CBIZ Commercial Real Estate Quarterly Newsletter – June 2021

Commercial
Real Estate
JUNE 2021 | ISSUE NO. 23
©
Copyright
2021.
CBIZ,
Inc.
NYSE
Listed:
CBZ.
All
rights
reserved.
(Continued on page 2)
QUARTERLYHOT TOPICS
CBIZ Commercial Real Estate
Reduce Taxes. Maximize Cash Flow. Minimize Risk.
CBIZ E
1-800-ASK-CBIZ • cbiz.com/commercialrealestate PAGE 1
@CBZ
CBIZ BizTipsVideos
IN THIS ISSUE:
CBIZ’s Real Estate practice
is uniquely positioned to
help you minimize risk
and capitalize on market
opportunities.
We work with owners,
managers, operators
and investors, as well as
commercial real estate
developers and partnerships
in all of the major CRE
sectors: retail, office, hotel,
multi-family, shopping
centers and real estate
investment trusts.
BidenAdministrationProvides
FurtherDetailsonTaxPlan
O
n May 28 the Treasury Department released the General Explanations of the
Administration’s Fiscal Year 2022 Revenue Proposals. This document, traditionally
known as the Green Book, outlines in greater detail the Administration’s tax proposals
which were initially previewed in the American Jobs Plan and the American Families Plan.
President Biden’s proposals, if enacted, would have a wide ranging impact on wealthy
individuals and on businesses.
It is important to remember that these proposals are just a starting point for any potential tax
law changes. The Green Book outlines the President’s “wish list” for tax policy, but it is Congress
that must draft and pass tax legislation. And because tax legislation must originate in the
House of Representatives, Democrats in the House will be the early group to watch as any tax
legislation takes shape. The sharply divided Senate would be the next stop, where procedural
rules could require significant revisions to fit under the Senate’s budget reconciliation rules.
And on June 6, West Virginia Democrat Joe Manchin wrote an op-ed in the Charleston Gazette-
Mail stating his intention to vote with Republicans to effectively prevent the passing of the For
the People Act that the Administration believes is needed to secure free and fair elections and
protect against voters restrictions imposed by states. This could be an early indicator of how he
will approach the Administrations infrastructure and tax bills.
Biden Administration Provides
Further Details on Tax Plan
PAGE 1
Additional Industry Insights
PAGE 2
Don’t Miss Out on the Newly
Supercharged Employee
Retention Tax Credit
PAGE 5
You CAN Manage Commercial
Property Insurance Costs In
2021
PAGE 7
Sector News at 2021 Q2
PAGE 10

@CBZ BizTipsVideos
CBIZ
(Continued from page 1)
So while the additional detail provided by the Green
Book helps to clarify President Biden’s proposals, any
final legislation could vary significantly in both the major
points and the final details. With that caveat in mind, an
overview of the Green Book’s major points and some
observations follows. This begins with major business
provisions, continues with the individual provisions most
likely to affect wealthy taxpayers, and concludes with
some significant omissions.
Reviewing the details included in the Green Book may
help provide a more detailed roadmap to where changes
to tax legislation may be targeted and assist with
business and individual tax planning efforts.
■ BIDEN TAX PROPOSAL: BUSINESS PROVISIONS
Raise the corporate tax rate to 28%, up from the
current 21%
Effective Date: Jan. 1, 2022
Additional Details: For fiscal year C corporations, there
would be a blended rate in the initial year with the tax
being 21% plus an additional 7% tax applied to the
portion of the taxable year that begins in 2022. This rate
increase would apply to all C corporations regardless of
size or whether they are publicly traded or privately held.
CBIZ Observations: Senator Joe Manchin (D-WV), a
critical vote in any tax plan, indicated that he disfavors
the idea of a 28% corporate tax rate, though he did say
that 25% would be realistic. This is just one of many
examples where individual members of Congress can
have significant influence on the contours of any tax plan.
A 15% minimum tax on book income for large
corporations
Additional Details: This provision would impose a 15%
minimum tax on corporations with worldwide book
income that exceeds $2 billion. In particular, taxpayers
would calculate book tentative minimum tax (BTMT)
equal to 15% of worldwide pre-tax book income
(calculated after subtracting any book net operating loss
deductions), less General Business Credits (including
research and experimentation, clean energy, and housing
tax credits) and foreign tax credits. This book income tax
would be creditable against the corporation’s regular tax
in future years.
CBIZ Observations: The book income tax would be
limited to very large corporations, but reports indicate
that the Biden administration has offered to expand this
tax as an alternative to raising the corporate tax rate to
28% as part of ongoing negotiations. The book income
tax bears many similarities to the corporate alternative
minimum tax (AMT) that was repealed under the 2017
tax law commonly known as the Tax Cuts and Jobs
Additional Industry Insights
COVID-19 Resources
Accelerated Recovery Resource Center. This NEW
resource center brings together solutions for busi-
nesses ready to accelerate recovery. Access it here.
Transformative Results - Case Studies in Recovery
& Growth. See ways organizations positioned
themselves to come through the disruption of
COVID-19 in a better situation. Second edition
available here.
COVID-19 Testing Requires Informed Consent.
Highlights the CDC’s new guidance for employers who
choose to incorporate workplace COVID-19 testing as
part of their COVID-19 protocols. Find it here.
Additional Content & Business Aids
Co-Sourcing: The Growth Trend for CFOs. Several
trends are converging that make supplementing
resources through co-sourcing and outsourcing more
appealing than ever. View our video insight here.
White House Warns Companies To Step Up
Cybersecurity. The recent cyberattacks have forced
companies to see ransomware as a threat to core
business operations and not just data theft, as
ransomware attacks have shifted from stealing to
disrupting operations. Read more here.
What CFOs Should Know About Their Cyber
Programs. With today’s threats to information
security, cybersecurity risks should be considered
part of an overall enterprise risk management
program for any business. Read full article here.
Is Your Organization Prepared for an Emergency
Evacuation? An organization’s first priority is to
protect the health and safety of everyone in their
facility. Check your plan against this guidance.
Active Shooter Preparedness Guide. Take steps
to protect your business and employees. Download
it here.
Featured On-Demand Webinar
Additional Relief is Here: Analyzing Opportunities
in the American Rescue Plan. The second largest
COVID-19 stimulus legislation to date, the American
Rescue Plan, offers widespread relief for individuals
and businesses. Access it here.
The Remote Work Arrangement: The Tide Is
Turning and What It Means for Your Workspace.
Our virtual roundtable delves into the signs of
change and what our team is hearing and seeing.
On-demand available here.

