Assetsoft - Blog #USA

Texas Retirement Systems $100m Commitment with Real Estate - What to Expect

Sun, 09 May 2021 15:31:53 -0500

COVID-19 has claimed hundreds of thousands of lives and changed how we work.

Thankfully, monetary stimuli like the Biden administration’s $1.9 Trillion stimulus plan has kept the U.S. economy relatively healthy.

Real estate has continued to fare well across U.S. and Canada. The demand for housing has grown considerably even during the pandemic. Commercial real estate—one of the most significant victims—showed promising signs near the end of last year.

Now, the TMRS (Texas Municipal Retirement System) allocated $200 million in real estate funding in recent months.

These funds are split into two, which we'll go through in a bit. Each fund received $100 million, and they promise relief for the municipal real estate sector.

The first fund: Transwestern Strategic Partners Fund III

Managed by Transwestern, it's a value-added fund. The partner organization is among TMRS' managers. The fundraiser launched in January, yet it seems like it didn't reach its $450 million purpose.

However, TMRS secured six investors, adding up to $259 million. This capital will provide relief for assets related to multifamily, healthcare, and industrial sectors. It’ll also aid some medical office and retail properties.

The second fund: Platform Ventures Real Estate Strategies V

On the other hand, Platform Investments owns this fund, and it’s a recent TMRS manager. Unlike its counterpart, it targets opportunistic real estate assets. It opened somewhat earlier, in October 2019, and it raised $14 million in its first year.

It might sound like a lot, but it’s far from its $300 target. Nevertheless, COVID-19 took over most of the fundraising period, making the goal harder to reach.

Government's interest in real estate

Governments have always prioritized real estate for its role in developing cities and contributing to virtually all markets. That’s why we have so many government grants.

Essentially, helping the real estate sector yields superior returns for governments. In exchange, startups and established companies can offset many hurdles, like the recent pandemic.

Multiple funds available

Only in the US, that linked article lists 19 real estate funds. They come from government and private entities alike. However, each fund has its eligibility criteria and available capital per company.

Outsourcing city projects

Why are there so many public funds? That’s because real estate is critical for any city’s development. It provides the space necessary for industries, offices, retail businesses, and housing.

Governments can outsource city development to real estate firms. These funds allow said firms to perform more effectively because they can invest in resources, technologies, and logistics.

Governments’ role in the sector

For some experts, the government is among the most influential factors determining a property's value. Whether it's more important than social factors, location, or other aspects, we can't deny the influence.

Additionally, a government’s role in the industry goes beyond public funding for development and management companies.

Financial intervention

Firstly, government intervention is considered crucial for the economy in many cases. The extent of this intervention changes whether it’s good or not. One of the best examples is the Fed bailing out banks during the 2008 crisis.

Is today’s funding similar? In some ways, yes: the government is intervening in the market to aid one industry. That’s the first half of how the government is abiding by its responsibilities.

Infrastructure development

Infrastructure is among the governments' primary responsibilities, with the most common instance being roads. According to experts, these "free goods" that everyone can use can only be provided by the government.

For-profit companies are unlikely to spend resources building a road that won’t generate profits. However, governments can pay construction companies for these developments, benefiting all parties involved.

When intervention gets out of hand

When government intervention aims to control the market, distortions begin to appear. Overinflation and other phenomena become more prevalent, and asset values tend to plummet.

For instance, you can check the prices per square meter for buying apartments in the US compared with other American countries. For reference, the average price per square meter in Caracas—the Venezuelan capital—is around 10% of the median US price.

Is this the current case?

So far, the stimulus provided by the TMRS is solely an example of financial incentives. There's little reason to worry about market distortion. That said, it raises unique concerns about competition and how you can take advantage of the fund.

As such, let’s go through what property managers should expect and how they can prepare.

What can real estate companies expect from these moves?

We can simplify this movement by injecting capital into the real estate sector. Increasing liquidity leads to more investment power for the companies receiving it. That means better investment opportunities for companies in the region.

How does that translate? We can foresee three significant benefits and requirements (simultaneously) for real estate companies.

More flexibility

On the one hand, companies gain financial power. That means better reach into more markets, technologies, and project development.

However, it means companies need a proper methodology to accommodate this liquidity influx. Taking advantage of these benefits still requires effort.

Proper forecasting

Secondly, companies will build better forecast structures and implement the necessary technology to improve their accuracy. AI forecasting is a great example.

Nevertheless, accuracy improvements might become necessary, as companies require better assessments of how the market evolves.

Strategy development

Finally, building a robust investment strategy to leverage these funds will likely prove invaluable.

It could be pretty challenging, though. Average liquidity will increase as companies receive funding. You'll need effective strategy and leadership to overcome stronger competitors.

Finally, we can’t overlook the need for proper technology implementation for real estate companies. As trends like remote work become standard, leveraging cloud ERP solutions can make a significant difference.

How can Assetsoft Help?

