On Oct 28: Mr. Steven McMurtrie, Commercial Services Director of Commercial Brokers Association,
came to brief our investor members on Fundamentals of Investment Analysis for Multi-family properties.
He highlighted the introduction of a bill that would prohibit a brokerage firm, broker, or any of its associated licensees from acting as a dual agent in connection with its representation of any principal in the same commercial real estate transaction. Investors should be aware of the conflict of Interest risk they could face in such a scenario.
He also reminded those targeting at commercial and multifamily buildings of the California Commercial Benchmarking law, likely to begin Jan. 2018, It requires annual energy benchmarking for all commercial and multifamily buildings greater than 50,000sf.
Further, for commercial leasing investors there is the Landlord/Tenant Commercial Leasing Disclosures which will require a statement as to whether or not the property has been inspected by a CASp (Certified Access Specialist) specialist for leases executed on or after January 1, 2017.
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Starting in 2019, however, they will be required to show 3 years of P & L and 2 years of balance sheets. This means that any leases on your books in January 2017 will have to be capitalized.
The briefing ended without being able to get deep into a lot of technical details. To address that, Mr. McMurtrie left the audience with class information for those who need to beef up their knowledge of the market.