@CBZ BizTipsVideos
CBIZ
Act (TCJA). Because GOP members of Congress have
indicated that changes to the TCJA are nonstarters, the
new book income tax (albeit similar to the former AMT)
could perhaps be more palatable.
Make the excess business loss limitation permanent
Additional Details: The excess business loss limitation
prevents individuals from deducting business losses in
excess of $250,000 ($500,000 for joint return filers).
This provision, enacted as part of the TCJA, is set to expire
at the close of 2026.
Tax carried interests as ordinary income
Additional Details: This proposal would increase the
tax rate for hedge fund managers and other taxpayers
who provide services to investment partnerships and are
allocated income from a profits interest in the investment
partnership. An investment partnership generally is one
where substantially all of its assets consist of investment-
type assets (e.g., certain securities, commodities, real
estate, etc.). Such allocations would be subject to
ordinary tax rates, as well as self-employment taxes, and
would not be eligible for lower capital gains tax rates. The
change would be applicable to all taxpayers making more
than $400,000 per year.
CBIZ Perspective: The TCJA instituted a three-year
holding period on carried interests in an effort to limit the
benefit of the low 23.8% rate. This proposal would apply
regardless of a partner’s holding period. Partners with
adjusted gross income of more than $1 million would
already have capital gains subject to ordinary tax rates
under another of President Biden’s proposals, rendering
this carried interest proposal moot for such taxpayers.
Expand and harmonize the Net Investment Income Tax
(NIIT) and Self-Employment Contributions Act (SECA)
tax system
Additional Details: This change would apply either
the NIIT or the SECA tax to pass-through income from
both partnerships and S corporations to high income
taxpayers. First, for taxpayers with adjusted gross income
over $400,000, the net investment tax would apply to
gross income and gain from any trade or business that is
not otherwise subject to self-employment taxes. Secondly,
the classes of income subject to SECA taxes would be
expanded to include distributive shares of pass-through
income to include limited partners, LLC members, or
S corporation shareholders, when the owner provides
services and materially participates in the business.
CBIZ Perspective: The SECA tax proposal would upend
a foundational principle of taxation for S corporation
shareholders, subjecting their income allocations to
SECA tax to the extent they exceed certain threshold
amounts. The SECA tax proposal would also eliminate
the “limited partner” exception for partnerships that
has vexed taxpayers and the courts for years. And the
NIIT proposal would expand its reach so that it would
not matter whether the taxpayer materially participated
in the pass-through business. Notwithstanding these
issues, legislation cannot affect Social Security taxes
when enacted using the Senate budget reconciliation
process. This potentially could mean that only the
Medicare portion of the SECA tax can be altered in order
to remain within the confines of these rules.
Cap benefits under the like-kind exchange deferral
rules
Effective Date: Exchanges “completed” beginning
Jan. 1, 2022
Additional Details: Gains deferred under like-kind
exchanges would be capped at $500,000 ($1,000,000
for joint filers) per taxable year. Gains in excess of these
thresholds would be recognized and taxed accordingly.
CBIZ Perspective: The $500,000 ($1,000,000)
exception is determined on an aggregate basis and not
a per exchange basis. The wording of the effective date
suggests that in-process exchanges commenced prior
to Jan. 1, 2022 would still be subject to the new cap.
Also, it is unclear how these caps would integrate with
exchanges completed by pass-through entities.
■ BIDEN TAX PROPOSAL: INDIVIDUAL PROVISIONS
Increase the top tax rate for individuals to 39.6%, up
from 37%
Effective Date: Jan. 1, 2022.
Additional Details: The proposal would increase the
top marginal individual income tax rate to 39.6%. This
rate would be applied to taxable income in excess of the
2017 top bracket threshold, adjusted for inflation. In
taxable year 2022, the top marginal tax rate would apply
to taxable income over $509,300 for married individuals
filing a joint return, $452,700 for single individuals.
CBIZ Perspective: The proposed tax bracket thresholds
are an important detail revealed in the Green Book that
was not provided in earlier proposals. These thresholds
would be lower than those that apply under current law to
the highest tax bracket ($628,300 for married individuals
filing a joint return, and $523,600 for single filers).
Tax capital gains for high income taxpayers at
ordinary income rates
Effective Date: Retroactive to the “date of
announcement”
Additional Details: This proposal would tax capital gains
at ordinary income tax rates for taxpayers with adjusted