Assetsoft have worked with several enterprises, helping manage the medical, dental and hospitality funds. We have helped our clients invest into hotels and build their portfolio, while we took care of the investment accounting.

Talk to us for Yardi consulting or MRI integration, and let us take care of the back-end work. We will help you calculate the distribution amount while avoiding accounting inaccuracies and errors. Our accounting experts are well versed with all popular and complicated accounting methods, from capital call fund accounting to Waterfall calculation.

Some calculations like bridge loans may bring up inaccurate results when done automatically. For these, our team members do it all manually, to ensure accuracy and avoid errors.

Want to use the right technology to do more? Assetsoft offers professional technology selection services to assess the best investments for your company. Know how we can help you choose the right ERP, or help you with everything from back office accounting to robotic process automation.

The Top Industrial Demand Drivers We Need To Look Out For A Post-Pandemic Recovery

Mon, 15 Mar 2021 14:38:08 -0500

As COVID-19 develops, the real estate sector hasn’t stopped surprising investors. Known developments include residential markets booming, commercial properties shifting their focus, and more.

As the vaccine starts to become more readily available, multiple experts have started to analyze the consequences. Several flourishing markets include previously-negligible demand drivers. Shortly, many of them could become vital for recovery.

Staying on top of these changes can make a prominent difference for property managers this year. Which demand drivers should you keep in mind?

Office space in the post-pandemic

As expected, office space is still struggling with maintaining demand. As the pandemic developed, home offices became the norm. It's easy to see why social distancing and crowded offices don't get along too well.

That means office space has stagnated in demand, even with upcoming vaccination. However, we might see a significant bounce since not everyone works better from home. The same holds for training and onboarding workers, which traditionally requires physical proximity.

Possible 15% slump for office demand in the US

However, it seems like it’ll still take a while before office space can become relevant again. As Globes reported, two noticeable trends are responsible for the office sector’s slump. According to them, these trends are social distancing and remote work policies.

Luckily, the article does mention that office space is unlikely to disappear. It’s easy to believe that no one wants to return to their offices. However, the article mentions that 10% of workers might prefer to relocate permanently to their homes.

While that's a notable increase, it's far from representing the majority. While demand won't recover completely, office space won't cease to be profitable.

Which markets promise an upcoming boom?

On the other hand, there’s no shortage of articles going through promising markets in 2021. Many of the mentioned markets are easy to expect. The housing market has seen prominent winners, particularly in more isolated areas.

However, vaccination and recent developments have brought new potential players into the picture. Lower demand decreases the prices in larger cities, making them more attractive. People adopted new needs, like open spaces and support for all the software they've implemented.

Suburbs and smaller towns

Some of the most demanded housing markets were outside more prominent cities. People often avoided these properties because they were away from job opportunities. That's why small apartments in the capital were often more expensive than large houses in the outskirts.

Remote work drove thousands of workers to their homes. Remote work eliminated the need for staying in large cities since commutes weren’t an issue most of the time. This trend could slow down as prices adjust to the increased demand, yet it’s unlikely to stop soon.

Cities could make a comeback

The benefits for the suburbs were detrimental for capitals and large cities. Since their main attraction was being close to job chances, social distancing and work-from-home policies negated virtually all advantages they offered. That’s why

However, the same decrease in demand has driven prices down in some of the larger cities. What does this mean? These cities are in a similar spot as suburbs when the pandemic started. As their outskirt counterparts increase in costs, cities will become more attractive, especially with people returning to their office.

Storage and logistics

Regardless of how the epidemic impacted the world, one thing remained true: people still needed food and inventories. That’s why warehouses and similar properties barely experienced any setbacks during the pandemic.

As various industries start to recover, storage and logistics will remain vital for keeping inventories and enabling supply chains. Additionally, online commerce reduces demand for retail space, but they'll also need somewhere to keep their physical products. With their continuous growth, storage might become more important than retail fronts in the future.

Data centers

The pandemic, remote work, and the need for online collaboration took countless companies to make technology implementation a priority. Today, virtually all digital apps are cloud software. That means they depend on top-quality servers around the world.

These locations are data centers. For those who don't know, they require warehouses and similar facilities to keep the servers. It offers plenty of investment opportunities, like repurposing unused office spaces. As technology becomes more critical, this demand will only increase.

Open space amenities

Finally, open spaces have become the main priority for anyone investing in real estate. Ventilation and room for social distancing are critical for maintaining healthcare measures. As people get used to these amenities, they'll likely gravitate toward them when investing in properties.

In other words, open malls and offices—as well as properties near parks—will enjoy greater demand. Additionally, renovating existing assets to accommodate these needs is also a great option.

What does this mean for the real estate sector?

2021 is a sea of opportunities for anyone who can spot these changes. As several experts have pointed out, the difference will lay in embracing innovation and versatility. Property managers and investors will need to focus on how the industry evolves and adapt accordingly.

