The request was made to the Postal Regulatory Commission, which must approve the proposed increase that the Postal Service contends is necessary to achieve financial stability. If approved, the 5-cent increase for a “forever” stamp and similar increases for postcards, metered letters and international mail would take effect July 14.

U.S. Postmaster General Louis DeJoy previously warned postal customers to get used to “uncomfortable” rate hikes as the Postal Service seeks to become self-sufficient. He said price increases were overdue after “at least 10 years of a defective pricing model.”

In its filing, the Postal Service said it’s also seeking price adjustments on special services such as money order fees and certified mail. But there will be no price increase for post office box rentals, and postal insurance will be reduced by 10% when items are mailed, the postal service said.

HUNTSVILLE, Ala. — About a year ago, veterinarian Melissa Ezell started noticing subtle changes at the midsized animal clinic in Huntsville, Alabama, where she works.

She said she and other vets were feeling pressure from management to make a certain amount of money from every appointment. If a pet owner wasn’t going to spend enough, the message from management was to offer more services. She was urged to pack in more patients outside of normal business hours.

“Before, I never felt any pressure to be making a certain amount of money in a day,” Ezell, who started working at the clinic in 2021, told Stateline. “It was just, ‘Fill your schedule, practice good medicine, everything else will come.’”

The clinic is owned by National Veterinary Associates, one of the largest veterinary chains in the nation. In 2020 the company was acquired by JAB Consumer Partners, a global private equity firm based in Luxembourg. By early 2023, Ezell said, she felt a shift in atmosphere at the clinic and a greater focus on increasing profits.

Private equity’s foray into the human health care industry in recent years has drawn public outrage and legislative scrutiny as firms have been blamed for increasing prices, slashing services and shuttering hospitals to maximize shareholder profits.

Now, some veterinarians and advocates are sounding the alarm that private equity’s entry into the pet health care industry could lead to similar results.

Some states already have laws that prohibit non-veterinarians from owning veterinary practices, and some consumer advocates want states to review large-scale acquisitions in the industry.

“A large number of these funds are seeing veterinary medicine as a good profit center,” said Dr. Grant Jacobson, an Iowa veterinarian who serves on the board of the Independent Veterinary Practitioners Association. He said he’s seen corporate-owned chains in his region drive up prices for consumers, suppress market competition and skirt state laws that ostensibly prohibit veterinary practices from being owned by non-veterinarians.

Private equity firms such as Shore Capital Partners, KKR, TSG Consumer and JAB Consumer Partners have spent billions over the past few years on veterinary practices, specialty animal hospitals, pet insurance services and pet food companies. Among the companies owned by private equity are PetSmart, PetVet Care Centers, FIGO, Thrive Pet Healthcare and ASPCA Pet Health Insurance.

Private equity firms say those investments are giving clinics and other providers the capital they need to buy better technology, and that they are improving efficiency. And in many cases, corporate chains can offer their employees better workplace benefits, such as health insurance.

In a statement to Stateline, National Veterinary Associates said its corporate philosophy is “grounded in vets making medical decisions and not a corporate office,” and that its program of shared ownership by veterinarians is “the industry’s largest such program and unique among our peers.”

“Our vision is to build a community of hospitals that pet owners trust, are easy to access, and provide the best possible care,” National Veterinary Associates said in the statement.

JAB Consumer Partners did not respond to Stateline’s request for comment.

More pets, more money

Private equity uses pooled investment money from pension funds, endowments and wealthy individuals to buy controlling stakes in companies. The firms typically look for a quick return on their investment before selling it within a few years. They have been gobbling up small businesses in myriad industries in recent years — from nursing homes to car washes.

As pet ownership soared during the COVID-19 pandemic, private equity followed close behind. The pandemic years of 2020-2022 were “the peak years for private equity acquisitions of veterinary services and practices,” said Michael Fenne, senior coordinator for health care at the Private Equity Stakeholder Project, a nonprofit watchdog group that advocates for communities affected by private equity ownership.

Americans spent a record $147 billion on pet products and services last year. From 2017 to 2022, private equity spent $45 billion on deals in the veterinary sector, according to PitchBook, which tracks investment data.

The vet industry is attractive because it’s mostly made up of small, privately owned businesses that corporations can buy and consolidate into larger chains. And it’s mainly a cash-based business: Unlike in human health care, veterinary customers typically pay out of pocket, rather than rely on third-party payers such as insurance companies.

In some cases, private equity firms and other corporations buy community clinics from the veterinarians who own them for two, five or even 10 times their value. Then the firms roll them up into a larger chain of clinics that can corner a regional market.

It’s a strategy that can push other private owners out of the business, said Jacobson, the Iowa veterinarian. He spent nearly 20 years working at a privately owned practice in Iowa and had hoped to buy it when the original founder retired.

But the founder sold the practice to a large veterinary chain owned by Mars Inc. — the private company best known for owning candy brands that include M&Ms — for more than $1 million above his offer, Jacobson said. Mars, while not a private equity firm, is the biggest consolidator of pet care companies in the United States, owning pet food companies, pet pharmacies and veterinary care clinic chains such as Banfield Pet Hospitals and BluePearl.

