Maine Real Estate & Development Association (MEREDA) to Host Annual L/A Fall Networking Social at Baxter Brewing Co.

After the summer break, make plans to join the Maine Real Estate & Development Association (MEREDA) at Baxter Brewing Co. in Lewiston on September 24 from 5-7 pm for its Annual L/A Fall Social.  Located in the historic Bates Mill, Baxter Brewing currently distributes its flavorful and unique craft beers statewide in Maine, Massachusetts, New Hampshire & Vermont.

MEREDA’s networking events attract key players in Maine’s real estate industry.  Come enjoy great food, Maine-made beer, and lively conversation with colleagues, friends and other industry professionals. A great forum to put a face with a name as well as make new business connections!

Interested in learning about the brewery? A guided tour will be available fifteen minutes before the event at 4:45 pm.

Visit www.mereda.org for more information and to register.

This Event is Sponsored by

LA Social 9 24

 

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The Right Equation for Responsible Development: Spotlight on Seaport Village & The Inn at Seaport

#1 LC_Seaport120814_001In the third of a 7-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, social impact and job creation.  Please join with us in celebrating Seaport Village and the Inn at Seaport in Ellsworth.  A conversation with developer, First Atlantic HealthCare.

MEREDA:  Describe the building and project.

First Atlantic HealthCare:  Construction of the $15.1 million Seaport Village Healthcare campus began in earnest in September of 2013 and through the great work of Foreside Architects and Ledgewood Construction we opened for service 14 months later in early December 2014. The 56,000 square foot project replaced an older smaller facility and is the newest facility to be built and operated by First Atlantic HealthCare. Seaport Village offers private accommodations for Skilled-Nursing Care, Skilled Rehabilitation and Assisted Living.  Noted for its distinctive architecture, high safety standards and person centered care Seaport Village joins seventeen other healthcare properties owned or managed by the firm throughout Maine. The build time of fourteen months was impressive when considering that most of the construction occurred during one of the coldest, snowiest winters in Downeast Maine history.

MEREDA:  What was the impetus for this project?

First Atlantic HealthCare:  There are three elements that together made our project possible.

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Brand Marketing Positions Businesses for Top Price When Selling

by Alexandra Heseltine, President, GCMD – web design + branding + marketing

Often times when a business owner decides it’s time to sell his or her company, revenues are on the decline.

If your business is upside down because debts exceed assets, then all that can really be sold are business assets since there is no positive cash flow. Selling a business under these conditions puts the owner in the worst possible position for earning a return on years of hard work.

As a former marketing manager for a business brokerage firm, I often heard stories about business owners who struggled with the challenge of positioning their business for sale. Many of these owners had invested years into their business only to find themselves needing to sell the business. As business declines, they often made cost-cutting decisions in hopes of recovering, and some of those cuts included reducing or eliminating their marketing efforts. The difficult reality for these business owners to accept is that they really don’t have as much to offer to a potential buyer as they believe.

Sell Your Business Like You Sell Your Home
It would be helpful if the business owner looked at their business from the perspective of the buyer. Exactly what is the buyer purchasing: a business with cash flow, strong customer base, and a return on their investment, or little to no cash flow, business assets, and a lot of accounts receivable? Thoughtfully planned and executed marketing that develops a recognizable brand and a professional image positions a business so that when the time comes, it can be sold for top dollar. To demonstrate this concept, let’s compare the purchase of a business to the purchase of a home.

Think Like a Buyer
Put yourself in the shoes of a homebuyer for a few minutes and imagine looking for a three-bedroom, two-bath home in Maine. As a buyer in a competitive market, you want a home that meets your needs and offers the best value (ROI) over the long term. As you peruse the online listings, you notice the differences in the quality and price of the homes offered. In the same neighborhood, there are two listings for similar style and age homes. The first home appears to be well maintained and updated, professionally staged and photographed with an online virtual tour. The second home appears to need decorating and updating; the snapshot photos show a cluttered interior and minimal preparation for sale. Even though these homes are very similar, which home would you be most likely to offer the higher price?

