Skyscrapers could soon generate their own power with see-through solar cells

Lance Wheeler looks at glassy skyscrapers and sees untapped potential. Houses and office buildings, he says, account for 75% of electricity use in the United States, and 40% of its energy use overall. Windows, because they leak energy, are a big part of the problem. “Anything we can do to mitigate that is going to have a very large impact,” says Wheeler, a solar power expert at the National Renewable Energy Laboratory in Golden, Colorado.

A series of recent results points to a solution, he says: Turn the windows into solar panels. In the past, materials scientists have embedded light-absorbing films in window glass. But such solar windows tend to have a reddish or brown tint that architects find unappealing. The new solar window technologies, however, absorb almost exclusively invisible ultraviolet (UV) or infrared light. That leaves the glass clear while blocking the UV and infrared radiation that normally leak through it, sometimes delivering unwanted heat. By cutting heat gain while generating power, the windows “have huge prospects,” Wheeler says, including the possibility that a large office building could power itself.

Most solar cells, like the standard crystalline silicon cells that dominate the industry, sacrifice transparency to maximize their efficiency, the percentage of the energy in sunlight converted to electricity. The best silicon cells have an efficiency of 25%. Meanwhile, a new class of opaque solar cell materials, called perovskites, are closing in on silicon with top efficiencies of 22%. Not only are the perovskites cheaper than silicon, they can also be tuned to absorb specific frequencies of light by tweaking their chemical recipe.

This week in Joule, a team led by Richard Lunt, a chemical engineer from Michigan State University in East Lansing, reports that it tuned the materials to develop a UV-absorbing perovskite solar window with an efficiency of 0.5%. Although that’s fathoms below the efficiency of the best perovskite cells, Lunt says it’s high enough to power another window technology: on-demand darkening glass that halts intense light in the heat of the day, thereby reducing a building’s need for air conditioning. Lunt believes his team has a clear path to get to efficiencies of 4% in the next few years. At that rate, the cells could power some of the building’s lighting and air conditioning.

At the other end of the spectrum is infrared light, which strikes Earth’s surface more intensely than UV light and can therefore generate more electricity. Last year, in Nature Energy, Lunt’s team reported it had made transparent, UV- and infrared-absorbing cells with efficiencies of 5%, using “organic” photovoltaics—thin film sandwiches of organic semiconductors and metals. Lunt says future systems that yoke UV-capturing perovskites to infrared-capturing organics could reach efficiencies of 20%, while still being nearly entirely transparent.

A third approach to clear solar windows relies on so-called luminescent solar concentrators. In these windows, quantum dots, which are tiny semiconductor particles, absorb light at UV and infrared frequencies and re-emit it at the wavelengths that traditional solar cells capture. The re-emitted light is concentrated and shunted sideways, through the glass, to solar cell strips embedded in the window frame. Because quantum dots are cheap to make and only a small amount of solar cell material is needed to capture the re-emitted light, these solar windows promise to be inexpensive. Moreover, solar cells work better under intense, concentrated light. Already these windows have reached efficiencies of 3.1%, Victor Klimov, a chemist at Los Alamos National Laboratory in New Mexico, and his colleagues reported in Nature Photonics in January.

Don’t count out the semitransparent windows yet, says Michael McGehee, a solar windows and perovskites expert at Stanford University in Palo Alto, California. Last year, for example, the U.S. Department of Energy awarded $2.5 million to Next Energy Technologies in Santa Barbara, California, to perfect its semitransparent organic solar cell windows. The company has reached efficiencies of 7% with windows that absorb half of the incident sunlight that hits them, visible light included. That darkens them compared with clear glass, but because they absorb light from across the spectrum rather than at specific frequencies, they don’t take on the unsightly reddish or brownish hue. “It turns out that a window that absorbs about half the light across all of the visible spectrum looks great,” says McGehee, who also serves as an adviser to the company.

Wheeler isn’t sure which technology will end up on top. One factor will be toxicity: Glass breaks, and many solar window technologies contain a small amount of toxic materials. The technologies also have to be durable enough to last decades, as demanded by the building industry. But he says it’s a safe bet to expect that future buildings won’t draw all their power from the grid. They will generate it, too. “Builders have to put in windows anyway,” Wheeler says. “Why not piggyback on those windows?”

https://bit.ly/2KhCXAU

How to Manage Airbnb Reviews

Reviews on Airbnb play a crucial role in determining your level of success. Trust, safety, and respect are central to Airbnb’s values; having reviews that reflect these values increases your desirability, and in turn, will boost your booking rate. This guide will show you how you can manage your Airbnb reviews to improve your ratings and book more business. And if you are able to get your rating high enough, you will also earn Superhost status with Airbnb, which comes with great benefits.

Types of Airbnb Reviews

First off, unlike other travel review sites, Airbnb’s reviews are a two-way street. As a host, you have the ability to leave reviews for your guests, giving them more incentive to ensure they are modeling Airbnb’s core values as well.