About a quarter of general veterinary practices and about three-quarters of specialty practices, such as emergency and surgery care, are now owned by large corporations, according to John Volk of Brakke Consulting, a veterinary management consulting firm.

Some private equity-backed chains, such as National Veterinary Associates, buy community-based veterinary practices like Ezell’s without rebranding them under the chain’s name. As a result, clients might not be aware of the ownership change.

“It can appear you’re getting community-oriented care when there’s actually this set of big-box incentives underlying [the clinic] that comes from their private equity owners,” Fenne said.

Where vets want to work

Lori Kogan, a clinical sciences professor at Colorado State University’s College of Veterinary Medicine and Biomedical Sciences, surveyed nearly 900 veterinarians in 2022 about their experiences and perceptions of corporate vs. privately owned veterinary clinics.

Even though most of the veterinarians surveyed reported working for corporate-owned clinics, Kogan found more than half said they would prefer to work in privately owned clinics. The benefits offered by corporate chains, such as health insurance, didn’t seem strong enough to override other preferences, Kogan told Stateline.

“Feeling like they have a voice in decision-making, feeling like they’re recognized as an individual, those are things that are really important to people,” she said. “I think corporate ownership could accomplish those things, but it will take paying attention.”

Ezell, the veterinarian who left National Veterinary Associates, said the pressure has an impact on patients and their humans as well.

“Either you’re getting talked into additional services that may or may not actually be necessary, or your feel like you’re being rushed,” Ezell said. “You feel like you don’t have the time with the doctor, and you leave not fully understanding what was done to your pet or what is wrong with your pet if they’re sick.”

In its statement to Stateline, National Veterinary Associates noted that it has made “continued investment in technology and infrastructure, pioneering clinical research, industry-leading continuing education programs and wellbeing initiatives.”

Could states step in?

Last August, Thrive Pet Healthcare announced it would be closing the only 24-hour emergency veterinary clinic in the Rochester, New York, metro area. Thrive is a chain of more than 500 veterinary clinics and hospitals based in Austin, Texas, that is owned by private equity firm TSG Consumer.

“The thought of having the only 24-hour emergency pet care center in our entire metro area close was really scary,” said Rachel Barnhart, a Democratic member of the Monroe County Legislature in New York who has taken her dogs to the clinic. “We are a community of more than a million people. The idea that we can’t support a 24-hour pet facility is outrageous.”

Barnhart wrote a letter to the Federal Trade Commission, asking it to look into Thrive, which operates more than a dozen clinics in Rochester. She said she’d seen the FTC act against anticompetitive practices in the veterinary industry elsewhere, and she felt Thrive deserved similar scrutiny.

Thrive leadership said in a letter to Barnhart and in media reports that a shortage of ER veterinarians made it impossible to hire enough workers to keep the 24-hour clinic open. But Barnhart suspected the company wanted to shutter the clinic because its staff recently voted to unionize. CEO Tad Stahel said in the letter to Barnhart that the closure was unrelated to the staff unionization.

In 2022, the FTC took action against JAB Consumer Partners, which recently acquired an array of veterinary and pet service companies. The FTC required the firm to divest some of its vet clinics in California, Colorado, Texas, Virginia and Washington, D.C., as a condition of approving its multibillion-dollar purchases of two other multistate veterinary care chains.

If states were to authorize officials or agencies to review similar large-scale mergers and acquisitions in the veterinary industry, that “would be a good first step” toward protecting consumers, said Fenne, of the advocacy group.

Many states already have laws that prohibit non-veterinarians from owning veterinary practices, including Iowa, Minnesota, New Jersey, New York and North Carolina. The idea is to prevent corporate interests from guiding veterinarians’ medical judgment.

Experts and advocates expect to see further corporatization in veterinary care as more companies acquire not just vet clinics, but also other businesses across the pet care spectrum.

In February, asset management behemoth Blackstone Inc. acquired Rover, the nation’s largest online platform for pet sitting, dog walking and other services. In the past two years, JAB has acquired several of the largest pet insurance companies in the United States and Europe.

Ezell, the Alabama veterinarian, eventually decided to take a job at another clinic in town that’s privately owned. She will start there in a few weeks.

“Not all corporate medicine is horrible, and you can find amazing veterinarians and caring support staff anywhere,” she told Stateline.

“But it’s easy to lose sight of your values. The whole reason we’re doing this is we want to make a difference in animals’ and people’s lives. If we’re unable to do that, shouldn’t we try to fix that?”

Stateline is part of States Newsroom, a national nonprofit news organization focused on state policy.

©2024 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.

LAS VEGAS — Bruce Hiatt is hoping the integration of artificial intelligence will help take his real estate company to the next level, and in turn, could require fewer in-person agents in the process.

Hiatt, a Las Vegas-based broker who is also the owner of Luxury Realty Group, is currently beta testing an AI conversational avatar that speaks with potential homebuyers and learns from those interactions. Hiatt said they are scheduled to launch the technology in 22 U.S. cities and three in Canada as part of the rollout at the start of June. The goal is to have about 24 agents in each city.

The idea behind using AI is to aid in the homebuying search via software that can learn potential homebuyers’ names along with preferences of what they are looking for in a home. Hiatt is partnering with India-based chatbox builder Kore.ai on the technology. The company received $150 million in a new funding round, including an investment from chipmaker Nvidia.

