BC Business
Sponsored Content
BCBusiness + Martello Group Building a strong portfolio of commercial real estate holdings can take years of diligence and careful judgment, but many investors fail to consider what will come of these assets beyond their lifetimes. According to Wayne Smithies and his son, Warren, of Vancouver-based Martello Property Services, there are...
Building a strong portfolio of commercial real estate holdings can take years of diligence and careful judgment, but many investors fail to consider what will come of these assets beyond their lifetimes.
According to Wayne Smithies and his son, Warren, of Vancouver-based Martello Property Services, there are several things that families preparing to pass on their holdings should plan for — from transferring knowledge of complex lease agreements, domestic and international tax laws and maintenance matters, to gauging their children’s interest in even carrying the family’s real estate torch.
A family business that has been in operation in B.C. for 30 years, Martello has helped many families through this transition process, and advises commercial property owners to look a few years down the road to avoid future conflict and ensure the long-term prosperity of their assets.
Below are a few important considerations for families preparing for such a transition.
Create Common GoalsReal estate transition planning should always start by establishing common goals, Warren emphasizes. “What does the family really want to see over the next five, 10 or 15 years and are those goals fractured, or is there a common theme or objective?” While some may wish to sell the portfolio altogether, others will see the value in nurturing it for the benefit of future generations — and in avoiding the considerable capital gains taxes they would incur by selling today. “It’s so important to establish that foundation at the outset to ensure a smooth transition,” says Warren.
Ensure Buy-inMany real estate investors make the mistake of assuming their children want to take over the day-to-day operation of the family’s holdings, but this may not be the case. It’s important to discern if the next generation is interested in the lifestyle associated with managing these properties going forward. “Families sometimes make that assumption without thinking about their kids’ needs. They may not have ever had that conversation,” says Wayne. “Making sure that the next generation is onside is imperative.”
Educate and InformSucceeding generations can come from a variety of professions ranging from education to medicine and law, and may not be equipped with the skills required to successfully manage their family’s portfolio. For those who lack the time or interest in getting up to speed, a real estate manager can help navigate the complexities of tax laws, tenancy relations and building maintenance, and can work closely with the family’s own tax advisers, accountants and other trusted professionals.
If a family finds itself overwhelmed by the nuances of real estate transition planning, professional real estate managers can help. As fiduciaries, they are duty-bound to dispassionately consider all possibilities for their clients’ holdings and act as an impartial third party in family mediations.
For Wayne, it comes down to having a personal touch and building trust with clients. “At the end of the day, we’re a family business so we know what it’s like working with families. We understand what they’re going through and want to help position them and their assets for future success.”
To learn more about professional real estate management, go to www.martello.group/management or call 604-662-4034.