That linked article from Colliers focuses on the Singapore market, showing that these expectations are valid for different regions. The article goes through different viewpoints from two real estate experts.

Let’s see what we have to say.

Looking toward leasehold properties

One of the first observations from the article is how most prime areas are currently leaseholds from the government. The state handles planning and reclamation for Singapore's business district.

Interestingly, returns and yields from these properties could be more attractive than their freehold counterparts. Upfront costs are lower, and the same goes for upside rent. For instance, the article mentions 3% yields on leaseholds against freeholds' 2%.

Promising outlook for healthcare real estate

The article also mentions the growing demand for real estate on the healthcare front. They mention a combination of the hospitality and healthcare sectors. It makes sense, considering recent repurposing projects within hotels.

We’ve also seen plenty of upcoming developments centered around healthcare. It makes sense, given the huge demand, even during recovery. Vaccination is also a strong reason to focus on healthcare real estate, and it’s a worthy consideration for future investments.

Hospitality recovering slow but steady

We already mentioned this sector, so let's focus on it now. Most experts agree that hospitality has been among the most prominent victims of the pandemic. However, they also agree that the tourism industry will never die.

On the contrary, the pandemic has done little but increase people’s desire to travel. You can ask your friends, and at least one will tell you they’re just waiting until they can travel. With the vaccine, people will likely flock toward airports and travel agencies.

So, where’s the demand coming from?

We've already discussed how various sectors will benefit from increased demand during this year. We haven't mentioned exactly what's driving this demand—at least not specifically.

As you might have inferred, the pandemic nurtured most demand drivers responsible for the upcoming surge. All the following causes come from the pandemic and, more prominently, healthcare measures.

1. Remote work

We've mentioned it extensively by now, so let's begin with the most apparent demand driver. Remote work has bred countless shifts in as many markets. It's responsible for the current housing sector balance and the downfall of office space.

Remote work will continue to drive demand to and from multiple sectors. Office space and major cities are likely to keep their current trends for a while. Suburbs, coworking spaces, and even good internet access will be crucial considerations when investing.

2. Pent-up travelling demand

There’s not a lot to say here since we just talked about it, but frustrations over traveling restrictions will drive the rebound for tourism and hospitality real estate.

From our main demand drivers, traveling demand might be the weakest one for the short-term. As vaccination becomes more commonplace and traveling regulation subsides, it could be a significant market driver.

3. Innovative ventures

Innovation will continue to drive the market as COVID-19 recedes and people get used to the "new normal." We're talking about repurposing existing spaces to accommodate recent trends, like coworking and the importance of cloud software.

Companies who understand what will become standard after the pandemic can invest accordingly for their competitors' significant advantage.

4. Digital adoption

The pandemic also turned dozens of companies toward digital adoption. The need for more advanced software and features could be a surprising driver behind industrial demand.

For instance, we already mentioned that good internet access is vital for property investment. Proximity to data centers and similar characteristics can make specific properties significantly more attractive than traditional assets.

5. Returning to “normal”

Finally, demand has been unstable or "outside of the norm" during COVID-19. We already see the first signs that the crisis is about to finish. As people go back to normal, demand will do the same—as far as possible.

Things will not be 100% like they were before, but we can expect a stabilization process. That means reaching a middle ground between pre-pandemic and pandemic economic environments.

Virginias March Legislation Changes: What It Means and How To Adapt

Mon, 08 Mar 2021 09:19:43 -0500

Since COVID-19 began, tracking legislation updates has been a hardship for everyone. Depending on your location, you might feel like laws change every other day. For some, that's unfortunately true.

The recent legislation changes in Virginia, beginning on the 1st of March, is an excellent example. Yardi’s ScreeningWorks PRO already informed all its customers, but many still feel lost regarding the law’s implications.

What does it mean? Why does it matter? More importantly, what can you do? That’s our topic for today.

What does this law entail?

The law relates directly to the landlord-tenant relationship. In essence, it's a way to guarantee that applicants rejected by landlords don't feel lost afterwards. That's because it's challenging to know what steps they can take after rejection.

To simplify things, this notice demands landlords to provide additional information to applicants after denying housing. This information primarily goes through their rights and what they can do.

The law applies to all applicants screened and denied housing on the 1st of March and later.

The implications for landlords: What do you have to consider now?

This law was a surprise for most companies and managers because of how sudden it was. Therefore, there's still a lack of information about the notice and what landlords need to start doing.

As a summary, you need to notify rejected applicants about their rights via the Virginia notice. This information is available for Yardi users right now. Additionally, you can set up your preferred communication channel so that it sends the required documentation to your denied applicants.

How can you curb these new challenges?

Now, the main obstacle isn’t to procure the information you need to convey to your applicants. It’s readily available for any users of Yardi’s ScreeningWorks PRO. It’s also easy to find with simple legal advice.

The genuine hurdle is finding the means to communicate everything to your applicants with little effort. It might not sound too challenging, but when you're managing several properties with a dozen applications per space, everything adds up.