@CBZ BizTipsVideos
CBIZ
gross income that exceeds $1 million ($500,000 for
married taxpayers who file separately).
CBIZ Perspective: The Green Book again clarifies a
significant detail that was previously unclear, in specifying
that the $1 million threshold is based on adjusted gross
income, and the threshold applies equally to both single
filers and married individuals filing a joint return. By way
of example, the Green Book also clarifies that all sources
of income (including capital gains) are used to measure
the $1 million threshold. Notwithstanding these nuances,
the effective date creates an additional concern. It is not
yet clear whether the “date of announcement” is April 28,
the day President Biden released the American Families
Plan (AFP), or if it is May 28, the date the Green Book
was released, or if a different date might apply when
legislation is introduced in the House of Representatives.
In any case, the retroactive nature of the provision makes
this a challenge for tax planning. Taxpayers may be forced
to work to mitigate the tax impact instead of being able to
plan for a more favorable outcome.
Treat transfers of appreciated property by gift or on
death as realization events
Additional Details: Transfers of property by gift or on
death would no longer be sheltered from taxation at the
time of the transfer. Under the proposal, the excess of
the property’s fair market value on the transfer date over
the transferor’s basis in the property would be deemed
realized as capital gains by the transferor. Additionally
(effective Dec. 31, 2030), gains on property that have
not been the subject of a recognition event in the past 90
years would be deemed realized when transferred to or
from a trust (other than a grantor trust), partnership, or
other non-corporate entity. There is an option to pay the
tax over a 15-year period in certain instances.
Family owned and operated businesses would not be
subject to this deemed realization rule until the interest
in the business is sold or the business is no longer family
owned and operated. The $250,000 ($500,000 MFJ)
exclusion from capital gains on a principal residence
would be maintained. Gains from transfers of tangible
personal property, such as household furniture and
personal effects (excluding collectibles), would be
exempt. There would also be a $1 million per-person
(indexed for inflation) exclusion for gifts and transfers
at death. This exclusion would be per spouse and any
unused portion is transferrable from one spouse to the
other upon the death of a spouse.
CBIZ Perspective: When gains are triggered under the
deemed realization rule, the recipient obtains a basis in
inherited/gifted property equal to its fair market value
on the transfer date. However, the deemed realization of
gains on transfer would cause “phantom” income to the
transferor, meaning transferors may not have cash to pay
the resulting tax. Furthermore, it is not clear whether a
threshold for de minimis gifts (currently $15,000) would
continue to be excluded. Although it is not mentioned
in the Green Book, presumably gifts to spouses and to
charities would be exempt from such phantom income.
Regarding the gain exclusion on a principal residence,
it is unclear whether the exclusions will be applied only
to actual sales or exchanges, or if they will be applied to
a deemed transfer of the principal residence when the
other deemed transfer rules are triggered.
Significant Omissions
As previously discussed, some legislators from high-tax
states have stated that they will not support tax law
changes without a repeal of the $10,000 state and
local tax (SALT) cap. In light of the fierce advocacy for
repeal by these legislators, it is notable that repeal is not
mentioned in the Green Book. A full repeal of the SALT
cap would require additional offsetting tax increases and
would benefit wealthier individuals, which likely weighed
against inclusion in the Green Book.
The Green Book also does not discuss a cap or any other
significant change to the Qualified Business Income (QBI)
deduction. Repealing QBI benefits for individuals making
more than $400,000 was part of President Biden’s
campaign. Because this would be a substantial revenue
raiser, it may later emerge if other revenue raisers prove
to be unfeasible.
Concluding Thoughts
The Green Book provides greater detail on the
President’s tax plan that was eagerly awaited in the
wake of earlier proposals. Again, the Green Book simply
outlines the President’s agenda for tax policy, and it is
Congress that will have to draft, and eventually pass,
any tax legislation. Although President Biden enjoys a
Democratic majority in the House of Representatives,
the Senate is likely to be the chamber that creates the
most difficulties for him to be able to move forward with
his infrastructure and tax proposals. As a result, the
contours of final legislation may vary significantly in
both the major points and the final details. For additional
information on the Administration’s tax plan, please
contact us.
DISCLAIMER: This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional
advice. This information is general in nature and may be affected by changes in law or in the interpretation of such laws. The reader
is advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in
connection with the use of this information and assumes no obligation to inform the reader of any changes in laws or other factors that
could affect the information contained herein.