With a fresh coat of paint, updating and staging, the second home would be much more appealing and be better positioned to sell quickly at the highest price. Professional investors who understand the real estate market and construction will buy the second home at the lowest price possible, do the cosmetics and repairs needed and sell at a higher price for a profit. The same theory applies to selling your business.

Position Your Business for a Profitable Sale
Rather than selling your business at a loss, do what is needed to make your business attractive to potential buyers. Positioning your business for sale by developing a strong brand identity, marketing collateral and online presence will offer a better return on your investment when it comes time to sell. Keep in mind that buyers want a turn-key business when purchasing so they can focus on ownership transition, operations and immediate cash flow. Some tips for preparing your business for sale are:

·        Marketing Strategy Develop a workable strategy that can be rolled out over time and within a reasonable budget.

·        Logo/Brand Image Develop A contemporary, professionally designed logo for quick recognition by current and potential customers. The logo will be used in a multitude of marketing venues and will, over time, develop brand equity which has a price tag.

·        Website Review your website, (if you have one), to make sure it looks contemporary, contains current content and is connected to social media outlets. Your potential clients will want to know who they may do business with so create a positive, professional online presence and keep the site current through use of a content management system.

·        Social Media/Digital Marketing  If your company isn’t involved with social media or online marketing now is the time to start. Online news sources are a great way to get the word out on your company, develop long lasting relationships and do it cost effectively.

·        Marketing All marketing materials and customer touch points should have your logo and message clearly shown. This includes business cards, brochures, sell sheets, email campaigns, personal email signatures, e-letterhead, and signage, to name a few.

·        Consistency Whatever strategy is developed to improve your company’s image, be committed to being consistent about marketing your business—every day, every week, every month. Consistency on a small budget is far better than inconsistency on a large budget.

Implementing these key points will go a long way to positioning your business for sale and getting the best price possible.

_________

Alexandra Heseltine, President of GCMD web design + branding + marketing,  has over twenty years of design and marketing experience working primarily with established small to mid-sized businesses.  Her background includes commercial and residential construction, commercial banking, corporate law, real estate, non-profits and related industries.  See www.GCMD.Agency for more information.

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MEREDA’s Morning Menu Breakfast Series Returns on September 10th – Risk Management at the State House: What you don’t know could hurt you, or help you!

BreakfastLogoEvery year, the Maine Legislature and Governor consider over a thousand bills, and chances are high that some of them threaten to impact your business. Savvy business leaders today stay informed of the current issues, and know how to engage individually and through MEREDA to influence the outcome of issues that could impact their business.  Additionally, MEREDA continues to propose policy changes to improve the real estate development environment in Maine in big and small ways, helping to pave the way to your business success.  Come to this session to learn more about how to be informed about the issues that matter, and how to engage effectively individually and through MEREDA to influence the outcome of those issues of import.

MEREDA is well-known and well-respected in Augusta for representing commercial real estate interests. Our Legislative Committee and Public Policy Counsel work together closely during Legislative sessions to protect your real estate business interests, and to advance them.

Join Maine Real Estate & Development Association (MEREDA) for breakfast on September 10, 2015 from 7:30 – 9:00 AM at the Clarion Hotel in Portland to hear more about how we do it, as well as how you can easily remain abreast of policy developments and become more involved.

Visit www.mereda.org for more information and to register.

This MEREDA “Morning Menu” Breakfast Event is Sponsored by:

NSBPierceAtwood

 

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The First Regular Session of the 127th Legislature was exciting and eventful. Read on for a review of the highlights.

By Andrea Cianchette Maker, Government Relations Attorney, Pierce Atwood LLP, and Public Policy Counsel to MEREDA

Governor Elected with a Strong Vote

Last November Governor LePage was re-elected by a larger margin than expected, securing his second term which started January 7, 2015.  The governor’s first order of business was budget-related. Heading into the next biennial budget cycle, Maine faced a “structural gap” projected to be hundreds of millions of dollars.

Budget Submitted in January, Significant Tax Reform Proposed

On January 9th, 2015, Governor LePage submitted his biennial budget proposal to the Legislature.  This document proposed major tax policy changes, including eliminating the estate tax, reducing the personal and corporate income tax rates, eliminating municipal revenue sharing, transitioning certain business equipment from the property tax reimbursement program to the property tax exemption program, and other property tax-related proposals (including limited taxation of nonprofits).