• Public Reviews: Up to 500 words, the public reviews can sway people’s decisions of whether or not to book a place as a guest, or whether or not to accept a reservation request as a host.
• Private Feedback: Hosts and guests can send messages privately. This can be used to show appreciation, or to give some constructive feedback without tarnishing that person’s public reputation as a host or a guest.
• Star Ratings: This is what a lot of users see at first glance when looking for a host, so it is important to keep the rating high. The options of a star rating range from 1 to 5 for the overall experience. In addition to the generalized star rating, there are different categories users can rate as well: cleanliness, accuracy, value, communication, check-in, and location. Star ratings will only appear if you achieve a 3 star rating or higher for your overall rating.
• Group Reviews: This type of review is the host’s chance to give a public review on how a group was in general. This review appears on the profiles of each member of a given reservation. This review is only done about the guests, and acts as Airbnb’s way of giving a group of guests an incentive to behave well as whole.
• Cancellation Reviews: If you as a host end up cancelling a reservation on a guest, an automated review is posted to your profile as part of the penalties given for cancelling a reservation. You won’t be able to remove this, but what you can do at this point is write a public response to the review to clarify why it was necessary to cancel.

How Airbnb’s Reviews Work

To make sure the experience is fresh in each party’s head, a timeframe of 14 days after checkout is given to leave a review, as either a host or a guest. There are content guidelines Airbnb lays out to prevent hostile, irrelevant, or unsafe reviews being posted. If these guidelines are violated, Airbnb will remove the review. Once you’ve posted a review, you have up to 48 hours, or until the other party posts their review, to edit your review. You can always see any reviews about you or that you’ve written in the “your reviews” section.

How to Respond to Reviews on Airbnb

If you end up with a negative review on your Airbnb listing, it is best to address it as soon as possible in order to show that you care about their feedback, while clearing up any misunderstandings. In order to do so, go to “Edit Profile,” click “Reviews,” and select “Reviews about You.” Once you find the review in question, click “Leave a Response.”

Be sure to be well-versed when it comes to Airbnb’s content policy; if a review violates this, you can contact Airbnb to have it removed. Conversely, you also don’t want to be the one to violate the policy in your response.

If your reviewer left a negative review that is within Airbnb’s parameters, start your response by saying that you appreciate the feedback in a polite way. Look for any misunderstandings on the guest’s end, and objectively explain your policies to clarify why their expectations were not met and apologize for their bad experience. When it comes to addressing any “he said, she said” type scenarios, legal issues, or private information, always take the conversation off of the public review section and into private messaging. For your reference, here’s a comprehensive step-by-step guide on how to respond to a negative review.

Becoming a Superhost

If your listing maintains a rating of 4.8 or higher, meaning the vast majority of your reviews are 5 stars, you attain the label of “Superhost.” When you earn this title, Airbnb automatically gives your listing preference in relevant searches and attaches an icon next to your profile photo to let people know you are a Superhost. In addition to this, Superhosts get invitations to exclusive company events from Airbnb.

Since guests are choosing your listing as an alternative to a hotel, you need to make sure your place, and your communication, is just as hospitable as one. Amenities, responsiveness and and cleanliness are all important for achieving Superhost status.

In addition to exercising excellent hospitality for your guests, be sure your listing is as accurate as possible, clearly laying out what your guests can expect. Any unmet expectations during your guest’s experience can be expected to result in poor reviews. On the flipside, if you’ve painted a clear picture of what they can expect, and these expectations are realized, you can expect to see your ratings continue to soar.

https://bit.ly/2z7YxCP

10 Repairs That Aren’t Your Landlord’s Responsibility

One of the benefits of being a renter as opposed to being a homeowner is that the landlord is responsible for many costly home-improvement projects, like replacing a leaky roof or updating dying appliances. But not all domestic damage is his or her responsibility. What exactly are you on the hook for? Find out which home repairs are not your landlord’s problem — and start saving up for them now.

1. Replacing light bulbs, batteries, and HVAC filters

The landlord can’t control how much you run the lights, so replacing bulbs when they burn out is your responsibility. The same may be true for replacing batteries where necessary, including those in smoke and CO2 detectors, which should be outlined in your lease so that there’s no confusion about who’s supposed to keep up with home safety. Many leases will also require tenants to replace air filters in HVAC systems on a regular basis (ideally every three months, but landlords often supply the filters).

2. Unclogging backed-up drains that you caused

Here’s what I’ve learned from personal experience: Don’t put egg shells or potato skins in the garbage disposal if you don’t know how to unclog the sink. Otherwise, it’ll cost you a visit from the plumber, because this is definitely not your landlord’s problem. Same goes for the toilet — you do the crime, you do the time. Unclog it yourself or call someone ASAP before the problem turns into more damage from overflowing water and other “stuff.”

Practice other considerate grooming habits, too — like cleaning your hair out of drains to keep pipes in working order. If your landlord has to come over to do this for you, he or she has every right to tack an extra fee onto your rent that month.

3. Certain pest infestations

Assuming that you’re moving into a rental unit that doesn’t have any existing vermin problems (you should verify this independently before signing a lease; don’t just take the landlord’s word for it), you may be responsible for any rodent or bug infestations that occur after you move in. Be sure to check the terms of your lease as well as any state-specific laws regarding pests such as bedbugs.

Certain living habits, like leaving old food out or failing to regularly take out the trash, can attract ants, cockroaches, or even rats. If your landlord finds you responsible for the infestation, you will likely have to pay up to get rid of the problem.

Other bug or rodent infestations can happen naturally. Termites, for example, can infest any building regardless of your living habits. In this case, it’s on the landlord to get an exterminator.

4. Lawn care and snow shoveling at single-family homes

Unless your landlord has agreed to handle the mowing and snow shoveling in the single-family home you’re renting, you’ll need to get out there yourself. While you can let the lawn go for a little while, you’re legally required to have your sidewalk shoveled within a few hours after a snowstorm ceases. Fail to do it and you could face fines from the city, which also will be your responsibility. If you live in a multiunit dwelling, however, the landlord generally takes on this responsibility him or herself or hires someone to do it.