@CBZ BizTipsVideos
CBIZ
T
he Employee Retention Tax Credit (ERTC) was
established by the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, but limitations
on its availability tempered interest in the relief
measure. That is about to change, thanks to significant
changes made on Dec. 27, 2020, by the Consolidated
Appropriations Act, 2021 (the Act). The ERTC is now
available to employers that received loans under the
Payroll Protection Program (PPP), so any employer
meeting ERTC eligibility criteria can benefit. Because
employers potentially benefit from the enhanced ERTC on
a retroactive basis, employers should immediately begin
analyses to identify and calculate the value of retroactive
or prospective ERTC benefits.
Background
The ERTC is a fully refundable tax credit for employers
equal to a percentage of qualified wages (including
allocable qualified health plan expenses) that
eligible employers pay their employees. The ERTC
is commonplace in disaster relief legislation (such
as the CARES Act) and is designed to encourage
employers to retain their workforce during periods of
disruption. Under the CARES Act, the ERTC is equal to
50% of qualified wages paid after March 12, 2020,
and before Jan. 1, 2021. The CARES Act provides that
the maximum amount of qualified wages taken into
account with respect to each employee for all 2020
calendar quarters is $10,000, so that the maximum
credit for an eligible employer for qualified wages paid
to any employee during 2020 is $5,000.
Very generally, eligible employers for the purposes
of the ERTC are employers that carry on a trade or
business during calendar year 2020, including tax-
exempt organizations, that either:
Don’t Miss Out on the Newly
Supercharged Employee
Retention Tax Credit
(Continued on page 6