“Unlike ChatGPT, our AI website will have a fully conversational AI avatar. The avatar’s name is Luxora and she will engage conversationally with you as you ask questions about Las Vegas real estate,” Hiatt said. “She can also handle very complex, compound search requests you say to her. For example, ‘show me Summerlin homes in the Summerlin Ridges with four bedrooms, an office, 3.5 bathrooms, a four-car garage, a kitchen with a Wolf stove and ceiling height in the great room 25 feet or higher.’”

Hiatt acknowledged there is obvious pushback from employees regarding the integration of AI as many fear the technology could cost them their jobs.

“People assume all AI is like that,” he said. “And we may not be able to speak for how it will effect other industries, but as far as real estate agents go, the AI is more of an advisor, it will never be a licensed agent, there’s always that legal need for a licensed agent… there’s still a certain need for humans to do the work too, maybe just in a different way.”

Jonathan Catalano, a real estate agent with ERA Brokers Consolidated in Las Vegas, said he uses AI technology to help him write marketing materials and descriptions for homes he is listing. He said he is not worried about AI actually replacing the need for agents.

“I look at it from the standpoint that this technology is here and as a Realtor I need to embrace it and use it to my benefit,” he said. “So I didn’t shy away from it when I think a lot of people get afraid of it, I mean it’s so complex and powerful and generally people don’t like change so they’ll kind of steer clear of AI, but I’ve been using it every day in my business.”

Aya Shata, an assistant professor at UNLV’s Journalism and Media Studies, who has been studying AI’s integration into the media landscape and overall workforce and the ethical issues arising around the technology, said there is always a initial fear factor built into public sentiment when something new comes around.

“I feel like it’s actually changing and for the better, and what I mean is that you always fear what you don’t know, but when you actually start to use AI, you realize it’s not really that perfect, and it can’t replace humans for so many reasons, it can’t replace jobs but it is definitely going to change how we do our jobs.”

Shata did acknowledge that some major corporations and companies, mostly within the online and technology industries, have publicly stated that they have been able to cut jobs and replace those positions with AI.

“It is true that AI may take a few jobs, but not all of the jobs or most of the jobs,” she said. “There are certainly jobs it can actually replace, but the point is that it will also offer a lot of new jobs as well. If you go back to when social media first came around and everyone was concerned, especially in television and radio and traditional forms of communication, it has not really been replaced but it’s been adapting. And with social media we now have lots of social media jobs like social media managers, social media directors and entire social media marketing agency companies, all of this just to manage social media.”

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©2024 Las Vegas Review-Journal. Visit reviewjournal.com.. Distributed by Tribune Content Agency, LLC.

This spring, while you’re dusting off high shelves and ceiling fans, take a moment to freshen up the items in your wallet, too. It’s a relatively quick task that can save you money. Those old credit cards you no longer use may be charging you annual fees. Perhaps you still pay for a membership to a wholesale club, but haven’t shopped there in a long time. (Plus, if you still have some unused gift cards left over from the holidays, you’re sitting on a gold mine.)

Don’t let that overstuffed wallet intimidate you. Here’s how to pare it down.

Clean up your credit

Credit cards are actually pretty germy, so it doesn’t hurt to literally clean them. After you do that, consider if each card still deserves a coveted spot in your wallet.

Evaluate whether a card is still a good fit

Your needs change over time, and your credit cards should keep up. There are lots of reasons you might want to make a switch:

• You’re ready to graduate from a secured credit card to an unsecured card.
• Your travel habits have changed, which affects the type of rewards card you’ll apply for.
• You opened a credit card with a 0% interest promotion to make a major purchase or pay down debt, but you’ve paid off the balance and the no-interest period is over.
• Another credit card is offering a compelling welcome bonus.
• Your spending habits have changed.
• You no longer want to pay an annual fee for a card.

You have a few options if you’re ready to change your card, but think twice before canceling and reaching for the scissors. Keeping an older credit card open and using it sparingly affects the average age of your accounts, which is a factor in your credit scores.

“In my mind, if there’s no annual fee, just keep it open,” says Nick Marino, a certified financial planner in Columbus, Ohio.

If you’re paying an annual fee on an old card you don’t use, call the credit card company to see whether there’s a no-fee card they can transfer your account to. This allows you to keep your account open at no cost. If that’s not an option, canceling the card to avoid the annual fee could be a money-saving move — and might be worth any temporary ding to your credit scores.

Look into lowering interest rates

The average APR charged for credit card accounts that assess interest is 22.75%, according to the Federal Reserve. At that rate, your existing credit card debt could be costing you a substantial sum every year. Applying for a balance transfer credit card and moving your debt over to it can give you a promotional 0% interest rate for a long time — often a year or more. This can save you money on interest payments while you pay down debt.

Review credit reports

This is also a good time to check in on the general health of your credit history. Get your free credit reports from annualcreditreport.com and make sure the information listed in them is accurate.

“Confirm you have access to each account listed,” Sara Young, a certified financial planner in Cincinnati, said in an email. “If not, stop the spring cleaning and get this cleaned up — this is hazmat-level cleaning!”

If you find errors, you can dispute them with the credit bureaus.