Luckily, the real estate sector enjoys plenty of options to improve the relationships between landlords and tenants.

Streamlining communications

The first step to comply with these requirements is to make your communications as straightforward as possible. You don't want to spend too much effort and resources to abide by these new requirements.

That’s mainly because you don’t have to. For instance, most of our software services include comprehensive solutions to communicate with your tenants and teams. If you're implementing real estate apps, it's likely you already have the necessary features.

Modern ERP software

Additionally, modern ERP solutions have all the features you need to manage your properties from a single dashboard. That includes tracking maintenance and statuses, but communications are often overlooked features in these apps.

For instance, ScreeningWorks PRO lets you generate and download adverse action letters. You can email these in seconds to all your rejected applicants. Yardi also made a PDF of the Virginia law downloadable to attach to your email and send it immediately.

Tenant portals

Tenant portals, usually available via the most sophisticated property management platforms, are also remarkable for this task. You can screen and interview all your applicants via these systems, and that includes sending important notifications.

For instance, you can sort out your best applicants and segment those you want to reject. Their contact information can go into an email list, to which you can forward all the legally required documentation requested by the new Virginia law.

Implementing CRM Apps

Customer relationship management is becoming increasingly important in all industries, and real estate isn't an exception. You need to keep tabs on all your current and potential customers, and these apps let you manage your email lists and automate communications extensively.

Some of the most advanced CRM solutions, like Zoho and Salesforce, let you take care of all messages and notifications from a single dashboard. You only need your applicant’s email, and the system does the rest. As long as you set up the right message, there’s nothing else to do.

Do you need to change ERP software? Keep this in mind

ERP systems are an excellent investment for any company looking to streamline its operations. However, they also require lots of care to ensure you're investing in the right things.

ERP software is an extensive catalog. Every system has various intricacies and features that fit diverse requirements and preferences. A wrong choice in software can translate into monetary losses and operational disruptions.

We also have to consider other processes, like implementation, training, onboarding, and more. Luckily, our years of experience working with multiple software and clients has shown us the three vital considerations for successful integration.

Your real needs

The most crucial aspect to keep in mind is why you're getting an ERP system. They're excellent for streamlining communications and collaboration, but they're more than that. If you only want to send notifications, there are cheaper solutions,

It would be best to consider how much you want to do: your ERP software's features and capabilities. Even providers like Yardi have various products for different business sizes.

Cost-efficiency ratio

When choosing an ERP system, it’s common to look for “more bang for your buck” or as many features as you can for the best price. Everyone’s guilty of doing it, and that’s because it’s not necessarily a bad idea.

It's good to find as much value as possible, but if you're paying for more features than what you'll use, there's a problem. Cost-efficiency goes beyond value for money; we always help our clients focus on what they need and scaling later.

Hiring an effective service

Finally, you'll probably want to hire a software implementation service. Our experience has taught us that it's better to tailor our services depending on the client. That's why we recommend you look for personalized solutions.

Additionally, please consider hiring someone who offers implementation, training, onboarding, and support in a single package. That way, you can save considerably.

Tax Relief and Funding By Municipalities and Governments for the Commercial Real Estate Industry

Mon, 08 Mar 2021 09:00:00 -0500

You can edit text on your website by double clicking on a text box on your website. Alternatively, when you select a text box a settings menu will appear. your website by double clicking on a text box on your website. Alternatively, when you select a text box.The COVID-19 crisis has been so unique that governments are taking measures we haven't seen in decades. Throughout the world, tax relief and funding programs have been vital for ensuring different regions even survive the pandemic.

The worst long-term damage from coronavirus is the financial turmoil it's generated. How various governments ride this wave is vital to ensure businesses survive. That's why we'll go through the most critical tax relief and funding efforts across the globe.

The United States

The US has rolled multiple tax aids for citizens since the pandemic started. The IRS has been vital in ensuring people, businesses, and organizations can survive the crisis. In 2021, the second wave of Economic Impact Payments makes the latest help.

Individuals don't need to do anything as long as they're eligible. These payments are automated via direct deposits. The official website offers constant news about these measures. Businesses that suffered the most damage can also apply for these benefits.

IRS Measures

The IRS provides tax relief for multiple categories, covering most of the population. Individuals, families, businesses, and retirement and health plans are eligible for the tax relief programs.

Interest payment refunds, tax credits, and deadline exceptions are just part of the package. Even unemployment tax treatments have been vital pieces to help financial victims from the pandemic.

Biden’s $1.9 trillion relief bill

One of the most important recent news has been President Biden’s trillionaire relief plan for COVID-19. The budget splits into reducing coronavirus’ spread, family assistance, and emergency relief for businesses and communities.

Biden's administration measures include a $2,000 total in stimulus checks, expanding insurance for unemployment, and increasing child tax credit. Expectedly, this cash should increase purchasing power and aid the economy as families spend these amounts on businesses.