@CBZ BizTipsVideos
CBIZ
■ Fully or partially suspend operation during any
calendar quarter in 2020 due to orders from
an appropriate governmental authority limiting
commerce, travel, or group meetings (for
commercial, social, religious, or other purposes)
due to COVID-19; or
■ Experience a 50% decline in gross receipts during
the calendar quarter.
As originally provided by the CARES Act, employers who
received a PPP loan were ineligible to claim the ERTC.
Prospective Changes
The Act makes several important modifications to the
ERTC that both expand and extend its application. The
prospective modifications extend the ERTC through the
first two quarters of 2021. Beginning on Jan. 1, 2021
and through June 30, 2021, the Act:
■
Increases the limit on per-employee creditable
wages from $10,000 for the year to $10,000 for
each quarter;
■ Increases the credit rate from 50 to 70% of
qualified wages;
■ Expands eligibility for the credit by reducing the
required year-over-year gross receipts decline
from 50% to 20% and provides a safe harbor
allowing employers to use prior quarter gross
receipts to determine eligibility;
■ Increases the limit on per-employee creditable
wages from $10,000 for the year to $10,000 for
each quarter;
■ Increases the 100-employee delineation for
determining the relevant qualified wage base to
employers with 500 or fewer employees;
■ Allows certain public instrumentalities to claim
the credit;
■ Removes the 30-day wage limitation, allowing
employers to, for example, claim the credit for
bonus pay to essential workers;
■ Allows businesses with 500 or fewer employees
to advance the credit at any point during the
quarter based on wages paid in the same quarter
in a previous year; and
■ Provides rules to allow new employers who were
not in existence for all or part of 2019 to be able
to claim the credit.
The maximum additional amount of per-employee
qualified wages is $20,000 during the first two quarters
of 2021, which would produce an additional per-
employee ERTC of $14,000 during 2021. This is only
the beginning of the additional benefits, since there are
potential retroactive benefits to also consider.
Retroactive Changes
The Act removes a limitation under the CARES Act that
prohibited employers from claiming the ERTC when the
employer also received a PPP loan. The removal of this
prohibition is made retroactive to the date of enactment
under the CARES Act, meaning employers may already
have potential ERTC benefits that did not exist previously.
The Act imposes guardrails to limit the extent of this
retroactive benefit, however. Specifically, the Act
provides that an employer may not claim the ERTC on
the same wages that are used to substantiate PPP loan
forgiveness. An employer chooses to apply wages toward
PPP loan forgiveness by making an election to not
claim the ERTC (the IRS will eventually establish these
election procedures).
Still, the retroactive benefits made by the Act to the
ERTC should not be overlooked. An employer may not
qualify for PPP loan forgiveness, in which case all of the
wages are potentially available for the ERTC.Further,
an employer may have incurred more wages than were
needed to substantiate PPP loan forgiveness, in which
case these “excess” 2020 wages are now available for
the ERTC.
The Act provides special rules that employers may use to
claim retroactive ERTC benefits. In recognition of the fact
that payroll tax returns have already been filed for the
first three quarters of 2020, the Act permits an employer
an election to treat the retroactive ERTC benefits as
incurred during the fourth quarter of 2020. For this
purpose, the retroactive benefits are those based on
eligible wages paid after Dec. 31, 2019, and before Oct.
1, 2020. Again, the IRS will eventually establish these
election procedures, but this election should prevent the
need to amend previous payroll tax returns in order to
claim the retroactive ERTC benefits.
Next Steps
The retroactive and prospective changes to the ERTC
dramatically increase its relevance to businesses
affected by the coronavirus pandemic. To assist you
with calculations for the amount of the ERTC we
developed an ERTC calculation template, which may be
downloaded here.
The IRS also has a webpage dedicated to the operation
of the ERTC, including information that is essential to the
determination of an eligible employer. As of the date of
this writing, the IRS webpage is not yet updated for the
changes made by the Act but it should be updated soon
and still has current information about eligible employers
that is unaffected by the Act.
For more information about the ERTC or the changes
made by the Act, please contact us.

@CBZ BizTipsVideos
CBIZ
E
ach year, property owners approach their
insurance brokers with a common question – are
my insurance premiums going up? No surprise to
anyone, the pandemic, civil unrest, economic uncertainty
and an abundance of disastrous weather events
influenced losses of over $1 billion in 2020, accelerating
an already hardening insurance marketplace – one that
is less friendly to insurance buyers. Reinsurance is more
expensive, capacity is decreasing with many providers
exiting the market, underwriters have become stricter
and premiums are on the rise for all insurance lines.
The Council of Insurance Agents Brokers (CIAB) Q1
2021 Commercial Property/Casualty Market Index
reports that premiums continued to rise across all-sized
accounts. The average increase in premium prices
was 10% in Q1 2021, the 14th consecutive quarter of
increased prices. Large accounts were most impacted,
with an average increase of 12.9%.
By mid-year you may be tired of hearing that “especially
this year,” business owners who educate themselves
on the trends that influence their insurance will have a
greater understanding of what can be done to influence
their insurance rates. But as renewals approach, it’s still
solid advice, and there are also some fairly standard
practices that will help you achieve your lowest total cost
of risk.
Ensure Your Risk Profile and Data Are Accurate
A careful assessment of unique exposures and
establishing effective, well-documented risk management
practices can make an organization more attractive to
insurance carriers. A robust risk management program
reduces the likelihood of expensive claims and minimizes
unexpected event losses.
Another important consideration is the quality of your
data. Property insurance underwriters want a complete
and accurate picture of the property they’re insuring.
Properly representing your risk (and risk management
policies) to the carrier will directly affect the rates and
terms offered.
The condition of the property and surrounding
neighborhood, age, deferred maintenance, environmental
issues, ingress/egress issues, vacancies and other
factors specific to an industry sector all impact
underwriting (and property tax assessments, by the way).
YouCANManageCommercial
PropertyInsuranceCostsIn2021
BY CBIZ INSURANCE SERVICES, INC.