5. Damage to property due to your negligence

Being a decent human being means taking responsibility for damage caused by your own negligence — accidental or not — and that of your family, friends, kids, and other guests you invite into the home. Your landlord is not responsible for anyone’s carelessness; you can’t punch holes in the walls during an argument and expect them to fix it. And please, don’t lie to get out of whatever it is you or they did to damage the property. Be an adult, pay for the repairs, and move on (ideally with people who don’t destroy things).

6. Carpet cleaning and repainting

One of the biggest costs to landlords is replacing carpet ruined over time by tenants. I’ve seen some of this damage myself, and I’m frankly baffled by how disrespectful some people are and the lengths they’ll go to try to skirt the cost of cleaning or replacing the carpet.

Repainting the walls their original color (if you’ve painted them) is also your responsibility. This should absolutely be a clause in your lease, but you should always contact your landlord before making any paint decisions.

7. Pet damage

I once had a tenant who was not authorized to bring an animal into my rental but did so anyway. When I questioned her about it, she denied it. I explained to her the strong smell of feline urine upstairs, at which point she revised her story to having a dog in the house briefly. I wasn’t born yesterday, lady. The dog bit was a lie, too — but it didn’t matter what kind of pet was in my house. It was unauthorized, and I passed the cleaning bill right along to her.

8. Misuse of appliances that cause them to malfunction

You break it, you buy it — that’s the rule with appliances in your rental that you’ve damaged. Whether you’ve caused a dryer fire from neglecting to clean out the lint trap, burned out motors from working appliances too hard, or caused the dishwasher to overflow because you thought laundry detergent would work in lieu of dishwashing liquid (shout-out to my ex-husband), it’s all your responsibility. If any appliance just stops working, however, it’s probably on your landlord — so give ’em a call.

9. Holes in the wall from frames and shelving that you hung

Before you can get your security deposit back, your landlord will want to make sure a few tasks are completed, including patching up holes you’ve put in the wall from frames, shelves, and other damage you may have caused to the drywall and paint from adhesives. Skip out on it and you can kiss your money goodbye.

10. Anything else outlined in the lease

Read your lease closely before signing. Most issues of landlord/tenant responsibility are outlined in the document. Keep it on hand to go over again if issues arise so you can quickly determine whether or not the burden and financial responsibility falls on you. Once your signature is on the lease, you’re legally bound to it. If you feel like something outlined should be the landlord’s responsibility, discuss it beforehand to revise if necessary. After that there’s no wiggle room — it’s either your problem or not.

https://bit.ly/2Naa4nM

Autonomous vehicles may drive cities to financial ruin

IN ANN ARBOR, Michigan, last week, 125 mostly white, mostly male, business-card-bearing attendees crowded into a brightly lit ballroom to consider “mobility.” That’s the buzzword for a hazy vision of how tech in all forms—including smartphones, credit cards, and autonomous vehicles— will combine with the remains of traditional public transit to get urbanites where they need to go.

There was a fizz in the air at the Meeting of the Mindssession, advertised as a summit to prepare cities for the “autonomous revolution.” In the US, most automotive research happens within an hour of that ballroom, and attendees knew that development of “level 4” autonomous vehicles—designed to operate in limited locations, but without a human driver intervening—is accelerating.

The session raised profound questions for American cities. Namely, how to follow the money to ensure that autonomous vehicles don’t drive cities to financial ruin. The advent of driverless cars will likely mean that municipalities will have to make do with much, much less. Driverless cars, left to their own devices, will be fundamentally predatory: taking a lot, giving little, and shifting burdens to beleaguered local governments. It would be a good idea to slam on the brakes while cities work through their priorities. Otherwise, we risk creating municipalities that are utterly incapable of assisting almost anyone with anything—a series of sprawling relics where American cities used to be.

The problem, as speaker Nico Larco, director of the Urbanism Next Center at the University of Oregon, explained, is that many cities balance their budgets using money brought in by cars: gas taxes, vehicle registration fees, traffic tickets, and billions of dollars in parking revenue. But driverless cars don’t need these things: Many will be electric, will never get a ticket, and can circle the block endlessly rather than park. Because these sources account for somewhere between 15 and 50 percent of city transportation revenue in America, as autonomous vehicles become more common, huge deficits are ahead.

Driverless cars, left to their own devices, will be fundamentally predatory: taking a lot, giving little, and shifting burdens to beleaguered local governments.

Cities know this: They’re beginning to look at fees that could be charged for accessing pickup and dropoff zones, taxes for empty seats, fees for parking fleets of cars, and other creative assessments that might make up the difference.

But many states, urged on by auto manufacturers, won’t let cities take these steps. Several have already acted to block local policies regulating self-driving cars. Michigan, for example, does not allow Detroit, a short drive away from that Ann Arbor ballroom, to make any rules about driverless cars.

This loss of city revenue comes at a harrowing time. Thousands of local public entities are already struggling financially following the Great Recession. Dozens are stuck with enormous debt loads—usually pension overhangs—that force them to devote unsustainable portions of their incoming revenue to servicing debt. Cities serve as the front lines of every pressing social problem the country is battling: homelessness, illiteracy, inadequate health care, you name it. They don’t have any resources to lose.