The United Kingdom

On the other hand, the UK has already updated their COVID-19 funding measures for the following two years. The UK's approach is somewhat different from the US because they focus on aiding local authorities instead of centralizing help.

While the government is optimistic about the virus dying out with incoming vaccination, not all problems will disappear immediately. This support package is estimated at around £3 billion for 2021.

The plan for 2021-2022

The plan goes through a £1.55 billion budget to guarantee aid against the pandemic's immediate and long-term consequences. It also reforms local tax support and income guarantees, distributing an additional £670 million fund.

They’re also continuing the guarantee schemes for local tax losses, with an estimated value of £800 million. Additionally, social care funding oscillates the £1 billion mark.

COVID-19 expenditures

The most compelling aspect is the £1.55 billion for coronavirus-related expenditure pressures. It goes through the Relative Needs Formula, the same method used during the last fourths of the 2020-2021 funding.

Past funding is an essential consideration for allocating this budget. The main focus will be local authorities facing more significant difficulties for the current period. That includes social care for adults and children, public health, and country re-opening.

Local tax measures

The local tax support focuses on enabling financially vulnerable households suffering from the pandemic. These supports include welfare systems. On the other hand, the tax income guarantee states that deficit repayments will spread throughout the three following years.

Additionally, irrecoverable local tax deficits will be part of the spending review. The government will be responsible for compensating 75% of these losses to local authorities. Scope loss measurements for councils and businesses will follow different approaches.

SFC extension

Finally, the government will likely continue the 2020-21 scheme for the start of the 2021-22 financial period. Its operation is confirmed for the first quarter of the upcoming financial year, from April to June.

The same principles from the previous year will remain during the extension, with a deductible rate and loss absorption for councils sitting at 5%. Eligibility for losses is also the same as the current scheme. The same documentation available today will remain relevant.

Business reliefs

Finally, this recent report from TaxAssist Accountants goes through significant business reliefs in the UK. Essentially, it goes through the extension for the relief plan from Budget 2020 into the current year.

Additional grant funding has also made the announcement, including funding for leisure, hospitality, and retail businesses. Other budgets have been allocated for businesses already receiving extraordinary relief.

Other grants include discretionary funds for local authorities, business rates and grants, hardship reliefs, and micro-business funds.

Australia

Australia has provided extensive documentation regarding its tax relief and funding attempts. What's worth noting is that the Australian government already provides financial assistance in the JobKeeper program and other support programs.

Despite that, every state and local government is free to provide additional assistance. This support divides into several categories, but do note that there’s no guarantee that all local governments will implement all or some of these measures.

Payroll tax relief

This type of relief includes threshold and waiver increases for payroll taxes, as well as interest-free deferrals. How it’s delivered will determine the repercussions of receiving this type of support.

For instance, businesses' allowable deductions will be lower if there's no payable tax for payrolls. Refunding payroll taxes offers businesses allowable deductions less the given refunds. However, GST consequences won't apply for relief coming from the state and territories.

Business support

Business support is a little more complicated. Some of the payments for supporting small businesses count as NANE income (non-assessable non-exempt) when filing taxes. These payments include funds, such as the Sole Trader Support, Alpine Business, Licensed Hospitality Venue, Business Support, Melbourne City Recovery, and Outdoor Eating and Entertainment package.

Criteria for NANE eligibility include the payment being from one of those programs or belonging to the 2020-21 financial period. Small business entities during the same financial year are also eligible.

Government payment assistance is assessable income, however. That includes single payments and installments. Businesses using accruals accounting methods, income is derived as the payment right comes. Cash accounting derives the income after receiving the payment.

GST for grant funding usually isn't necessary unless when the value is provided in return. That includes goods, services, binding legal obligations, or other requirements for receiving the payments.

Voucher subsidy schemes

These vouchers enable eligible people to buy from businesses damaged by the COVID-19 pandemic. They represent contributed amounts from the state toward purchases. These vouchers vary in where you can use them.

However, regular applications include consuming in restaurants, bars, clubs, and cafes. Accommodations and recreation are also applicable. Tax implications are the same as the previous scheme.

Electricity rebates

A less common approach to financial relief used by states is electricity rebates. Several states have automated this benefit for both households and even businesses.

These rebates don’t count as assessable income, but businesses need to consider the implications. Most importantly, these rebates reduce claimable deductions from electricity.

Land tax relief

Land tax relief is another relief effort used by some territories. The main focus is to offer more breathing room for businesses harmed by the coronavirus. Credits, rebates, deferrals, refunds, reductions, and waivers make up the various types offered.

It’s vital to note that landlords must provide rent relief for business tenants if they wish to be eligible. Taxation consequences of this measure depend on the delivery.

Rent relief

We already mentioned how to rent relief was a requirement for landlords' eligibility for land tax relief. However, other states have issued waivers and reductions directly.

Some states have also implemented both practices. This measure has focused on commercial tenants within properties owned by the government. Again, deliverability determines taxation repercussions.

