The Swartz Report: 2015 Highlights and Looking Ahead to 2016

Don SwartzPost written by Donald Swartz, President and Principal at Swartz + Associates, Inc. | Lover of Chiefs, Royals and golf | Avid “Cruiser” | Poker Enthusiast

2015, where did you go?

It’s hard to believe we’re turning the page on another fun and fast paced year, so I thought I would review some of our highlights as well as mention upcoming issues facing the taxpayers in the property tax world.

The Highlights

  • Swartz + Associates, Inc. (SAI) completes its first full year of operations and things continue to go well. Our portfolio diversity and ability to work across the country pays dividends. We were able to successfully negotiate multi-year settlements for our clients with properties from California, Pennsylvania, Illinois and Texas and success in Canada based upon a strategic partner relationship.
  • Gary Stone, Senior Analysis for SAI, achieved the designation of Accredited Senior Appraiser in the area of Machinery and Technical Specialties. This is quite an accomplishment that has been literally years in the making. Congratulations to Gary for staying with this goal and adding value to our practice. I believe SAI is the only firm in the greater Kansas City area with two designated ASA appraisers in the field of Machinery and Technical Specialties.
  • Terry Hainje, a career real estate professional in the Kansas City market joined the staff of SAI in June. Terry’s 35+ years of real estate experience in appraisal, brokerage, valuation and property management are a welcome addition to our veteran staff.
  • SAI currently has two properties represented at the State Supreme Court level (IA and WV); one awaiting decision from the Court and the other set to be heard before the Court in early 2016. Decisions in both cases will have a significant impact in the valuation of what one side argues as “special use” property and what the other side argues is not “special use”.
  • SAI continues to have success representing specialty properties such as theaters, big box retail, hospitality and mining – showing our expertise in a many niche areas.

Upcoming Issues in 2016

  • With the anticipated announcement of increased interest rates, will there be any slowdown in the acquisition of commercial/industrial real estate market by institutional and local investors? Capitalization rates on income producing properties have been extremely low, creating higher values from coast to coast.  Have we reached the stage of “irrational exuberance” similar to 2005 – 2007?  Will this impact property tax values for 2016 and 2017 as property tax values tend to lag the marketplace by 6-12 months?
  • How will Sale-Leaseback transactions affect the property tax world? Several jurisdictions have property tax cases pending at the State Court level in an effort to determine if sale-leaseback transactions are true market value transactions or strictly financing mechanisms not reflective of market values.
  • How will alternative fuel sources affect the property tax values of the more traditional resources of oil, gas and coal? Stock prices for the traditional energy companies have seen downward pressure in 2015. Will this have any bearing or relevance to property tax valuations going forward?

And of course the BIGGEST issues of 2016 will be…

  1. Can the Iowa Hawkeyes start off the New Year with their first Rose Bowl victory in 55+ years?
  2. Can the Chiefs win their first playoff game in 23 years? (this assumes of course we make the playoffs)
  3. Can the Royals make it back-to-back-to-back World Series appearances? (I can’t believe the Royals have even given us the opportunity to utter such nonsense!)
  4. Can I continue to work my way thru the Blogosphere and maybe even work on …….Tweeting? Whoa – one social medium per year, please!

Thank you to all who have supported us and who have pushed me to become a better employer, a better advocate and a better person.

Happy Holidays and a Happy New Year to all!

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