Democrats Propose Own Tax Reform; Governor Proposes Constitutional Amendment

Democrats then unveiled their tax plan dubbed a “Better Deal for Maine” which focused on cuts to the income tax for the middle class, property tax relief, and investment in education. Meanwhile, Governor LePage called for a constitutional amendment to abolish the state’s income tax. Reduction of the income tax was the center point of this proposed biennial budget, with the governor indicating that if the Legislature failed to eliminate the income tax, the issue would go before Maine voters.

Final Budget Put Together by Legislative Leadership

During the final weeks of June, Legislative Leadership became more involved in the effort to craft a unified budget.  Although the governor proposed a continuing resolution to operate state government past the June 30th deadline, the Democrats responded that such a procedure is illegal in Maine.  Legislative leaders produced a budget that received unanimous approval from the budget committee and, on June 24th, the Maine House and Senate approved a $6.7 billion budget by a two-thirds or greater margin. Despite vastly different priorities, both parties were able to compromise. Republicans had achieved some tax reform and Democrats had achieved additional funding for K-12 education.

64 Line-Item Vetoes, Full Budget Veto, Legislature Overrides All

The governor returned the budget with 64 line-item vetoes adding up to about $60 million.  Both the House and Senate voted to override each of the vetoes.  A few days later, the Governor vetoed the entire budget and the House and Senate again took action to override that veto, passing into law the $6.7 billion budget, and avoiding a government shutdown by 13 hours.

170 Bills Vetoed, 120 Vetoes Overridden

Governor LePage, in response to having his income tax proposal rejected, threatened to veto all bills sponsored by Democrats.  By the end of the 127th First Regular Session, he had vetoed more than 170 bills; more than 120 of those vetoes were overridden.

65 Controversial Vetoes Submitted

A sequence of events led to the creation of 65 controversial vetoes submitted by Governor LePage.  On June 18, the day after the statutory adjournment date, the Legislature voted to extend its session.  No one made any objections to that vote.  On June 30, the Legislature adjourned until the “call of legislative leadership”, contemplating a return date of July 16 to deal with any outstanding vetoes that might be submitted on bills enacted in the last days of the Legislature.  The constitution provides the Governor a 10 day period following legislative enactment to sign or veto a bill, or to allow a bill to become law without his signature.  The Legislature received no vetoes in that 10 day window.  The Revisor of Statutes determined these bills had become law without the Governor’s signature and chaptered them as laws.  When the Legislature convened on July 16 to wrap up their final pieces of work, the Governor submitted vetoes of 65 bills.  The Legislature refused to address the vetoes, claiming that the Governor missed the 10 day deadline.

Maine Supreme Judicial Court Ruled that Vetoes were not Valid

Following a request by Governor LePage, the Maine Supreme Judicial Court heard oral arguments on July 31 on whether or not the 65 vetoes submitted by the Governor on July 16 were valid.  The Governor opined that either the Legislature adjourned on June 18 because they did not correctly extend the Legislative session past that statutory adjournment date, or in the alternative, when the Legislature adjourned on June 30 until the “call of legislative leadership” without announcing a future date for reconvening, it was impossible for him to return the vetoes to the Legislature because they were temporarily adjourned.  On August 6, Maine’s Supreme Judicial Court issued a unanimous decision finding that the Legislature did correctly extend the legislative session past the statutory adjournment date and that the 65 vetoes in question were not properly before the Legislature.  Acknowledging that the constitutional language is ambiguous, the Court reviewed the context of constitutional language, past tradition and practices of Maine’s Legislature and Governors, and judicial precedents of other jurisdictions for its reasoning.  The Court clarified that a bill is not prevented from being returned by a governor to the originating bodies when the Legislature is temporarily adjourned, whereas an adjournment “sine die” or “without day” which is the vote that terminates a session, does prevent a bill’s return until the next Legislative session is convened.  These 65 controversial  bills have become law, and unless otherwise specified in the bill, will become effective October 15, 2015.

