Weaver: Beyond the Numbers

In a landscape that’s seen an uptick in cybersecurity concerns thanks to a boost in remote work, hurried adoption of technology solutions and more, there’s one cyberattack du jour – ransomware.

To explore this specific kind of threat and its impact on government Weaver: Beyond the Numbers, The Business of Government host Adam Jones was joined by Weaver National Practice Leader, Advisory Services, Brian Thomas, CISA, CISSP, QSA.

Cyberattacks and threats to governmental organizations can be especially harmful to the workings of our society. The increasing incidence of ransomware attacks, which typically see bad actors infiltrate a network, encrypt key files and systems, and demand a ransom in exchange for their return to operation, can be extremely destructive.

“Ransomware is malware, or malicious software, that has been written by some threat actor, who, basically, is going to install software on your machine that will then encrypt the contents of the machine,” Thomas said. “You can’t access your own data…They’re essentially demanding a ransom to give you the encryption key to decrypt your own data.”

Large-scale ransomware events, such as the attack on the Colonial Pipeline, don’t typically play out via the way most of us think of when we think about cyberattacks. Instead, bad actors are infiltrating organizations with what Thomas called “good, old-fashioned hacking techniques” and working to establish as wide a presence as possible.

So, how can organizations and governments with ever-growing networks and ecosystems stay ahead of the “bad guys” without a silver-bullet solution, which Thomas said doesn’t exist? Listen to the full episode to hear Thomas’s insights.

This is a bit of a special episode of Weaver: Beyond The Numbers. It's our first anniversary, and the hosts want to say thanks. There are no guests on this episode. Instead, it's just the love of the real estate industry binding us together. Both hosts Rob Nowak and Howard Altschuler, are either going or just went on vacation. They want to remind listeners that those long car rides are great for episodes of the podcast.

"The fact that people are listening to our podcast, the fact that people are commenting on it and sharing, shows that people like what they're hearing and they want to share it with others, as well," Altschuler said.

It's been about a year since the first episode. The hosts have learned, grew, and with the help of our listeners, gained a lot of new insight into the world of real estate taxes: the success they've had, though, has been because of our listeners, supporters, and guests.

"We've had such a tremendous base of support from folks who are listening, commenting, suggesting topics, as well as those at the firm who have been incredible supporters," Nowak said.

Both Nowak and Altschuler mentioned that when they set out to do the show, they wanted to provide relevant content to the real estate community and was relevant across the industry. But, they want to hear about what you want to hear. So reach out to us.

Relocating a business is a complex move but something that can be very beneficial to a company. One state where they are flocking is Texas, named the “Best State for Business” by Chief Executive Magazine. What are the implications, tax-wise, for such a move?

On this episode of Weaver: Beyond The Numbers Real Estate Edition, host Rob Nowak, Real Estate Industry Tax Partner, talked with Howard Altshuler, Partner-In-Charge of Real Estate Services, about their love of real estate, alternative real estate and how the future of the office is…the office.

Earlier in the week, Altshuler was on a webinar that Weaver co-hosted titled, “A Look At Real Estate Investing Today” and moderated by Weaver's Sindhu Rajesh, Partner, Alternative Investment Industry Co-Leader.

"One of the things that came up in the discussion was alternative investment classes," Altshuler said. "Normally, when we think about investing in real estate, most people stick with the four primary classes: industrial, office, retail, multi-family. But, there's so much more out there."

New areas are becoming attractive, and investors are looking at different things and may be chasing better returns. The alternative real estate investments discussed included life sciences hubs, cold storage, self-storage, single-family rental and data centers.

Others that were briefly discussed were doctor's offices, ambulatory and surgery, and even rehab centers.

While there is a lot of other real estate to consider from an investor standpoint, another aspect to shed light on is the future of the office. The pandemic has shifted thinking about office space with more work-from-home options, but the office isn’t going away.

Altshuler added, "We all came to the same conclusion that the office isn't going anywhere. Work-from-home is real, but, at the same time, it's not as big as everybody thought."

Weaver’s Brad Jay, Partner-in-Charge of Manufacturing, Distribution and Retail Services, brought together three industry leaders to provide knowledge, insights and best practices from their experiences in business valuation and succession and estate planning.