Mull over those memberships

While you’re reviewing credit cards, take a hard look at the membership cards you carry around. Gyms and wholesale clubs can be expensive, so if you haven’t used them in a while, it’s time to cancel.

“It all goes back to being organized,” Marino says. “Just continuing to monitor what your cash flow looks like and cutting things you no longer find value in.”

Sara Rathner writes for NerdWallet. Email: srathner@nerdwallet.com. Twitter: @sarakrathner.

Only about 1 in 8 adults know when they’ll be eligible for full retirement benefits through Social Security, according to the Nationwide Retirement Institute 2023 Social Security Survey. And compared to 2014, fewer people age 50 and up now know whether they may be eligible for Social Security benefits based on an ex-spouse’s record (they may) or if Social Security may offer benefits for their spouse or children (also yes).

For a program that’s been around for nearly 90 years, there’s still a lot of confusion about how it works. Here are some of the Social Security topics financial pros find are often misunderstood.

Working might mean a smaller Social Security check

If you claim Social Security before you hit full retirement age (66 to 67, depending on when you were born) and you’re still earning income, you’ll lose some of your Social Security benefits if your earnings go over a certain threshold.

The threshold isn’t terribly high: If you’re not full retirement age in 2024, you’ll lose $1 in Social Security benefits for every $2 you earn above $22,320. If you will reach full retirement age this year, you’ll lose $1 in benefits for every $3 you earn above $59,520, until the month you turn full retirement age. From that month forward, you’re in the clear.

“It’s just important to be informed that this penalty exists,” says David Haas, a certified financial planner in Franklin Lakes, New Jersey. “And you’re supposed to report it, which nobody ever does.” The net result of this quirk is that you might get a bill from Social Security for the income it wants back — but not for a few years.

“They bill you for it and tell you they’re willing to take it out of future payments,” Haas says. And if you report it, it can take the Social Security Administration (SSA) some time to make the adjustments, he says.

Social Security is taxed

Alas, Social Security benefits aren’t tax-free — and you have to ask Social Security to withhold taxes for you.

Nicholas Bunio, a CFP in Downingtown, Pennsylvania, recalls a client who forgot to have anything withheld from their Social Security benefits. “When they did their taxes, they realized they owed $10,000 to the feds and $2,000 to the state,” Bunio says.

According to the SSA, federal taxes come into play if the combination of 50% of your Social Security benefit plus any other earned income is more than $25,000 a year if you’re filing individually, or $32,000 a year if you’re filing jointly. To have taxes withheld, submit Form W-4V, Voluntary Withholding Request, to the Social Security Administration.

When one spouse dies, a Social Security check ends

If your spouse dies and their Social Security check was larger than yours, survivors benefits mean you can start collecting their higher payment. But you don’t get to keep both checks.

“The survivorship is really just collecting the higher benefit, but that means you have to forgo the lower benefit,” Bunio says. “There is going to be a loss of income.”

For this reason, planners often recommend that the higher-earning spouse wait as long as possible to claim. “Because that’s the benefit that’s going to remain when one of you passes away,” says Michael Dunham, a CFP in Dallas.

Business owners may be hurting their benefit amount

Entrepreneurs sometimes try to claim as little earned income as possible to pay as little in income tax as they can. But Social Security bases your benefits on your income over your best 35 earning years, and the lower your income in those years, the smaller your Social Security benefit will be in retirement.

“Business owners say, ‘Reduce my tax, I pay too much in taxes,’” says Catherine Valega, a CFP in Winchester, Massachusetts. People tend to overvalue the tax break now versus the long-term consequences of a smaller benefit later, she says.

To keep an eye on your Social Security numbers, create an account on SSA.gov. You’ll be able to review (and potentially correct) your earnings history.

The best claiming age is different for everyone

Although starting Social Security at age 70 nets you the highest benefit, it’s not the only answer to the when-to-claim question. Like a lot of planning, it depends on your circumstances. “We had a client where no one in her family had lived longer than age 76,” said John Scherer, a CFP in Middleton, Wisconsin, in an email. “She wasn’t super interested in making sure her income was robust into her nineties.”

That said, the longer you wait (to a maximum age of 70), the higher your check will be — for the rest of your life. “I think of it as longevity insurance,” Haas says. “I just went to somebody’s 100th birthday party. People are living longer.”

The right age for claiming Social Security benefits will depend on your health, family history, marital status and financial circumstances. Talking to a financial professional can help.

“Everybody is different,” Bunio says. “It’s all the more reason to really plan and think about: How much do you need for retirement?”

This article was written by NerdWallet and was originally published by The Associated Press.

More From NerdWallet

• Retirees: Is It Time to Downsize, Even in This Real Estate Market?
• 5 Ways to Calm Financial Stress
• What a Kroger-Albertsons Merger Could Mean for Grocery Shoppers

Kate Ashford, CSA® writes for NerdWallet. Email: kashford@nerdwallet.com. Twitter: @kateashford.

The EV automaker and ViaWest Group, a Phoenix-based real estate company, are building a Tesla Collision Service Center at 424 West Orange Show Lane near E Street in San Bernardino.

The city said the 30,000-square-foot center, taking the place of a shuttered furniture store, marks the first such repair site for Tesla in the Inland Empire. Other collision facilities are deep in Orange County in Aliso Viejo, San Juan Capistrano, and all the way up in Santa Monica.