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IRS Form 3115 and Common Area Maintenance Charges

By Rick Smith, Bernstein Shur’s Real Estate Practice Group and Green Building Team

Is it a tenant-paid repair or a landlord-paid capital expenditure? This is an important question for landlords and tenants with common area maintenance provisions in their leases. The IRS now classifies many items long considered to be capital expenditures as repairs. Brace yourself for a surprise or two.

Many leases use common area maintenance charge provisions that exclude capital expenditures from the expenditures that a landlord may pass through to the tenants as part of their monthly or annual common area fees. For example, expenditures to resurface a parking lot, which might take place every four to six years, might be treated as a capital expenditure under Generally Accepted Accounting Principles. However, under the new IRS tangible property regulations, the resurfacing would be a repair, because it is work that would be done more than once during a 10 year period. If a landlord were to take the position that this work now constitutes a repair for purposes of the common area maintenance clause in the lease, the full amount of the expenditure, every four to six years, would be included in the tenant’s common area maintenance bill. Even in leases where capital expenditures are shared to some degree by the tenants, the formula applicable to such sharing could be skewed dramatically if the new IRS definition of capital expenditure were to be used. Similarly, under the new tax rules, any roof repair “above the membrane” is considered a repair and not a capital expenditure, even though this might differ substantially from the understanding that the tenant and landlord had when signing the lease.

For the tax year 2014, many building owners and commercial tenants filed Form 3115 to confirm for the IRS that they are in compliance with these new tangible property regulations. For a thorough discussion of these regulations see “Tangible Property Regulations” by Baker Newman and Noyes’ Stan Rose and Andy Smith. The new regulations are required to be followed for tax reporting purposes but are not required for financial (book) reporting purposes. If an owner or tenant uses book accounting for financial reporting purposes, the new regulations should have no impact. However, if the owner or tenant bases its financial reporting on its tax returns, then the new regulations have an impact on operations because expenditures for repairs and capital improvements must be treated as required by the new tax regulations. The owner or tenant may want to change its financial accounting practices.

What should a landlord or tenant do?

  • If the company books are maintained solely on a tax basis, consult with your accountant and real estate attorney regarding the advisability of using both a GAAP-based and tax system in light of these rules.
  • Regardless of accounting method, landlord and tenant should consider amending the lease to make it clear which set of rules apply to repairs and operating expenses under the common area maintenance provisions.
  • The company, whether tenant or landlord should meet with its lender to determine whether the new tax rules will cause an inadvertent violation of the net income or debt-equity ratio requirements in a loan agreement or mortgage.

Today’s real estate tip is brought to you by Rick Smith, a LEED Accredited Professional and member of Bernstein Shur’s Real Estate Practice Group and Green Building Team. Stay tuned for more useful tips for real estate professionals.  

For more information, contact Rick at rsmith@bernsteinshur.com or 207 228-7228 or at 603 665-8829.

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The Right Equation for Responsible Development: Spotlight on Courtyard by Marriott

Courtyard by Marriott in Portland

Courtyard by Marriott in Portland

In the second of a 7-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation.  MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, social impact and job creation.  Please join with us in celebrating Courtyard by Marriott in Portland.  A conversation with developer, J.B. Brown & Sons.

MEREDA:  Describe the building and project.

J.B. Brown & Sons:  The project consists of a 132 room Courtyard by Marriott, 7,000 sf Tiqa restaurant, 14 residential condominium units, and 34 on-site parking spaces.  We also constructed a pedestrian way connecting York and Commercial Streets.

MEREDA:  What was the impetus for this project? 

Read more >>>

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MEREDA Welcomes New Vice Presidents

PORTLAND, Maine (July 17, 2015) – The Maine Real Estate & Development Association (MEREDA) is pleased to announce the appointments of Bruce Jones, Creative Office Pavilion and Brian Curley, PDT Architects to Vice Presidents for 2015 -2016.

Bruce Jones color cropBruce Jones, Business Development Manager at Creative Office Pavilion since 2004, works with business owners and managers to provide creative furnishing solutions that support their business objectives.   He has been an active member of MEREDA since 2010 serving on the Conference Committee. Bruce joined the MEREDA board in 2012 and that same year, was selected to receive MEREDA’s President’s Award.

