestions, please share by responding to the blog. You may also reach me directly at .