“Having Tesla in San Bernardino is a big win for the Inland Empire,” said Mayor Helen Tran in a statement. “There are more and more Teslas on the road every day, and not having to travel to L.A. or Orange counties is very appealing for local and potential owners.”

The center will employ up to 90 people and should be completed by 2025, the city said.

While the project was approved in February, Tesla just confirmed its involvement this week, Tran’s office said.

“We are excited to play a role in this project, which will bring advanced vehicle repair technology and employment opportunities to the Inland Empire,” said Rodney Boden, ViaWest Group’s vice president of investment and development.

Tesla will own and operate the facility, where owners can get structural repair and light collision work. Cosmetic repairs on bumpers, trunks, side mirrors, wheels and glass also will be available.

Tesla notes the collision center will not feature a sales office or showroom.

Work begins on Inland’s first master’s physician assistant program

Cal State San Bernardino is celebrating the launch of what will be the region’s first Master of Science in Physician Assistant program.

The university will host a groundbreaking ceremony at 10 a.m., Friday, April 26 for the $16 million renovation and expansion of the Yasuda Center, which should help boost the region’s shortage of primary care providers.

The center, which should be complete by next spring, will be the home of the 27-month MSPA.

Work began in early February on the 15,600-square-foot building, as well as construction of a 2,500 square-foot addition. The project is adding a classroom, laboratory and clinical space for up to 50 students.

Funding for the expansion was pushed by State Sen. Richard Roth (D-Riverside). Part of the money is going toward hiring personnel and creating the new facility. The project also is using a $2 million federal Health Resources & Services Administration grant.

“As the first of its kind in the region, the program will fill a critical unmet need by preparing physician assistants who will increase equitable health care, advocate for patients, and ultimately, transform the health of all communities, including the rural and underserved, throughout the Inland Empire,” Tomás D. Morales, CSUSB president said in a statement.

The MSPA leads graduates to a career as primary care providers, also called PCPs. The university says the Inland Empire suffers from a shortage of PCPs, with just 41 per 100,000 patients. The federally recommended range is 60-80 per 100,000 patients. The Inland Empire has a shortfall of 1,500 PCPs, CSUSB said.

More federal funding for Riverside County projects

The money continues to flow toward infrastructure projects in the Inland Empire, this time nearly $13 million for the 39th Congressional District in Riverside County.

Rep. Mark Takano’s office tells us the congressman scored some key federal dollars for 14 projects. The grand total: $12,818,287.

Last week, we learned that Riverside County was getting $44.1 million for a bevy of infrastructure projects, thanks to the Consolidated Appropriations Act. That followed news that Rep Pete Aguilar’s 33rd district in San Bernardino County was getting $17 million for 14 local projects.

Here’s a rundown of the latest projects for the 39th:

—$5,166,279 for housing

—$2.5 million to renovate the historic armory building in Fairmont Park in Riverside

—$1.7 million to expand the senior center in Perris

—$1 million for a 26-home Veterans Buildproject by Habitat for Humanity in Jurupa Valley

—$850,0000 for public safety and transportation

—$200,000 for body cameras in Perris

—$150,000 for surveillance camera pilot program in Jurupa Valley aimed at illegal dumping

—$500,000 for Metrolink’s double track project from Moreno Valley to Perris

—$3 million for workforce development

—$1 million for new workforce development building and nonprofit business incubator in Moreno Valley

—$963,000 for the Inland Empire Quantum Initiative at UC Riverside

—$500,000 for UCR’s Agricultural Research, Education and Neighborhood Advancement Center

—$500,000 for the Inland Empire Technical Trade Center

—$3.9 million for water infrastructure

—$959,752 for Riverside Public Utilities PFAS treatment project

—$959,752 for Eastern Municipal Water District’s Cactus II feeder phase 2 project

—$959,752 for Eastern Municipal Water District’s purified water replenishment project

—$959,752 for Western Municipal Water District’s water infrastructure backflow upgrades to prevent water contamination

Klatch Coffee now available at Sprouts

Rancho Cucamong’s Klatch Coffee beans are now being sold at Sprouts Farmers Market.

The family-owned Klatch is known for its coffee and espresso, crafted from in-house roasted beans that are sourced from ethical and sustainable coffee farms.

Prices for Klatch at Sprouts run $19 to $20 for 11 ounces. Varieties include the company’s “Crazy Goat,” mocha java and espresso.

Klatch recently held a three-day national barista competition at its Rancho Cucamonga headquarters store. The event hosted 70 competitors and crowned three winners. Barista champion went to Frank La of Be Bright Coffee in Los Angeles. The second-place winner was Morgan Eckroth of Onyx Coffee Lab in Portland, and third place went to Jason Yeo of Saint Frank Coffee in San Francisco..

Desert Hot Springs retail property sells for $6.1 million

A 33,004-square-foot retail property within the Hacienda Palms shopping center in Desert Hot Springs recently traded hands for $6.1 million in an all-cash sale, according to Progressive Real Estate Partners.

The parcel at 13000-13160 Palm Drive includes a multi-tenant building and two pad buildings, one of which is occupied by Chase Bank. The property is part of the Hacienda Palms shopping center, which is anchored by Staters Bros.

