What Real Estate Asset Managers Should Know: Risk, Disputes, and the State of the Industry

April 21, 2020 update: To provide accounting relief and clarity during the COVID-19 crisis, the FASB published an exposure draft with proposals to delay the effective dates for Leases (Topic 842). Find more information here.

Last month, I wrote a synopsis of a recent Clark Nuber-sponsored real estate event. Many topics were covered by our esteemed panel; so many, in fact, that one article couldn’t cover it all.

This article addresses the other issues that real estate asset managers should know about, including insurance risks, disputes, and the state of the industry.

Risk and Insurance

Regarding mitigating risk,

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The Top 3 Things that Puget Sound Real Estate Asset Managers Should Know

By Julie Eisenhauer, CPA

I recently had the good fortune of moderating a panel of real estate and cybersecurity experts on the challenges facing asset managers. Many thanks to the following for sharing their knowledge with us: Bill Pollard, Managing Principal at Talon Private Capital; Greg Duff, Owner of the law firm Garvey Schubert Barer; and Susan Stead, Principal at insurance firm Parker Smith & Feek.

The conversations between the panel and the audience were engaging and wide-ranging, so for this article I distilled the event down into three main takeaways for real estate asset managers.

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Update: B&O traps for real property lessors

By Joe Haberzetle, JD, LLM

Note: the information in this article had additional updates on February 19, 2018. View the updated article here.

In our May 2014 article, we discussed the difficulties commercial and residential landlords encounter in determining the extent to which amounts received from tenants are subject to Washington B&O tax. While rental income is generally exempt from B&O tax, receipts from ancillary fees and services provided to tenants may not be exempt. A recently published Department of Revenue administrative appeal determination provides new insight on this thorny issue.

The question presented in the determination was whether promotional dues received by mall owners from their tenants were subject to B&O tax.

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So, you have implemented the tangible property regulations….now what?

By Amber Busch, CPA

At this point, you have likely not only heard about the new tangible property regulations (TPRs), but you have worked with your CPA on the implementation of these rules to your business. If you are like many of our clients, you have received significant tax deductions through a fixed asset review and method changes to comply with the new regulations. However, like many companies I speak with, you may still be confused over what to do now. How do you manage your improvements going forward to maintain compliance with the regulations and maximize current deduction?

The most important thing to remember about these rules is that they are complex!

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Tangible Personal Property Regulations – Much Ado about Nothing?

By Karen Dunn, JD, LLM and Amber Busch, CPA 

With all the hubbub among accountants about the new tangible personal property regulations, should exempt organizations be concerned, or is it, for them, much ado about nothing?

If you haven’t heard the scuttlebutt, these regulations provide long-awaited guidance on capitalization or expensing of improvements and purchases. The rules are complex, and their impact the business world is widespread. And yes, they do apply to exempt organizations. Specifically, the tangible personal property regulations (TPRs) can be advantageous to organizations that have unrelated business income (UBI) or a for-profit subsidiary.

Under the TPRs certain organizations may expense de minimis amounts paid for tangible personal property,

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Clark Nuber
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