The rise of autonomous vehicles will put struggling sections of cities at a particular disadvantage. Unemployment may be low as a national matter, but it is far higher in isolated, majority-minority parts of cities. In those sharply-segregated areas, where educational and health outcomes are routinely far worse than in majority white areas, the main barrier to employment is access to transport. Social mobility depends on being able to get from point A to point B at a low cost.

Take Detroit, a city where auto insurance is prohibitively expensive and transit has been cut back, making it hard for many people to get around. “The bus is just not coming,” Mark de la Vergne, Detroit’s Chief of Mobility Innovation, told the gathering last week, adding that most people in the City of Detroit make less than $57,000 a year and can’t afford a car. De la Vergne told the group in the Ann Arbor ballroom about a low-income Detroit resident who wanted a job but couldn’t even get to the interview without assistance in the form of a very expensive Lyft ride.

That story is, in a nutshell, the problem for America. We have systematically underinvested in public transit: less than 1 percent of our GDP goes to transit. Private services are marketed as complements to public ways of getting around, but in reality these services are competitive. Although economic growth is usually accompanied by an uptick in public transit use, ridership is down in San Francisco, where half the residents use Uber or Lyft. Where ridership goes down, already-low levels of investment in public transit will inevitably get even lower.

Although economic growth is usually accompanied by an uptick in public transit use, ridership is down in San Francisco, where half the residents use Uber or Lyft.

When driverless cars take the place of Uber or Lyft, cities will be asked to take on the burden of paying for low-income residents to travel, with whatever quarters they can find lying around in city couches. Result: Cities will be even less able to serve all their residents with public spaces and high-quality services. Even rich people won’t like that.

It will take great power and great leadership to head off this grim future. Here’s an idea, from France: There, the government charges 3 percent on the total gross salaries of all employees of companies with more than 11 employees, and the proceeds fund a local transport authority. (The tax is levied on the employer not the employee, and in return, employees receive subsidized or free travel on public transport.)

At the Ann Arbor meeting, Andreas Mai, vice president of market development at Keolis, said that the Bordeaux transit authority charges a flat fee of about $50 per month for unlimited access to all forms of transit (trams, trains, buses, bikes, ferries, park and ride). The hard-boiled US crowd listening to him audibly gasped at that figure. Ridership is way up, the authority has brought many more buses into service, and it is recovering far more of its expenditures than any comparable US entity. Mai said it required a very strong leader to pull together 28 separate transit systems and convince them to hand over their budgets to the local authority. But it happened.

It’s all just money. We have it; we just need to allocate it better. That will mean viewing public transit as a crucial element of well-being in America. And, in the meantime, we need to press Pause on aggressive plans to deploy driverless cars in cities across the United States.

https://bit.ly/2M4qywk

Housing is the least affordable in 10 years — here’s what’s to blame

Look back to before the housing bubble for some context

Stop us if you’ve heard this before: housing affordability is stretched — and getting worse.

(If that doesn’t sound familiar, read more here, here, here, and here.)

A report out Thursday quantifies, again, just how tough the housing market is. Attom Data Solutions’ affordability index shows home prices are the least affordable since the third quarter of 2008, when the financial crisis erupted.

It’s worth pointing out that comparing the current housing market to the one that existed 10 years ago is a bit dicey, for a few reasons. First, the response to the 2008 financial crisis sent mortgage rates to rock-bottom levels. It also blew a hole in the housing market, leaving millions of homes in a state of distress like foreclosure. That means the last 10 years have been anomalous.

Even more than that, home prices relative to income were much higher in the years before the crisis, as the housing bubble inflated. The chart above comes from real estate data provider Black Knight, whose numbers go back to well before the boom-and-bust of the last cycle.

Black Knight used national median home prices, national median incomes and the prevailing 30-year fixed-rate mortgage at the time to construct the chart. As it shows, housing was less affordable, as measured by all those factors, even in the years before the bubble started to inflate.

For example, the payment to income ratio in May 2000 was 27.8%, compared to 22.8% in May 2018. In May 2000, mortgage rates averaged 8.5%, while in May 2018, they were almost half that — 4.6%.

That historical context doesn’t mean we shouldn’t be taking a close look at what’s going on in today’s housing market, of course. For Daren Blomquist, Attom’s vice president, one of the defining characteristics of the market now is the disconnect between wages and home prices.

“It’s almost like the housing market and job market are operating in two separate worlds,” Blomquist told MarketWatch.

As Blomquist put it, “stagnant wages are a big part of this story.” That means that affordable housing isn’t just out of reach in high-flying metros like San Francisco and Seattle, but in places you might not expect. Flint, Mich., and Santa Fe, N. Mexico, were among the areas with the lowest “affordability indexes” in the second quarter, Attom’s analysis showed.

Meanwhile, 10 years on from the crisis, there’s still an outsize impact from investors snatching up homes, who aren’t as dependent on income to keep up. It may be hard to identify the presence of investors from their numbers alone, but when their activity comes on top of an already tight supply-demand dynamic, it skews pricing. (For more on that dynamic, see: Why it’s so hard to forecast home prices for 2018 — and why that should worry you.)

https://on.mktw.net/2ttAbx1

Madison Square Garden Explores Spin-Off, Jefferies Sees Opportunity

Madison Square Garden Co’s MSG 2.28% large collection of entertainment holdings is underappreciated by investors, according to Jefferies.