@CBZ BizTipsVideos
CBIZ
Review and confirm key statistics like square footage,
statement of value (SOV) and construction occupancy
protection exposure (COPE) data. If you are more than
five years out from your last appraisal and you continue
to use Consumer Price Index (CPI) adjustments on your
SOV, you risk misstating real property value. Adjustments
for CPI do not take into account local changes, such as
increased climate activity, economic/social changes
that cause building costs to increase/decrease, and
exhaustion of local resources that escalate the cost of
obtaining raw material.
By simply cleaning up your key information elements and
presenting accurate appraised values, you’ll help better
position your organization for the best possible coverage
rates and terms.
2021 Trends Alert
Insurance experts often examine how outside influences
and trends affect the insurance marketplace, and
businesses should follow suit to determine what factors
impact their insurance coverage. For 2021, there are a
number of sweeping market developments to consider.
Rates continue to be affected by “social inflation” (i.e.,
the impact of societal trends and views toward increased
litigation, broader contract interpretations, plaintiff-
friendly legal decisions and larger jury awards).
Extreme weather events, such as hurricanes, tornadoes,
hailstorms and wildfires continue to make headlines as
they become increasingly devastating and costly. Many
experts believe severe storms, extreme temperatures,
wildfires and flooding are the new norm. As these
catastrophes become more frequent, the insurance
industry will need to create innovative solutions to keep
up with weather-related losses. Expect to see more
emphasis around weather readiness, especially from an
insurer’s perspective.
Social movements that have risen to prominence in the
last decade and throughout 2020 are expected to affect
organizations for years to come. Nationwide protests,
civil unrest regarding racial equality and diversity within
the workforce, the #MeToo movement and the Asian
American and Pacific Islander heritage movement all
continue the trend of increased corporate accountability
in regard to social issues. For insurers, this raises the risk
of employment-related claims, alleging discrimination,
harassment or other forms of unfair treatment.
Policyholders who take the necessary actions to avoid
such claims by documenting workplace inclusivity,
diversity and social awareness initiatives may reap the
benefits of reduced premiums.
And of course, in 2020 and into 2021, COVID-19 has
led to many complications in the insurance market –
additional exposures across practically every line of
coverage, elevated underwriting losses and various
policy restriction developments. Although the vaccine
offers hope for eventual return to normalcy, many of the
pandemic’s ramifications are expected to continue for
years to come.
Underwriter scrutiny is at an all-time high. Every
aspect of policyholders’ risk profiles is being closely
reviewed. In fact, some underwriters are altogether
refusing to consider businesses with elevated COVID-19
exposures. While deductible and premium costs are
rising, capacity has decreased with more stringent
coverage conditions and policy exclusions emerging for
pandemic-related losses.
Overall, COVID-19 has significantly tested the
preparedness of businesses everywhere. Moving
forward, it is critical to take a hard look at business
continuity and disaster response plans. Also, partner
with experts who understand your industry’s daily risks
and can help you prepare for the unexpected.
Cyber attacks are now in the urgent risk category
across all industries and the attack range is growing.
Cybercriminals are using an ever-evolving and
sophisticated array of tactics, targeting employees at
all levels of and roles at an organization to gain access
to your data. Commercial real estate companies have
accelerated implementation of highly sophisticated
technology solutions, referred to as intelligent buildings,
to meet the growing consumer services wish list – but
also as a COVID-19 workaround. While these solutions
offer many benefits, systems can be vulnerable to
cyberattacks. Underwriters have taken note. Mitigation
should involve both cyber risk management and
insurance coverage.

@CBZ BizTipsVideos
CBIZ
(Continued from page 8) Additional Resources
■ What’s Next Podcast Episode 15: How COVID-19
Affects Future Enterprise Risk Planning
■ What’s Next Podcast Episode 12: The Rising Cost
of Insurance Insurable Values
■ Top 6 Factors Contributing to Rising Construction
Costs in Today’s Market (article)
■ Six Steps to Minimize Business Interruptions
(article)
■ Revisiting Your Plan for the
Unexpected (article)
■ Cybersecurity Quick
Assessment (2-minute online test
of your cyber threat readiness)
Your Team
You need more than basic
commercial insurance to protect
your business assets. That is why
our risk consultants partner with
you to develop a plan tailored to
cover your particular exposures. If
you have questions about your risk
profile or your current coverage,
contact the CBIZ Insurance
Services Real Estate Team or your
CBIZ advisor.
2021 Market Outlook Forecast by Line of Coverage
Below is a high-level overview of 2021 forecasted rate
trends per line of coverage. For detailed insights by line
of coverage, access CBIZ’s 2021 Property Casualty
Market Outlook for the Commercial Real Estate Sector,
available for download here.
Line of Coverage Forecast Trends*
Commercial Property
■ Non-CAT exposed: +5% to +20%
■ CAT exposed: +10% to +25%
■ CAT exposed with poor loss history: +25% to +40%
General Liability ■ Overall: +5% to +15%
Commercial Auto ■ Overall: +5% to +25%
Workers’ Compensation ■ Overall: Flat to +5%
Cyber Liability ■ Overall: +10% to +30%
Directors Officers Liability
■ Public entities: +20% to +70% or more
■ Private/non-profit entities: +10% to +50%
Employment Practices Liability ■ Overall: +10% to +30%
Excess Umbrella Liability
■ High risk: +50% or more
■ Low to moderate risk: +30% or more
* Price forecasts are based on industry reports for individual lines of insurance. Forecasts
are subject to change and are not a guarantee of premium rates. Insurance premiums are
determined by a multitude of factors and differ per organization. These forecasts should be
viewed as general information and not insurance or legal advice.