The Australian Treasury’s relief and recovery fund

This document detailing the COVID-19 Relief and Recovery Fund is another excellent read. The fund consists of $1 billion to help communities and industry sectors offset the losses from the crisis.

The types of support will depend on what the population needs to improve recovery. They can include fee reliefs, increasing grant program payments, and targeting new programs toward specific needs.

New Zealand

Measures in New Zealand also focused on alleviating the financial downturn from COVID-19. Like other tax reliefs and funding attempts, the approach depends on business and people’s circumstances.

The following measures also complement a considerable amount of educational resources available about COVID-19 and its implications.

Use-of-money interest

This relief effort was one of the first measures implemented by the New Zealand government, as early as March 2020. Use-of-money interest refers to writing off late payment interest by Inland Revenue.

It was applicable for payments after February 14 of the same year. Eligibility requires people to inform the government that they’ve been affected by COVID-19 and rendered unable to meet payments.

Tax leverage

The measures also allow New Zealanders to estimate/re-estimate provisional taxes, with early refunds for overpayments. People unable to pay their taxes can request installment payments and write-offs depending on the situation.

Extension for filing dates on income tax is also a possibility. It depends on the situation, but remissions may be available as well. Certificates of exemption and tailored tax codes are also available for workers.

Special entitlements

Entitlements include re-estimating child support payments and tax credits for families depending on yearly incomes against expenses. That means adapting taxes and obligations to your income.

Finally, paid parental leave is another entitlement for certain people. Eligibility requires baby expectations or birth. Additionally, those becoming children's (under six) primary caretakers after April 2016 are also eligible.

Middle East

The Middle East is one of the most complicated regions regarding our current subject. However, we can go through the two most prominent measures for tax relief and funding.

Even with all the information available, evaluating these measures' repercussions on your company can be a challenge. That's why having access to professional financial services has become more of a need than an advantage.

The IMF measures

Since the pandemic started, the International Monetary Fund has been a critical player for the Middle East. It continuously urged governments to provide pertinent relief programs to the population.

The pledge aimed primarily toward preventing the pandemic's financial damage. The central thesis was that a temporary crisis shouldn't cause long-term repercussions, like unemployment and business bankruptcies.

Particular cases

This article offers more insight into the COVID-19 situation in the Middle East. However, even that article fails to provide a complete outlook of the measures. However, it's worth noting the regions mentioned have implemented financial relief.

Iran and Pakistan have requested emergency loans from the IMF.
COVID-19 hit Lebanon while it was still seeking foreign aid, thus strengthening this need.
Turkey has been one most outspoken about financial measures, slashing interest rates being the most prominent.
Egypt has also employed significant funding, interest rate cuts (3%), and postponing bank loans.
Tunisia had also announced health care and financial resources to reduce the financial impact and IMF loans.

Finally, the Morocco government has launched public cleanup operations and a $1.5 billion aid fund to support healthcare and devastated industries.

Canada

Finally, Canada has also been quite open with its COVID-19 relief measures. It divides its support measures depending on the recipient: people, businesses, sectors, and organizations.

The measures include employee rehiring, job creation, tax relief, employment insurance, and mortgage referrals. It's also aided self-employed people and indigenous entrepreneurship. Various industry sectors also experienced different measures according to their needs.

Trudeau’s recent tax relief

Despite the importance of the mentioned relief efforts, Prime Minister Trudeau's latest tax relief is less known. This relief aims toward coronavirus-related income support beneficiaries.

It means that these people won’t have to worry about overdue tax interests from benefit programs. The minimum period is a year, and self-employed people will also receive amnesty if they’d received benefits without qualification.

Around 40% of Canada's labor force has received payments from the country's Emergency Response Benefit. The tax interest waiver will last until the end of April 2022. Eligibility for the relief requires earning less than CAD 75,000.

The U.S. Returns to the Paris Agreement: What Does it Mean for Real Estate?

Sun, 07 Feb 2021 17:58:24 -0500

As you probably know, Biden recently announced that the U.S. would rejoin the Paris Climate Agreement. This news has been all the rage lately, especially after the outrage because of Trump's administration exiting.

Opinions aren't one-sided, however. Lots of people, including the international community, have expressed relief over the news. Still, the separation also had plenty of supporters, particularly in the traditional energy industry (i.e., coal and oil).

You probably can infer what the agreement proposes: renewable energy and ecological measures. But what does that mean for the real estate sector? Do we need to change the way we build homes? Let's find out.

What Does this Agreement Entail?

The Paris Agreement was a monumental achievement. Almost 200 countries banded together to reduce greenhouse gas levels. The main goal is to create standards for ecological strategies and transparency from the participating governments.

An example is a goal to lower global temperature increases under 2° Celsius, but that's not the end. It also works as a stimulus for the private sector to move towards cleaner practices via innovation.

This article from The White House explains the agreement in detail. We'll summarize the most important sections.