Besides its namesake arena, the company counts the New York Rangers, New York Knicks, TAO Group and Radio City Music Hall among its assets.

The Analyst

Jefferies analyst John Janedis upgraded Madison Square Garden from Hold to Buy and raised the price target from $233 to $350.

The Thesis

The company’s potential separation of its sports and other entertainment businesses is expected to be the catalyst that reduces the stock’s discount to fair value, Janedis said in a note. Of Jefferies’ $350 price target, $133 is attributed to the future MSG Sports, with the rest coming from MSG Entertainment.

Recent ownership transactions in the sports world “highlight the value of these scarce assets,” the analyst said. Besides the value of teams, broadcast rights for athletic events at the Garden — which range from basketball and hockey to boxing and e-sports — are also expected to fetch higher prices upon renewal, he said.

On the entertainment side of the business, Janedis sees TAO and The Forum to be key growth drivers over the next few years. The Sphere, a futuristic concert venue in Las Vegas that broke ground earlier this year, has the potential for tens of millions in sponsorship revenue alone, Janedis said.

Assuming the company moves forward with its proposed spin-off plan for MSG Sports and MSG Entertainment, the latter will retain a 33-percent stake in the former.

“MSG Entertainment could sell a portion of [that] stake to raise capital to help fund the Sphere, or swap shares in MSG Sports for [MSG Entertainment] as an effective buyback,” Janedis said.

https://bit.ly/2KBBgKK

Trump says SoftBank Son’s U.S. investment hitting $72 billion

U.S. President Donald Trump said on Thursday SoftBank Group CorpChief Executive Masayoshi Son is increasing his investment in the United States to $72 billion, significantly more than the $50 billion he had previously pledged.

“His $50 billion turned out to be $72 billion so far, he’s not finished yet,” Trump said, without providing details.

Trump’s comments came at a groundbreaking ceremony in Wisconsin for a manufacturing facility for Foxconn, the world’s largest electronics contract manufacturer, attended by Son and Foxconn Chairman Terry Gou.

Son made remarks at the event but did not reference the $72 billion figure.

In 2016, Son pledged to invest $50 billion dollars and create 50,000 jobs in the United States after meeting then President-Elect Trump.

“I couldn’t have decided such a thing before this new President,” Son said of that decision on Thursday.

SoftBank Group and its Vision Fund, the world’s largest private equity fund which in May last year raised over $93 billion, has made many of its investments in U.S. technology firms including ride-hailing firm Uber Technologies Inc and share-office space firm WeWork.

Foxconn, which is an investor in the fund, is formally known as Hon Hai Precision Industry Co Ltd.

https://bit.ly/2KwVSXE

Property Taxes Surge on Higher Values

Corporations that have been focused on the potential windfall that tax reform will bring are getting a reality check when they look at their property tax bills. Commercial and multifamily properties across the country are seeing a spike in property taxes as assessors continue to reset values to higher levels.

It has taken property tax appraisals time to catch up from the bounce back in values that have occurred after the recession. Some jurisdictions assess commercial property values every year, while others reassess values on a two or three-year cycle. In some cases, such as with the Carolinas, assessments occur every seven years, notes Dorothy Radicevich, a principal in the state and local tax practice and national property tax leader with accounting firm BDO. Most markets are now up to speed on property values, which have now exceeded pre-recession levels in many areas of the country.

“There have been major re-evaluations in commercial properties in all of metro Atlanta for the past two years and especially this year,” says John Hunsucker, owner of Property Tax Consulting LLC in Atlanta. Some of the lower valued properties don’t get as much attention. But this year most of the counties in metro Atlanta reassessed values on higher-end properties that resulted in tremendous increases, he says.

Although some states and jurisdictions do have a cap on how much taxes can be raised annually, such as 2.0 percent to 3.0 percent, Georgia has no such cap. Some taxing authorities in metro Atlanta have gotten very aggressive with tax assessments that have jumped by more than 300 percent, notes Hunsucker. In Fulton County, for example, some of the 2018 assessed values on high-end apartments are higher than what properties could trade for in the current market, he says.

Implications for CRE

Rising property taxes can be a problem for both tenants and landlords. “If taxes go up and they keep going up, it is going to push the NOI down for some owners,” says Hunsucker. “So, property taxes are a huge concern right now for Atlanta commercial property owners.”

Higher taxes can make it more difficult for landlords to push net rents higher. Retailers are especially rent sensitive and typically look at their gross occupancy cost, including rent, taxes and utilities and common area maintenance (CAM) charges as a percentage cost compared to store revenue. “If a tenant can pay 8 percent of revenue as rent, he’s not caring whether it is taxes, expenses or rent to the building,” says Michael Federle, a senior vice president at real estate services firm Transwestern in San Francisco. “Their concern is: how much money are we spending out the door all-in for that space?”

In addition, some commercial tenants have tax stops in leases that effectively put a cap on how much the landlord can raise taxes annually, meaning that not all taxes can be directly passed through to tenants, and owners will have to absorb some of those higher rates. Indirectly, higher taxes trickle down to higher rents for apartments. However, rents have already risen to high levels in some markets, which will make it difficult for owners to raise rents and still retain tenants, adds Hunsucker.

Property taxes pay for the government budget. So, cities with big budgets and high levels of government spending tend to have higher taxes. New York City has both high levels of government spending and some of the most expensive real estate in the world. Chicago also has a high local government spend, with more of the property tax burden shifted to businesses in order to give homeowners a bit of a break, notes Radicevich.