Progressive represented the buyer and seller, identified only as based in Orange County. The buyer was based in Los Angeles County and owns other retail properties in the Coachella Valley.

The tenant mix includes Wingstop, an Indian restaurant, doughnut shop, ice cream parlor, dentist, hair salon, insurance agency, self-car wash and an auto repair shop.

The business briefs are compiled and edited by Business Editor Samantha Gowen. Submit items to sgowen@scng.com. High-resolution images also can be submitted. Allow at least one week for publication. Items are edited for length and clarity.

This story has been updated to reflect that $1 million was going to new workforce development.

The renewed federal inquiry comes after the U.S. Court of Appeals for the District of Columbia on Friday overturned a lower-court ruling from 2023 that had quashed the Justice Department’s request for information from NAR about broker commissions and how real estate listings are marketed.

Friday’s ruling was another setback for NAR, still reeling from a March 15 agreement to settle several lawsuits that alleged the group had violated antitrust laws and had conspired to fix the rates that real estate agents charge their clients. Pending federal court approval, NAR will pay $418 million in damages and will significantly change its rules on agent commissions and the databases, overseen by NAR subsidiaries, where homes are listed for sale.

Home sellers in Missouri, whose lawsuit against NAR and several brokerages was followed by multiple copycat claims, successfully argued that the group’s rule that a seller’s agent must make an offer of commission to a buyer’s agent had forced them to pay inflated fees.

The Justice Department now has another chance to peel back the curtain on those fees and other NAR rules that have long confused and frustrated consumers.

“Real-estate commissions in the United States greatly exceed those in any other developed economy, and this decision restores the Antitrust Division’s ability to investigate potentially unlawful conduct by NAR that may be contributing to this problem,” said Assistant Attorney General Jonathan Kanter, the head of the Justice Department’s antitrust division, in an emailed statement. “The Antitrust Division is committed to fighting to lower the cost of buying and selling a home.”

Americans pay roughly $100 billion in real estate commissions annually. In many other countries, commission rates hover between 1% and 3%; in the United States, most agents specify a commission of 5% or 6%, paid by the seller. Those high commission rates have been at the heart of NAR’s mounting legal challenges.

In an emailed statement Friday, representatives for NAR said the organization was “reviewing today’s decision and evaluating next steps,” adding that they remained “steadfast in our commitment to promoting consumer transparency and to supporting our members in protecting their clients’ interests in the home buying and selling process.”

Should NAR wish to appeal the ruling, it will have to now take it to the Supreme Court.

With 1.5 million members, a powerful lobbying arm in Washington and $1 billion in assets, NAR has an outsize influence on the real estate industry. It even owns the trademark for the word “Realtor,” and an agent must be a member to call themselves one.

The Justice Department sued the trade group in 2005, claiming that NAR promoted anti-competitive practices and inflated commissions, and the two sides agreed to a 10-year settlement in 2008, during which time NAR was required to change many of its policies regarding home listing sites.

After that settlement expired, the Justice Department reopened its investigation, issuing demands for documentation on how Realtors in the United States use NAR-operated databases to list homes and discuss commission rates, as well as the rules on agent compensation that the organization enforces among its membership.

The department even issued statements of interest in two lawsuits against NAR, regarding anti-competitive practices, including the Missouri case, which NAR settled in March.

In 2020, it looked like the case had ended — the Justice Department offered another settlement to NAR, this one requiring rule changes like more disclosure around broker fees. NAR agreed, and the investigation was closed.

But in 2021, under the new Biden administration, the Justice Department backed out of its settlement and announced it was reopening its inquiry. NAR took them to federal court in a bid to stop them, and initially was successful in January 2023. But the Justice Department appealed, and a three-judge panel of the appeals court sided with the department in a split ruling — with two judges in favor and one against.

In an interview with The New York Times, Michael Ketchmark, who was the lead lawyer in the Missouri home sellers’ lawsuit against NAR, called the renewed investigation “great news for homeowners and homebuyers across the country,” which would expand upon the impact of the civil cases against the group.

NAR’s agreement to settle came months after a jury verdict in October 2023 in favor of the home sellers that would have required the trade group to pay at least $1.8 billion in damages.

“Through our trial and our settlement with NAR, we advanced the ball as far as we could down the field,” he said. “This is an opportunity for the DOJ to continue to hold them accountable, and if they feel additional steps need to be taken through criminal prosecution or regulation, now they have the green light to do it.”

Because retirement plan assets will, in many cases, pass outside your living trust, your retirement accounts and your living trust need to be coordinated and reviewed often.

General rules

Retirement plans cannot be “owned” by a trust and thus are not controlled by a trust document. Instead, at your death, your retirement plan benefits are payable to the party you have indicated in a signed (and sometimes notarized) beneficiary designation form.

Retirement plans are in part controlled by federal laws, which do not recognize “community property.” In the event of a divorce, a state court may divide retirement plans between spouses based on community property laws.

However, the rules are different when a spouse dies. If one spouse dies, that spouse does not have any right to designate the beneficiary of the other spouse’s retirement plan.

This is true even if a portion of the surviving spouse’s retirement plan was considered community property under state law.