@CBZ BizTipsVideos
CBIZ
SectorNewsat2021Q2
I
n case you missed it, here is a selection of Commercial
Real Estate news items and discussions from trusted
sources.
Big news – NMHC Annual Meeting 2021 Live and In
Person!
Recordings of all our general sessions are available to
NMHC members here.
After nearly 18 months of pandemic isolation, the
National Multifamily Housing Conference brought the
commercial real estate industry back together—in
person. They tackled the most pressing issues facing
our members in the next year—escalating construction
costs, skyrocketing insurance, accessing myriad rental
assistance programs, strategies to deploy capital in a
sellers’ market, and meaningfully advancing diversity,
equity and inclusion.
Navigating Rental Assistance, Securing Funds and
Tools for Communicating with Residents
Securing emergency rental assistance was one of
NMHC’s top legislative priorities during the pandemic.
This session brought industry leaders together to explore
how they are navigating the myriad state and local rental
assistance programs. They also shared how protracted
federal and state eviction moratoriums have affected
them and what steps they have taken to mitigate their
financial and legal exposure. View recorded session.
NMHC Focused on Rent Assistance, Tax Policy and
Housing Affordability
Click through to learn more about NMHC’s top
policy priorities.
NMHC highlighted the COVID and non-COVID legislative
and regulatory wins over the last year and provided
insights on the current state of play as it relates to
housing affordability, evictions and infrastructure. The
team also explained NMHC’s months-long advocacy
efforts to push for the efficient implementation of the
emergency rental assistance program. Lastly, NMHC
discussed the potentially negative impacts of the
President’s proposed tax plan and how NMHC will work to
guard against such policies.
What a Long, Strange Trip It’s Been: From the
Pandemic to Recovery and Beyond
As the pandemic seems to be giving way to a strong
economic rebound, there are still a number of questions
around what the pandemic’s hangover effect will be
on the apartment market longer term. After wrapping
the final NMHC Rent Payment Tracker webinar, market
analysts from leading property management firms took
the stage to share their views on the state of the market
and where the opportunities are beginning to show. View
recorded session.
CRE Industry Risk Environment
Rethinking Multifamily Risk Post-COVID
By Natalie Dolce | June 10, 2021
Posted on GlobeSt.com
These days risk mitigation is more than just insurance;
it’s the ability to run a business under adverse and
unpredictable conditions. The pandemic has forced
organizations to make massive operational changes that

@CBZ BizTipsVideos
CBIZ
have impacted the balance sheet, scattered the CRE
workforce and exposed the industry to new levels of risk.
Read full article. View recorded session.
White House Warns Companies To Step Up
Cybersecurity
Reuters | June 3, 2021
Posted on BusinessInsurance.com
The White House warned corporate executives and
business leaders to step up security measures to
protect against ransomware attacks after intrusions
disrupted operations at a meatpacking company and
a southeastern oil pipeline. The recent cyberattacks
have forced companies to see ransomware as a threat
to core business operations and not just data theft,
as ransomware attacks have shifted from stealing to
disrupting operations. Read more here. See WHI letter
to business leaders here. See also Executive Order on
Improving the Nation’s Cybersecurity.
Construction Costs, Materials Shortages
NMHC Survey Dives into Record Construction
Costs, Delays
By Natalie Dolce | June 10, 2021 | Posted on GlobeSt.com
During the most recent iteration of NMHC’s Construction
Survey, 83% of respondents reported experiencing
construction delays in jurisdictions where they operate,
an increase from the results reported in each of the prior
six rounds. Read full article.
NAHB: The Government Understands the Lumber Crisis
By Ted Knutson | June 10, 2021 | Posted on GlobeSt.com
National Association of Homebuilders’ Chief Lobbyist Jim
Tobin said in a recent NAHB podcast he is optimistic the
government is going to try to do the right thing to solve
the lumber crisis. Commerce Secretary Gina Raimondo
“knows lumber is really a drag on us right now.” She
clearly understands the crisis and that domestic supply
is not meeting demand. The meeting struck all the right
tones. I think she really wants to solve this problem.
She knows lumber is really a drag on us right now,” said
Tobin who praised Raimondo for her data savvy, her good
relationship with the industry in Rhode Island where
she had been governor and for taking notes during the
meeting. Read full article.
Update: Lumber Prices Suddenly Move Downward
By Erik Sherman | June 15, 2021 | Posted on GlobeSt.com
Builders are feeling relief, unless they had stocked up on
product expecting an extended period of elevated prices.
Read full article.
Post-COVID Sector Trends
Cap Rates Facing Downward Pressure for Many Types
of CRE
“Investors flush with lots of capital are looking for
properties to buy.”
By Ted Knutson | June 16, 2021 | Posted on GlobeSt.com
Cap rates are facing significant downward pressure for
many types of commercial real estate, from apartments