Reference rate reform is happening. LIBOR is out the door, to be replaced by SOFR. To discuss this significant transition, Weaver Beyond the Numbers Real Estate Edition hosts Howard Altshuler, Partner-in-Charge, Real Estate Services and Rob Nowak, Partner, Tax Services spoke with their colleague Bruce Zaret, Partner, Risk Advisory Services.

So, why is LIBOR out? Zaret explained that, “in the 2008 financial crisis, there was a lot of reliance on LIBOR, but it’s a rate that can be altered or manipulated. SOFR should bring more stability since it’s based predominately on repo transactions.”

While LIBOR was forward-looking, Zaret noted that the new rate SOFR is more transactional and looks at an average over time. It’s also based on actual data, and banks can set a cap so that it’s not too volatile. “We expect it to be more reliable and predictable. It’s not based on future projections that are more prone to speculation and basically a group’s opinion,” he added.

The holder of this data will be the Alternative Reference Rates Committee, which includes primarily private organizations in the financial sector. They will dictate the rollout of the rate. LIBOR is expected to sunset at the end of 2021, but Zaret mentioned that it may be pushed out to 2023 because people aren’t prepared for it.

On the implications, Zaret said that, “looking at it from a contractual perspective, it may require more collateral. You could have gains or losses, but it will impact the overall financial structure. For banks, it will change the products they offer. There may be a difference in rate during the transition period.”

Commercial property tax assessments arrive every year, but how accurate are they, and should companies appeal? After all, this is a number that owners want to see low, low, low.

Providing his in-depth knowledge, Jason Armstrong, Senior Manager, State and Local Tax Services, joined his colleagues and hosts of Weaver Beyond the Numbers Real Estate Edition Howard Altshuler, Partner-in-Charge, Real Estate Services and Rob Nowak, Partner, Tax Services.

Armstrong first urged that organizations “make sure you’re viewing them every year, and they are in line with the market. We didn’t know how assessors would handle 2020, but in most cases, valuations stayed flat or increased.”

Armstrong noted that assessors should be using data around the market, rent rates, cap rates, vacancies and collections for businesses questioning their assessments. “Find out their parameters and numbers and compare them to your actuals.”

There is an opportunity to lower the valuation if it seems high, especially if the property suffered losses. “If you had high vacancies because of shutdowns, it should lower the value, because your net operating income is less,” Armstrong explained.

Companies can appeal assessments. That varies by state, but, in Texas, the timeline is 30 days after receipt of the assessment.

Armstrong also noted the advantage of a consultant in making an appeal. “Working with a real estate professional and tax expert, they know the process and pain points. They also have access to market data. Some of that is accessible, but a specialist will have things like a cap rate study on hand.”

Commercial property tax assessments arrive every year, but how accurate are they, and should companies appeal? After all, this is a number that owners want to see low, low, low.

Providing his in-depth knowledge, Jason Armstrong, Senior Manager, State and Local Tax Services, joined his colleagues and hosts of Weaver Beyond the Numbers Real Estate Edition Howard Altshuler, Partner-in-Charge, Real Estate Services and Rob Nowak, Partner, Tax Services.

Armstrong first urged that organizations “make sure you’re viewing them every year, and they are in line with the market. We didn’t know how assessors would handle 2020, but in most cases, valuations stayed flat or increased.”

Armstrong noted that assessors should be using data around the market, rent rates, cap rates, vacancies and collections for businesses questioning their assessments. “Find out their parameters and numbers and compare them to your actuals.”

There is an opportunity to lower the valuation if it seems high, especially if the property suffered losses. “If you had high vacancies because of shutdowns, it should lower the value, because your net operating income is less,” Armstrong explained.

Companies can appeal assessments. That varies by state, but, in Texas, the timeline is 30 days after receipt of the assessment.

Armstrong also noted the advantage of a consultant in making an appeal. “Working with a real estate professional and tax expert, they know the process and pain points. They also have access to market data. Some of that is accessible, but a specialist will have things like a cap rate study on hand.”

Greg Englert, Partner, Risk Advisory Services, continues Weaver’s Beyond the Numbers’ examination of ESG strategy to drive performance and value for companies in the second of a two-part series.

Englert provides a recap of topics covered in part one before diving into several current trends in sustainability reporting to begin the discussion.