The basic conflict

You may have completed an estate plan with carefully considered terms for who received your assets, when, and on what terms. But none of that will control what happens to your retirement plan benefits.

Only the properly filled out beneficiary designation form will determine who receives the retirement plan benefits.

Your trust may say, “I leave my retirement plans all to my children in equal shares,” and may even have the plan benefits listed on a schedule of trust assets, but if the beneficiary designation form on file with the plan custodian names someone else, that someone else will receive the benefits.

For married couples with different beneficiaries– children from different marriages, for example—this can be of particular concern.

The bigger problem for spouses

Consider a couple who each have a child from a previous relationship. Assets include a $800,000 home, $1 million in investments, wife’s IRA worth $3 million, and husband’s IRA worth $600,000. Let’s even assume it’s all community property. Couple creates a trust and puts their home and their investments into the trust. The IRAs are not assets of the trust, as IRAs must be owned by individuals.

In the event of a divorce, each spouse would be entitled to half of everything. Each would end up with roughly $2.7 million in assets, and each would be free to create their own estate plan, leaving their $2.7 in assets to their one child.

In the event of a death however, the numbers are quite different. With children from different marriages, it’s not unusual to have a trust split into two trusts at the death of the first spouse. These are sometimes referred to as A/B trusts. The surviving spouse’s share of assets is held in trust “A.” The deceased spouse’s share of trust assets is held in trust “B” for the benefit of the surviving spouse, but upon the death of the surviving spouse, what remains in trust B is distributed to the stated beneficiaries, and the surviving spouse can’t change that.

In the above example, if the wife died first, her B trust would hold her half of the trust assets (worth $900,000), and, after husband’s death, what remained would go to wife’s child. That much is fine.

But if the husband was named as beneficiary of wife’s $3 million IRA, there is nothing that prevents husband from then naming only his own child (or the dreaded “much younger gold digger”) as the beneficiary of that IRA. It’s now his IRA to do as he pleases. The same is true of his $600,000 IRA. Thus, at husband’s death, wife’s child may receive only what remains in wife’s B trust, whereas husband’s child may end up with all of the A trust, and all of both IRAs (assuming the gold digger doesn’t get it all).

This is not likely what wife intended! The solution may be for each spouse to name their child as a beneficiary of at least a portion of the IRA, or to name a trust with specific terms for distribution to spouse and/or children. In both cases, however, there are tax ramifications that need to be carefully considered in consultation with your professional advisors.

Spousal consent

If you are married, Federal law governing qualified retirement plans (401ks, profit-sharing, defined benefit plans, and the like) requires you to obtain the consent of your spouse to name anyone other than your spouse as the beneficiary. This is true even if you accrued some, most, or all your retirement plan benefits prior to your marriage. Thus, if you mean for your retirement benefits to go to your kids or any other party at your death, be sure you’ve completed a beneficiary designation form, and your spouse has consented (and be sure the consent came after the marriage; a pre-nuptial agreement does not satisfy the requirement).

IRAs do not have the same federal law requirement for spousal consents. However, because California is a community property state, an IRA beneficiary designation may also need the consent of a spouse as to the spouse’s community property share of the account. Spousal consents need to be notarized.

Trust as beneficiary

A very general “rule” I often hear is that a trust should never be named as beneficiary of a retirement plan. From a purely tax standpoint, that is often true, but the tax tail doesn’t always need to wag the dog.

There may be circumstances where it makes sense to name your trust as the beneficiary of your retirement plan benefits, and if so, careful attention needs to be paid to the terms of that trust. If the beneficiary you would like to receive the retirement plan assets is not someone who should have full control over those assets–for example, a young person, someone receiving government benefits, or a spendthrift–you may want to consider naming a trust as the beneficiary of the retirement plan.

But note, a trust as a beneficiary may change the rules for how and when the assets must be distributed out of the retirement plan, and who (the trust or the individual) pays the income taxes. This requires careful planning beyond the scope of this article.

Balancing assets

For example, if your plan is to leave your retirement assets to one beneficiary and the assets in your trust to another, the amount each gets will change over time and could become very disproportionate. As you take required distributions, your retirement accounts may decrease in value. On the other hand, if you take those plan distributions and do not spend them, your other assets (i.e., your bank accounts in your trust) will increase. Thus, years down the road, your beneficiaries may receive substantially different amounts than they would have the year you made the decision on who gets what.

In addition, the retirement plan assets (unless it’s a Roth IRA) will be subject to income tax as the beneficiary receives them, whereas the assets in your living trust will not.

Be sure to consider these discrepancies when determining who receives what.

Failure to name a beneficiary

Failure to complete a beneficiary designation form for retirement plans can also create a probate—the very thing your trust was meant to avoid. Without a beneficiary designation, the recipient of your retirement plan assets will be determined by the retirement plan document, which provides for a “default” beneficiary. Often the plan will say the default beneficiary is your “estate.” This means the retirement plan assets will be subject to a probate proceeding to determine who your heirs at law are—either as spelled out in your will or by intestacy. Probate will likely take nearly a year, and it’s not cheap.

If retirement plan assets are a significant portion of your assets, you should be certain to plan for their transfer at your death as an integral part of your estate plan, and not something separate from it. You worked hard for those assets; they should benefit the people you intended to benefit.

Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.”  You can reach her at Teresa@trlawgroup.net

The pain: The number of million-dollar cities in five pricey California regions rose by 76% since the pandemic upended the economy.

The source: My trusty spreadsheet reviewed Zillow tabulations of cities with median home values in excess of $1 million as of February compared to a year ago and pre-coronavirus November 2019.

The pinch

Five of California’s costliest metro areas for housing had a combined 169 million-dollar cities this year, up 10 over 12 months – or 6%. Since 2019, million-dollar cities have grown by 73 – or a 76% increase.

Yet, cities where the typical home is worth seven figures grew even faster across the nation.

There were a total of 550 US million-dollar cities in February, up 59 in a year – or 12% growth. It’s also an increase of 332 cities since 2019 – or a 152% jump.

Think about those five California metros and their million-dollar cities …

San Francisco: 69 cities in February – unchanged in a year and up 23 vs. 2019. That’s adding 50% in five years.

Los Angeles-Orange County: 63 – up 7 in a year and up 33 vs. 2019. That’s a 110% gain in five years.

San Jose: 18 – unchanged in a year and up 8 vs. 2019. That’s 80% more over five years.

San Diego: 10 – up 3 in a year and up 5 vs. 2019. That’s double in five years.

Santa Maria-Santa Barbara: 9 – unchanged in a year and up 4 vs. 2019. That’s 80% more over five years.

Pressure points

Overall, California led the nation this year with 210 million-dollar cities – up 12 in a year. No 2019 data was available.

Note that California has 38% of the nation’s “million-dollar cities” but just 10% of the US housing supply.

Other states with very expensive housing include …

New York: 66 cities – up 12 in a year.

New Jersey: 49 – up 14 in a year.

Florida: 32 – off 2 in a year.

Massachusetts: 31 – up 4 in a year.

Colorado: 21 – unchanged in a year.

Washington: 18 – up 2 in a year.

Hawaii: 17 – up 1 in a year.

Texas: 14 – off 1 in a year.

Maryland: 10 – up 2 in a year.

The report shows 34 states in February had at least one city with typical home values above $1 million.

Quotable

“The housing market is tight with few homes available, and competition is still high for attractive homes. That competitive pressure is pushing home values higher across the U.S.,” the report said. “The typical U.S. home is worth 4.2% more than it was a year ago. In current million-dollar cities, the median year-over-year home value growth is 4.6%.”

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

By this I mean you need an owner ready to make the next deal and an occupant who’s kicked the tires and is prepared to sign. Ideally, these motivations mesh into a synchronicity that is melodious.

Southern California’s industrial real estate market is a mismatch of expectations. Owners tend to remember how things were in early 2022 when occupant demand was robust, inventory was scarce, and interest rates were affordable.

Folks who lease and buy these buildings perceive the opposite — a downturn in their business (less need for space), more addresses sitting vacant for longer, and borrowing costs that have doubled. A standoff akin to an Old West gunfight has ensued.

Fortunately, no one will be bodily harmed in said showdown. However, owners late to the fight may suffer financial losses.

Today, I’d like to discuss our biggest task as commercial real estate brokers. That is educating owners and occupants to current market conditions.

Understanding market dynamics

To grasp the current state of affairs, we need to delve into the factors shaping the industrial real estate market in Southern California.

In the recent boom, investors favored constructing large warehouses for logistics operators, who primarily lease these spaces. Initially, the demand surged as online shopping soared, prompting distributors to expand their inventory storage.

However, as the frenzy settled, warehouses across all submarkets now sit vacant, competing for tenants.

While reducing rental rates seems a logical solution, constraints like promised returns to investors or fixed cost structures complicate matters.

Challenges faced by owners

Owners are grappling with the challenge of reconciling past experiences with present realities.

Many are holding onto outdated expectations, hoping for a return to the heyday of early 2022. However, failing to acknowledge the shifts in demand, supply, and financing could lead to missed opportunities and financial losses.

Perspective of occupants

Occupants, on the other hand, are feeling the impact of changing market conditions firsthand.

With businesses adapting to new norms and uncertainties, the need for commercial space has shifted. This shift in demand has implications for leasing and purchasing decisions, as occupants navigate a landscape fraught with uncertainties.

The broker’s role in education

As brokers, our role extends beyond facilitating transactions; we are educators and advisors.

Providing owners and occupants with comprehensive market insights, backed by data and analysis, is essential for setting realistic expectations and making informed decisions. By bridging the gap in understanding, we empower our clients to navigate market shifts with confidence.

Synchronicity and moving forward

Ultimately, success in commercial real estate hinges on collaboration and adaptability. By fostering open communication and collaboration between owners and occupants, we can work towards mutually beneficial outcomes.

Embracing flexibility and adaptability allows us to navigate market shifts and seize opportunities as they arise, paving the way for continued success in an ever-changing landscape.

Education of owners and occupants is key to success in commercial real estate. By equipping buyers and sellers with the knowledge and insights needed to weather market shifts, we can bridge the gap in expectations and reach agreement.

I’ve often opined: Allow the market to be the bad guy. If I tell an owner: Here’s how it is, I’m asking that reliance’s be placed on my experience and credibility. I could be wrong. However, if we engage in a process of discovery, the market is sending the feedback.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. .