Pushback on higher taxes

Real estate tax laws and protocols on assessed values vary by state, as well as individual tax jurisdictions. According to the 2018 50-State Tax Comparison Study published by the Lincoln Institute of Land Policy, the effective tax rate for 2017 on a commercial property worth $1 million averaged 2.05 percent across the largest cities in each state. The five cities with the highest rates included Detroit, New York City, Bridgeport, Conn., Chicago and Providence, R.I. On the other end of the spectrum, the five cities with the lowest commercial property tax rates, at less than half of the national average, were Fargo, N.D., Virginia Beach, Va., Honolulu, Seattle and Cheyenne, Wyo.

Some owners are pushing back on higher values with property tax appeals. For example, Hunsucker is working on the highest volume of appeals his firm has seen since the crash a decade ago when property values plummeted. Although Georgia is supposed to be uniform in its assessments, it appears that the high-end office buildings and high-end apartments are carrying more than their fair share in certain areas of Atlanta, he says.

The Georgia state legislature has commissioned an independent study to determine whether they are going to revise some aspects of property tax assessments. One change that property owners are pushing for would be a cap on annual increases. There is also a bill that will be voted on this fall that would create a floating homestead exemption for homeowners. If that passes, counties would not be able to raise residential property taxes by more than 3.0 percent. “If that law goes into effect, it is going to put more of a burden on commercial property owners,” says Hunsucker.

California is seeing backlash against its Proposition 13. According to Prop 13, appraisal values are set by the sale price and taxing authorities are allowed to increase that assessed value by 2.0 percent per year. So, for properties that have long-term owners, gradual increases of 2.0 percent can result in a very low tax assessment. However, a flurry of investment sales in a hot market means that the bar on assessed value can move higher very quickly.

Prop 13 is under fire by some critics for setting up an unfair market advantage. For example, neighboring office buildings may be of equal value, but have very different appraised values for tax purposes if one has been held by a long-term owner and another has sold more recently at current market value. Potentially, the tax bill could be a deterrent for tenants deciding to locate in a building if taxes are much lower in the property next door or down the street.

“There is an issue there, which is the genesis for a new movement in California for the split tax roll,” says Federle. The proposed change would keep residential under the Prop 13 approach, while commercial property would be assessed annually to market value. In theory, the change would level the playing field and create more even distribution of property taxes on commercial properties.

Tax laws have also been hotly debated in other states across the country in the past year, including Texas. Another factor that can change the tax environment is the election of new local tax officials. For example, in the last year, Chicago elected a new tax assessor. That could potentially change the tax climate and decisions on how properties are valued, adds Radicevich.

https://bit.ly/2tT2RzT

Foreign Buyers, Sellers Play Growing Role In US Commercial Real Estate

International buyers and sellers are making their presence increasingly known in the US commercial real estate market, according to the National Association of Realtors 2018 Commercial Real Estate International Business Trends report, which analyzed cross-border commercial real estate transactions during 2017.

It found that nearly one-fifth of its realtors practicing in commercial real estate closed a sale with an international client in 2017, and 35% said they have experienced an increase in the number of international clients in the past five years.

Smaller Markets

The report also found a growing concentration of such deals in smaller markets.

“The profile of smaller commercial markets is continuing to rise as many foreign investors are attracted to smaller-sized properties in secondary and tertiary markets,” said Lawrence Yun, NAR chief economist — a trend that he expects to see continue this year.

That said, international commercial buyer and seller transactions typically tended to be at the higher end of the market. Last year, the median international buyer-side transaction was $975,000 and a median seller-side transaction was $1 million, while the median commercial transaction was $625,000.

The Transactions, Broken Down

Of the 59% of realtors who indicated they completed a commercial real estate transaction last year (compared to 69% in 2016), 18% reported closing a deal for an international client (compared with 20% in 2016). 46% closed a buyer-side transaction, 13% a seller-side transaction and the remainder closed both types of transactions.

Over 60% of buyer-side sales were transactions with foreign buyers who primarily reside abroad. Most seller-side transactions (57%) were of properties sold by clients who were temporarily residing in the US on non-immigrant visas.

Top Buying Countries

The top countries of origin for buyers were China (20%), Mexico (11%), Canada (8%) and the United Kingdom (6%). The sellers were typically from Mexico (20%), China (15%), and Brazil and Israel (both at 10%).

Top US States

Florida and Texas were the top two states where foreigners purchased and sold commercial property last year, with California being the third most popular buyer and seller destination.

Other findings:

• International clients found US commercial real estate markets to be a good value in 2017. About seven in 10 respondents reported that international clients view US prices to be about the same or less expensive than prices in their home country, according to Yun.
• Foreign buyers of commercial property typically bring more cash to the table than those purchasing residential real estate. 70% of international transactions were closed with cash, while NAR’s 2017 residential survey found that half of buyers paid in cash.
• For those not using all cash, 25% of commercial deals involved debt financing from US sources.
• A majority of buyers purchased commercial space for rental property (39%) or for business investment purposes (34%).

https://bit.ly/2KCb05U

Tesla Pitches Tent To Rush Out Model 3, Raising Quality Concerns

Under the gun to meet production goals for Tesla’s Model 3 car, Elon Musk has developed a temporary solution all-too-common in the retail space to benefit his company.