The General Visiona

The agreement aims to strengthen expectations, with the main effort to cut down temperature increases to 1.5° Celsius. It seeks to do so by establishing a standard methodology for all nations. That includes constant communication while developing plans individually.

Every country submits its target report every five years. These targets need to follow a sequence: each one building on the previous one. The collective process will go through evaluation as well to provide insight on future strategies.

Finally, the agreement doesn't look to regulate industries strictly. It prioritizes market innovation, particularly in technologies that aid toward the main objective.

Transparency & Accountability

Of course, the agreement won't work if its participants fail to live up to their responsibilities. It doubles as an incentive for the private sector, evidencing the countries' commitment to the targets.

The agreement's transparency framework looks to level the field for all countries. That means that both the U.S. and developing countries can deliver. These standards also enable an efficient review process. Assessing every country's performance becomes more effortless.

Finally, all countries need to provide critical insight from their markets. Firstly, emission inventories are mandatory reports, along with their sources. The same is true for their mitigation achievements. It enables progress tracking to evaluate whether or not all countries meet their targets.

Low-Carbon Goals

Our dependence on carbon derivatives for energy is the main reason behind air pollution and global warming. That means global investment needs to shift towards clean energy technology and environmental protection.

First, the targets spanning five years means that investors can find out about these changes with enough time to re-focus their investments. They signal that the world is moving towards cleaner energy, thus driving investment towards these technologies.

However, it's vital to show evidence that this effort is real. Particularly for poorer countries, meeting the targets can be a challenge. Investors need reassurance that the goals are possible, and that's why the agreement created standards. Additionally, funding has been mobilized towards problematic areas.

The article also details a couple of steps for showing the commitment to aid developing countries. The first one is known as "Mission Innovation." The goal behind it is to double research and development efforts and investments to define sustainable energy around the world.

Additionally, the agreement stated that the U.S. would double public finance for the climate in 2020. With Trump's actions, this goal is yet to be reviewed. However, there are good chances that Biden's administration will work toward it.

Cooperation from Multiple Sectors

Finally, the Paris Agreement seeks to nurture the same ambition from its founders in other sectors. Such a noticeable effort requires lots of help, and that means including state governments, companies, and entrepreneurs.

For instance, over 100 US mayors make up the Compact of Mayors; it establishes a way to compile individual cities' efforts toward the goal. The Under-2 MOU also includes numerous states, like California, Washington, and New York. It strives to lower greenhouse gas levels under their presence in 1990.

We also have the Act on Climate Pledge from over 150 companies and 300 colleges. These entities are committed to reducing their emissions while increasing their efforts to aid ecological change.

Bernie Sanders' Climate Plan: Early Look into Biden's Politics?

Some sources also reported that Biden's alleged support for Bernie Sanders' environmental proposals shed light on what we could expect from the current president. As The Guardian reports, this plan is quite ambitious, to say the least.

Sanders made the news because of the aggression behind its plan. It proposes a $16tn mobilization against climate change. The chance of double the losses was cited as the reason for such a hefty investment.

The proposal became a trending topic back in 2019 because of its expectations rising way above other candidates'.

2050 Expectations Summarized

In essence, the plan was to eliminate carbon emissions in the country by 2050. This target was a proposal from the U.N.'s panel. The goal was to rally other nations and create new jobs.

In other words, the plan aimed for full decarbonization. That's not the end; both transportation and electricity were aimed for 100% renewable energy. Other goals included expanding public ownership for power firms to provide free electricity toward 2035.

Is this Biden's Approach?

The same article points out that Biden's proposal was a mere $1.7tn. Similarly, he proposed to turn the U.S. into carbon neutrality by 2050, but they don't reach as far as to complete decarbonization.

Therefore, Biden's administration will likely be much less strict than Sanders' proposal. Biden has been reported as a critic of Sanders' plan. Notably, the Washington Examiner reported that the president has called the program "unrealistic."

Therefore, it's relatively safe to say that it won't be the same approach. The chances are that the Paris Agreement will dictate most of the targets for the current administration.

Real Estate & the Agreement

Now, is that good or bad news for the real estate sector? Most likely, it will be neither. It'll probably become one of the many industries making the switch. Whether or not it'll impact revenue is still unknown.

Thankfully, the U.N.'s Environment Program Finance Initiative (UNEPFI) has a detailed report on how the real estate industry can implement the agreement.

The document presents a framework for real estate investors and companies to identify the agreement's primary drivers and barriers. Let's go through the strategies detailed for different entities.

Asset Owners

A vital priority is to create a strategy detailing climate risks and opportunities. Doing so enables owners to find the best approach for managing material risks. It's also important to ensure that said management stays in-line with fiduciary duties and the funds' beneficiaries' interests.

The regulatory landscape is also a vital consideration. Environmental regulations will likely play significant roles in ensuring different industries comply with the agreement. Understanding all these risks and chances are critical for setting targets.