@CBZ BizTipsVideos
CBIZ
to self-storage facilities to hotels and industrial
properties. Buzz of large investors – cap rates for larger
properties 100 units and up have been pushed down to
the 5% range in smaller markets. Read full article.
New Data Show Few Companies Will Dramatically
Reduce Office Footprint
But hybrid work will still be a part of many companies’ plans.
By Lynn Pollack | June 11, 2021 | Posted on GlobeSt.com
Just 9% of companies surveyed by CBRE plan to
significantly shrink their office portfolios, a figure that’s
far less than last year’s 39%. Of the 185 companies
surveyed by the CRE giant in its Spring 2021 Occupier
Survey a whopping 85% say they expect employees to
spend at least half of their time in a physical office. The
majority of large companies (72%) appear to be planning
for what CBRE calls “modest” office-space reductions;
smaller companies report they’re more likely to keep
their portfolio the same or grow it. Read full article. Later
coverage available here.
New Retail Sales Forecast for 2021 Significantly
Exceeds Earlier Prediction
Sales now expected to top $4.44 trillion this year.
By Les Shaver | June 11, 2021 | Posted on GlobeSt.com
The National Retail Federation has revised its annual
forecast for 2021, projecting that retail sales will now
grow between 10.5% and 13.5% to between $4.44 trillion
to $4.56 trillion this year. In February, NRF projected that
retail sales would grow 6.5%. By comparison, retail sales
totaled $4.02 in 2020. Non-store and online channels
accounted for $920 billion of purchases. Read full article.
Opportunity Zone Fund Launched with Eye on Data
Center Demand
What makes Redivider’s play so interesting is the focus
on cryptocurrencies as a driver for data centers.
By Les Shaver | June 11, 2021 | Posted on GlobeSt.com
Redivider is launching the Redivider Blockchain
Opportunity Zone Fund, which will invest in data center
locations nationwide. Opportunity Zones, at least
among the CRE community, are better known for more
traditional investments, such as affordable housing.
However, OZs can accommodate any real estate asset
category, including data centers. What makes Redivider’s
play so interesting is the focus on cryptocurrencies, with
their high energy and computing needs, as a driver for
data centers. Read full article.
CRE Still Needs to Catch Mobile, Now More Than Ever
Is the commercial real estate industry also ready?
By Erik Sherman | June 14, 2021
After a year of pandemic stay-at-home-please angst,
vaccination rates are up, states are reopening and
millions are out and about again, mobile devices to
the ready. Is the commercial real estate industry also
ready? Probably not and that will hamper them. “In my
experience, most commercial real estate agencies are far
behind the times when it comes to website technology,
especially when compared to the residential market,”
says Mike Willman, owner of digital consultancy Willman
Web Services. Read full article.
CRE Assets Without ESG Upgrades Risk
‘Becoming Obsolete’
Many markets are beginning to see potential price
discounts due to poor ESG performance.
By Lynn Pollack | June 15, 2021
As ESG continues to be a top priority for investors,
occupiers and end users alike, poor-performing assets
may experience price discounts, CBRE experts predict.
The firm’s 2021 Global Investor Intentions Survey shows
that investors intend to deploy even more capital this
year—potentially 15% to 20% more than last year—as
the global economy continues to recover from COVID-19
woes. And as those investors, together with consumers
and tenants, sharpen their collective focus on ESG
initiatives, “real estate assets that are not upgraded
accordingly run the risk of becoming obsolete.” Read
full article.
BTR/SFR – Is This the Asset Diversification Move for
Portfolio Resilience?
View NMHC recorded session.
Apartment communities were not the only product-type
to demonstrate resilience during 2020. Single-family
Rental (SFR) and Build-To-Rent (BTR) are quickly changing
market segments that have gained the attention of
institutional investors and housing owners and operators.
In the meeting’s closing session, members working
in this business model discussed the demand drivers
and characteristics of this product-type and why they
anticipate more capital expenditures to flow into this
segment of the housing stock, and more.

CBIZ Commercial Real Estate Quarterly Newsletter – June 2021

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to CBIZ Commercial Real Estate Quarterly Newsletter – June 2021

Similar to CBIZ Commercial Real Estate Quarterly Newsletter – June 2021 (20)

More from CBIZ, Inc.

More from CBIZ, Inc. (20)

Recently uploaded

Recently uploaded (20)

CBIZ Commercial Real Estate Quarterly Newsletter – June 2021