Tesla has erected a 137K SF pop-up tent housing the general assembly line for the Model 3 beside its car factory in Fremont, California, Bloomberg reports. The pop-up factory was built over three weeks under temporary permits, some of which — like that for an overhead sprinkler system — are still pending.

On Twitter, Musk boasted about the company’s construction methods. Tesla has fallen far behind its initial production goals for the Model 3, which Musk has since blamed on faults in the Fremont factory’s automated systems.

Some manufacturing experts told Bloomberg the tent, which was made from spare parts in just three weeks, is cause for alarm.

“The chaos of how Musk is going about this makes it difficult for him to provide the standardized, repeatable work routines that allow people to function,” Lean Enterprise Institute founder James Womack said. “He’s going to need a second tent for repair and rework.”

The pop-up factory is already fully staffed by humans and will gradually integrate automation in stages. Musk pledged to produce 5,000 Model 3’s per week by the end of June, and though time is running out, he exuded confidence in the tent system on Twitter.

https://bit.ly/2yNdERW

Harley Offshoring Move Just Latest In String Of Overseas Factory Relocations

Motorcycle maker Harley-Davidson Inc. plans to shift the production of its motorcycles to be sold in the European Union out of the United States over the next nine to 18 months. The news prompted a fierce attack from President Donald Trump who took to Twitter to publicly decry the decision Monday and Tuesday.

The company laid the blame for its plans to relocate operations squarely on the recent increase in EU tariffs on its motorcycles exported from the U.S. from 6% to 31%, CNN reports — these were raised in response to steel and aluminum tariffs imposed by the Trump administration on the EU recently.

“Harley-Davidson expects these tariffs will result in an incremental cost of approximately $2,200 per average motorcycle exported from the U.S. to the EU,” the company said in its Securities and Exchange Commission filing.

Though Monday’s move by Harley-Davidson might be in response to the recent tariffs, it is also true that the company has been offshoring for a number of years now. The company has opened factories in Brazil, India and Australia in recent years to make hogs for the international market, and plans to operate a new one in Thailand.

Early this year, Harley-Davidson announced plans to close a plant in Kansas City, Missouri, in the wake of falling sales, and shift some of its production to York, Pennsylvania.

Worldwide, retail motorcycle sales have been on the decline, dropping 6.7% in 2017 compared with the year prior. U.S. sales were down 8.5% for the year, while overseas sales dropped 3.9% year over year.

When word of the Kansas City plant closure broke, the International Association of Machinists and Aerospace Workers, which represents workers at the plant, sent a letter to the White House asking the president for his help in saving about 800 jobs in Kansas City. As yet, the president hasn’t replied directly to that letter, Vox reports.

The president wasn’t the only person who expressed anger at the motorcycle maker’s plans to move EU-bound production overseas.

“Harley-Davidson’s announcement today is the latest slap in the face to the loyal, highly-skilled workforce that made Harley an iconic American brand,” Machinists and Aerospace Workers International President Robert Martinez Jr. said in a statement. “Even before the EU’s announcement, Harley made the decision to close its plant in Kansas City… This latest move is in keeping with Harley’s past decisions to open plants outside of North America.”

In its SEC filing, the company disagreed with that assessment, asserting that it “maintains a strong commitment to U.S.-based manufacturing, which is valued by riders globally.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe. Europe is a critical market for Harley-Davidson.”

The Milwaukee-based company did not specify where EU-bound product would be made, or whether the move would result in the closure of any more factories in the United States.

https://bit.ly/2KrhtNW

NYC rent-stabilized properties OKd for hikes of up to 2.5%

The owners of New York City’s roughly 1 million rent-stabilized apartments will be able to enact the largest increase of rents in five years.

The city’s Rent Guidelines Board voted Tuesday to allow the rents of rent-stabilized apartments to be raised 1.5% for one-year leases and 2.5% for two-year leases, the New York Times reports.

The increases are more than the board allowed last year after back-to-back years of rent freezes. The ruling goes into effect Oct. 1.

A group advocating on behalf of landlords pushed for increases of 4.5% for one-year leases and 7.25% for two-year deals, but with the board made up of representatives appointed by the mayor, whose signature issue is affordable housing, such significant increases were unlikely, despite reports that operating costs for multifamily buildings increased 4.5% year over year, the Times reports.

According to a previous New York Times investigation, more than 150,000 rent-regulated apartments in New York City are now too expensive to be considered affordable to low-income New Yorkers, as landlords have pushed rents up over the years and laws protecting rent-stabilized units have been gutted. Rent-stabilized units in many parts of the city still rent for more than $2K a month.

https://bit.ly/2KbNpd3

NSA’s 8 Spying Hubs In Major American Cities

Though the National Security Agency is now well known for its vast network of digital surveillance, a new report from The Intercept has revealed eight of its most crucial pieces of real estate.

Google Maps

51 Peachtree Center Ave. NE in Downtown Atlanta

The NSA has a long and involved partnership with AT&T, one of the largest carriers of internet and telephone communications in the world, as first reported by the New York Times in 2015.

Of the thousands of AT&T properties, The Intercept identified eight buildings that are used as “backbone” and/or “peering” facilities by the company and the NSA. These facilities house and pass on troves of data, from AT&T customers and their competitors, as it passes across the country and through it from one foreign land to another. All the while, the NSA monitors the data as it passes through and accesses communication that possesses certain keywords or comes from flagged nations like Egypt, Saudi Arabia, Nigeria and other “regions of interest.”