However, said targets also require evaluation. Not all of them will be appropriate for investments, and not all of them have to be made public. These targets must be reasonable, achievable, and sustainable.

Property Managers

The recommendations for investment managers and property companies are mostly similar to those for asset owners. The first step is to create an environmental, social, and governance strategy to adapt to climate protection regulations.

That includes evaluating different opportunities and risks to translate them into an actionable approach. Executing this strategy should include detailed reports. Advisors and consultants will likely be necessary for compliance, and selecting them is also essential.

In the end, keeping reports of all efforts toward environmental protection should be second nature.

Bonds & Advisors

Finally, equities, debt investors, and financial advisors have a different set of tips. Investors should tackle climate and management risks according to the initial strategy, keeping investment returns in mind.

Again, it's vital to understand how every risk and chance can change, benefit, or harm investments. Targets should be transparent and actionable, always considering possible regulatory measures. Stakeholders should also play a role in deciding the most appropriate targets.

When setting targets, understand what they are, who measures them and how, and the reports' frequency. All targets should provide enough incentive and outcome expectations.

Aligning the Industry

In the end, the real estate industry will need to find a way to adapt to the Paris Agreement's goals. Sustainability experts state that the construction sector is among the largest climate change drivers.

The article states that new floor space developments are more frequent than ever. However, most of these projects take place in countries without energy regulation. Therefore, the industry will need to adapt to these new expectations if real change is desired.

Luckily, the report mentions a couple of considerations that can help streamline the entire process.

Carbon Emissions

As mentioned, real estate is responsible for significant carbon emission levels. The industry is in noticeable need of innovation, and the potential for improvements is considerably larger than other industries. Spending on energy efficiency is virtually negligible.

That's why it's one of the main climate change targets in many countries, and pollution regulations are more common for this sector.

The ideal approach is to create a detailed climate strategy according to the Paris Agreement. Working with experts makes it possible to assess transition difficulties and opportunities. Policies are likely to change soon, especially after Biden's declarations.

Stranded Assets Risks

Stranded asset risks are common when the annual baseline for a building is larger than a maximum allowance. Retrofitting actions when it comes to energy is a vital approach to avoid this issue and ensure the asset's longevity.

The article also mentions that properties lacking retrofitting efforts are more likely to become stranded for 2050, especially given the agreement's expectations. Therefore, working towards the Paris Agreement's sustainable targets is a vital investment, regardless of a company's stance on the subject.

Using Energy Audits Effectively

Now, energy audits may seem like a good idea to reduce energy costs. However, it goes a long way beyond that. You could use a drone, for instance, to map whole buildings through a heat sync camera. The data is then fed to A.I., which can help you know all relevant issues with the building – things like which solar cells are not working, which windows are broken, or detect costly leaks.

You can hire an energy audits service that can help you understand the amount of energy you're losing out on your property.

Is Decarbonization Possible?

We've already mentioned that decarbonization was part of Sanders' plan, the same one called implausible by Biden. However, saying that achieving this by 2050 is unrealistic isn't the same as saying that the goal as a whole is impossible.

Experts, such as Deloitte, agree that decarbonization in real estate plays a vital role in achieving the Paris Agreement's goals. Besides, it also enables significant financial and health benefits for both property management companies and consumers.

That Said, how can the Real Estate Sector Move Toward Decarbonization?

The key lies in energy usage. Buildings require energy for temperature control and lighting. Construction materials are also responsible for significant carbon footprints from their production and installation.

The first step is to measure the footprint's extension across the company's operations. Climate risks that could impact the business in multiple scenarios are also worthy considerations.

Developing a decarbonization strategy requires comprehension of the entire climate spectrum. That includes how a company impacts the environment and vice-versa.

In the end, combating greenhouse gas emissions requires significant efforts. That includes carbon abatement and driving investment into key innovative technologies, like renewable energy and sustainable building materials.

Eco-Friendly Construction: an Emerging Trend

Finally, we can't ignore the growing eco-friendly trend in the construction sector. The market for green buildings has been growing exponentially in recent decades. Between 2005 and 2014, the market grew over 20 times, from $3 billion to $81 billion.

Interestingly, most of the growth occurred in the commercial real estate sector, particularly in office space. However, the trend has been taking over several sectors.

"Green buildings" are beneficial for more than the environment. Financial savings are also considerable, both for homeowners, tenants, and property managers. The same holds for residential and commercial real estate alike.

How does LEED Certification Work?

Before closing, we want to touch on a common question we receive from our clients: LEED certification. For buildings to be considered eco-friendly, LEED certification is vital. Different building types face different requirements when it comes to obtaining this certification.

In general, extensive measures should go into reducing resource consumption. That includes energy, water, and more. Non-LEED-certified buildings use significant amounts of resources, thus generating more waste. Maintaining is also more expensive.

LEED certification is an excellent way to ensure a company is compliant with the Paris Agreement. In the end, the real extent of this news on the real estate market depends on how effectively different companies adapt to new regulations and opportunities.