Bruce has worked in the commercial furniture industry for over 20 years serving in various sales, training and management roles. He also serves in a leadership role with the Rotary Club of Portland, volunteers at the Long Creek Youth Development Center and is active with the Portland Society for Architecture.

Brian Curley 2015Brian M. Curley, AIA, LEED AP, principal of PDT Architects, is the team leader for corporate, housing, financial services, and interiors clients, with special expertise in historic reuse and energy retrofits. He joined the MEREDA Board of Directors in 2011, and is a member of the Legislative Committee as well as co-chair of the Conference Committee. He has delivered several talks on construction from the architect’s perspective for MEREDA’s breakfast seminar series, and received its President’s Award in 2014.

The recipient of several Statewide Historic Preservation Awards, Brian practiced at several Portland firms before joining PDT Architects in 1996 and becoming a principal in 2003.

“Bruce and Brian both exemplify leadership roles and can-do attitudes that are particularly welcomed in a volunteer organization such as ours.   We are thrilled to work with them now as Vice Presidents,” said Shelly R. Clark, MEREDA’s Vice President of Operations.

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Protect your Commercial Real Estate Investment

By Justin Lamontagne of NAI | The Dunham Group

My father always said, “If it’s worthwhile doing, it’s worthwhile doing right”. As a teenager, it was one of those absolutely grating sayings that usually accompanied some menial assignment or chore like moving a pile of rocks from one side of the yard to another or raking leaves in someone else’s yard. As a kid, I would roll my eyes. As a working adult, I now appreciate it (and look forward to tormenting my kids with it). I recently thought of those words while discussing a piece of the commercial real estate puzzle that is too often overlooked and not done “right”: commercial property insurance.

I traded some emails on the topic with my friend, Josh Fifield, a commercial insurance agent at Clark Insurance. Too many of my clients and other property owners simply look at insurance as another item to check off the list, without considering the true value it can have. Furthermore, there are significant cost-savings that can be had up front with proper coverage and planning. Along those lines, Josh suggests that, “including your insurance agent in the early planning discussions is extremely helpful regarding your investment whether it be new construction, development or renovation/rehabilitation. It also applies when adding to or subtracting from your property portfolio.”

Josh emphasized the importance of …

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The Maine Real Estate & Development Association Announces 2015-16 Officers and Welcomes New Board Member

2015 - 2016 Officers v2

Top Row: Michael O’Reilly, Paul Peck, Brian Curley Bottom Row: Bruce Jones, Bill Shanahan, Shelly R. Clark

PORTLAND, Maine (July 14, 2015) – The Maine Real Estate & Development Association (MEREDA) is pleased to announce its 2015-16 slated officers, which include Paul Peck of Drummond & Drummond, Brian Curley of PDT Architects, and Bruce Jones of Creative Office Pavilion, all serving as Vice Presidents, and Bill Shanahan of Northern New England Housing Investment Fund as Treasurer. Michael O’Reilly of Bangor Savings Bank will continue as President, in the second year of his two-year term, and Shelly R. Clark has been promoted from Assistant Secretary to Secretary of the Board. Shelly also serves MEREDA full-time as the organization’s Vice President of Operations.

Craig Young 2015MEREDA would also like to welcome a new member to its Board of Directors. Craig Young, CCIM of Scarborough, Partner and Senior Broker at CBRE | The Boulos Company has been elected to MEREDA’s Board of Directors and will serve on its Conference Committee.

Craig is a fierce advocate for his clients and takes the time to intimately understand their internal goals and processes, which enables him to provide a higher level of service. During his impressive tenure at CBRE | The Boulos Company, he has completed several complicated development transactions, dozens of high value investment deals and experienced all sides of the transaction as buyer, seller, landlord and tenant representative.

A Maine native, Craig feels strongly about giving back to his community. He is currently a board member of Big Brothers Big Sisters of Southern Maine, and is a past President of the Portland Community Chamber and Sweetser’s Kids at Heart program. MEREDA is looking forward to Craig’s contribution as a new member of its Board of Directors.

For further information, please contact MEREDA’s Vice President of Operations, Shelly R. Clark at 207-874-0801 or visit www.mereda.org.

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