Atlanta – 51 Peachtree Center Ave. NE

The Atlanta peering center, a 14-story building at 51 Peachtree Center Ave. NE in Downtown Atlanta, houses a “splitter” from the NSA that makes a copy of all internet traffic passing through, according to The Intercept.

Chicago – 10 South Canal St.

Google Maps

10 South Canal St. in Chicago

The AT&T facility in Chicago, 10 South Canal St., dwarfs its Atlanta counterpart at 28 stories and 527 feet tall. Built in 1971, it is designed to withstand a nuclear blast and is the hub of most of Chicago’s telephone and internet traffic. A former AT&T technician confirmed to The Intercept that the building in the West Loop Gate neighborhood is one of the NSA’s eight peering centers. “Peering” is the common practice of one internet service provider sharing, buying or selling bandwidth with another ISP when one is overtaxed and another has some to spare. That sharing, according to The Intercept, is what allows the NSA to intercept communication across a large portion of the world’s data network, not just the businesses that cooperate like AT&T. NSA’s exploitation of the peering practice is the key component of its most well-known program for capturing transmitted data, sometimes of American citizens, code-named Fairview, in which AT&T is the only private partner, The Intercept reports. NSA confirmed in April 2017 that it had been obtaining and observing some data with domestic origins and endpoints along with foreign communication, which is in violation of federal law. The NSA has been barred from tapping into communication passed across internet networks using the methods described above on any communications involving the mention of NSA targets, rather than communications only involving the targets themselves. The agency claimed it would only use such “upstreaming” technology in programs besides the Fairview initiative with AT&T, but its admission in 2017 that it had not ceased the practice proved that at least up until last year, these eight sites were still employed to obtain data from some U.S. citizens.

Dallas – 4211 Bryan St.

Bisnow

4211 Bryan St. in Dallas, an AT&T communications hub accessed by the NSA as of June 2018

The imposing building at 4211 Bryan St. in the Old East neighborhood, which the Dallas Observer once called “the fugliest building in Dallas,” is also one of the core of buildings that make up AT&T’s telephone and internet hub for the Dallas-Fort Worth area — population 7.1 million and rising — with major connections up to Oklahoma City and down to Houston.

Los Angeles – 420 South Grand Ave.

Google Maps

420 South Grand Ave. in Downtown Los Angeles, also known as the Madison Complex

The Madsion Complex at 420 South Grand Ave. is one of the largest telecommunication hubs in the country, and when it was completed in 1961, was the tallest building in Downtown Los Angeles, according to The Intercept. Helping the tower reach 428 feet is the microwave tower on top, used until the 1990s to relay telephone calls to satellites. Much closer than the upper atmosphere is One Wilshire, which sits two blocks away and is “the primary terminus for major fiber optic cable routes between Asia and North America,” according to a 2013 Los Angeles Times report. Due to its self-proclaimed status as the single biggest operator of internet infrastructure in the U.S., AT&T maintains peering relationships with a wide swath of domestic and foreign companies that may be unaware their users’ data is being tapped. One of those companies sharing bandwidth with AT&T is Cogent Communications, which has had disagreements with other ISPs over peering in the past. Cogent CEO Dave Schaeffer expressed doubts to The Intercept that NSA spying would extend past AT&T data to his own company’s, and said that if true, he would be “extremely concerned.”

New York – 811 10th Ave.

Google Maps

811 10th Ave. in the Hell’s Kitchen neighborhood of Manhattan

The 440-foot-tall tower at 811 10th Ave., in the Hell’s Kitchen neighborhood of Manhattan, is considered so impregnable that it was reportedly the place where the Secret Service would have taken President George W. Bush had he been in New York on Sept. 11, 2001. The entirely windowless building was built in 1965 as New York’s first major telecom hub, and in the 1970s was considered the largest of its kind in the country. In 2000, AT&T converted it to process internet communications, The Intercept reports.

San Francisco – 611 Folsom St.

Google Maps

611 Folsom St. in San Francisco in December 2017

The Intercept described the nine-story building at 611 Folsom St. as San Francisco’s “nerve center,” a designation it earned partly due to AT&T redirecting a number of connections throughout the area to be centralized there in 2003 and 2004. In 2007, retired AT&T engineer Mark Klein testified before Congress that he obtained unclassified documents showing the NSA had commissioned AT&T employees to install a secret room in the Folsom Street facility with splitter technology, much like at the Atlanta node, which copied all data coming into the facility to be reviewed by the NSA using keyword-flagging software. Klein testified that AT&T included data peered from other companies in such protocols, the Washington Post reported. The combination of AT&T’s partnerships with other ISPs and its cooperation with the NSA means that the agency may have the means to access most of the world’s data.  “[I realized that] they’re sending the entire Internet to the secret room,” Klein told the Washington Post in a 2007 interview.

Seattle – 1122 Third Ave.

Google Maps

1122 Third Ave. in Seattle in September 2017

The 15-story building at 1122 Third Ave. in Downtown Seattle has more windows than most buildings on this list, but they all appear from the outside to be blacked out. The Qwest Corp., a subsidiary of CenturyLink, owns the building and leases space within it to AT&T.

Washington, D.C. — 30 E St. SW

Google Maps

30 E St. SW in Washington, D.C., as of July 2017

AT&T is the minority owner of 30 E St. SW in Washington, D.C., with Verizon owning the lion’s share of the building and using it as its central hub of communication for the mid-Atlantic region.

https://bit.ly/2KrSief