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Vuelo Brief 9.13.24
Vuelo Ventures: Noteworthy Updates
Commons, LLC, an investment group led by Vuelo Real Estate Investments, has acquired Harmony Commons, a prime retail center in on East Harmony Road in Fort Collins, for $14 million. The property consists of two buildings totaling 25,701 square feet on 2.9 acres. Anchored by DC Oakes Brewhouse, the center is100% occupied by a diverse mix of 10 tenants.
“Harmony Commons has uniquely positioned itself as a community gathering place in south Fort Collins," said Josh Guernsey, managing partner of Vuelo Real Estate Investments." The sale underscores the strong demand for superior-quality retail assets in Northern Colorado."
The sale, which took place in August, was brokered by Waypoint Real Estate.
Strategy Spotlight
By Drew Yancey, Operating Partner
Shift to a Stakeholder Value Plan for Lasting Impact
Traditional strategic plans often fall short because they prioritize goals over the needs of key stakeholders, leading to unfulfilled initiatives. Vuelo Investments proposes a different approach: stakeholder value plans,, which focus on delivering measurable results for both internal and external groups like customers and employees. By aligning organizational objectives with the “jobs to be done” for stakeholders, businesses create a more actionable and sustainable roadmap for success.
Key Business Issue Spotlight
What Vuelo Is Tracking (...and Thinks You Should Be Too)
Property Tax Reduction in Colorado to Go Into Effect
First: What It Means to You
(Hypothetical scenario: $1M commercial property in Downtown Fort Collins)
- Real Estate Tax at 29% rate: $29,353
- Real Estate Tax at 25% rate: $25,304
- Tax Savings/Relief: $4,049 (13.79%)
Second: How We Got Here (if the rest of the story interests you):
- 2020: Colorado voters repealed the Gallagher Amendment (30-year-old provision that determined real estate assessment rates).
- May 2024: State legislature passed a bill to permanently reduce assessment rates.
- This summer, well-funded interest groups pushed for ballot measures that would threaten to further reduce taxes.
- Late August 2024: In an effort to remove any threatened ballot measures, the State Legislature, in a special four-day session, passed another bill that provides for further tax cuts (albeit more moderate than those that were proposed to be placed on the November ballots).
Results of these activities:
Residential property tax lowered from 6.4% to 6.25% (with further future cuts if state hits certain growth metrics).
Commercial property tax stepping from 29% down to 25% over the next two years.
Vuelo's Takeaway: Yes! Nice work, State Legislature. Inflation in property tax over the past two years is one of the largest contributors to landlord cost burdens and oppressive occupancy costs for our tenants. This is a responsible move in the right direction; however, community leaders will need to be mindful of our community budgets that rely on our tax money.
Stats We're Watching
Expected Interest Rate Reductions
On September 18th, the Federal Reserve will hold its next meeting, with many anticipating a reduction in interest rates.
With inflation at 2.5%, and job growth waning month over month, it would appear the fastest increase in interest rates in40 years has accomplished its intended purpose: to cool the economy.
Vuelo's Takeaway: Reaching the peak of interest rate increases, and being able to descend the mountain on the other side would be a welcomed breath of fresh air. Interest rates are a major driver in the cost of doing business and owning real estate. Knowing we are moving in the right direction with interest rate cuts would be a major cause for economic optimism.
Page Turners
The Five Dysfunctions of a Team, by Patrick Lencioni
The Five Dysfunctions of a Team, by Patrick Lencioni explores the common challenges teams face that hinder their effectiveness. Through a business fable, Lencioni outlines five key dysfunctions—absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results—that prevent teams from achieving success, and he offers strategies to overcome these barriers for improved teamwork and performance.
Vuelo's Takeaway: Our businesses all share common challenges, struggles and opportunities (we are all just making ‘widgets’). The key to working through all issues most often lies in how we organize and work together as teams. Understanding common dysfunctions of a team are a huge step towards working together to optimize results.