Shenandoah Valley Business Journal -Oct. 25, 2016

A Byrd Newspapers Publication

Volume 16, No. 12, October 25, 2016

Taxes Don’t Have To Be Taxing n:

o Spotlight

Taxes Page 7

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

Inside This Issue The Shenandoah Valley Business Journal is a monthly publication of Rockingham Publishing Company Inc., 231 S. Liberty St., Harrisonburg, VA 22801.

Focus Section: Taxes ■ Not Too Early To Start Preparing To File Taxes.......Page 7

Other Business News

Editorial Staff

■ East Market Shopping Area Sold For $11.3M....Page 9

Editor and General Manager: Peter S. Yates

■ Local Ledger...................................................Page 10 ■ Weigh Options For New OT Rules..................Page 11

Managing Editor: Jerry Blair

Columns

Staff Writer: Vic Bradshaw

HARRISONBURG — Michael Layman, an attorney and certified public accountant with the Layman & Nichols law firm in Harrisonburg, attended the 51st Annual Southern Federal Tax Institute Conference in Atlanta from Sept. 21 to 23.

The event’s emphasis was on employee benefits and income tax, estate and gift planning.

Layman & Nichols’ practice focuses on those and other legal areas.

— Vic Bradshaw

Sandy To Head Medical Group HARRISONBURG — Timberville native Dr. Edward A. Sandy II has been

Contact us By mail: Shenandoah Valley Business Journal P.O. Box 193 Harrisonburg, VA 22803 By email: svbjnews@dnronline.com By fax: 433-9112 By phone: 574-6279 (news) 574-6229 (ads)

On The Cover:

■ Investments by Matthew R. Frakes.................Page 3

Contributing Photographers: Nikki Fox, Daniel Lin

Layman Attends Tax Conference

■ Brown Edwards & Co. Adds Tax Director..........Page 4

Harrisonburg, Va.

Photo illustration by Nikki Fox / DN-R

■ Financial Focus by Kathy Armentrout.............Page 5

selected as president of the Sentara RMH Medical Group following a nationwide search.

Sandy, who was born at Rockingham Memorial Hospital, is a medical doctor with a master’s degree in business, according to a news release. He earned degrees from Eastern Mennonite University, Eastern Virginia Medical School in Norfolk, and the Raymond J. Sandy Harbert College of Business at Auburn University, and completed post-graduate obstetrics and gynecology studies See MOVERS, Page 4

Farmers Can Win For Charity HARRISONBURG — The America’s Farmers Grow Community program, sponsored by the Monsanto Fund, is providing Rockingham County farmers an opportunity to win a $2,500 donation to a local charity.

Farmers can go to GrowCommunities.com through Nov. 30 and enroll in the America’s Farmers Community Outreach program, according to a news release. Program rules and registration is available on the site.

The program will donate a total of $3 million to eligible local nonprofit organizations throughout rural America next year. More than $22 million has been donated to more than 8,000 nonprofit organizations since the program began in 2010, including more than $235,000 in Virginia.

The Monsanto Fund is the philanthropic arm of Monsanto Co. — Vic Bradshaw

Realtors Organize Forum HARRISONBURG — The Harrisonburg-Rockingham Association of Realtors has organized a forum for area property management professionals.

The forum’s goal, according to a news release, is to enhance professionalism and knowledge in the specialized industry among association members and distinguish them as a segment of the real estate market.

The group, open to real estate agents involved in property management, will meet quarterly to share See SCENE, Page 5

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

3

Election Cycles Mean More Than Choosing A President

W

hen people think about cycles in the stock market, they tend to look at the obvious drivers of stock prices: major forces such as the state of the economy, the level of corporate profits and conditions in global markets.

But did you know that a presidential election itself can be a key pivot point in stock price trends?

Consider the average yearly performance of the stock market. After accounting for random volatility, average presidential election year performance was slightly below overall average performance.

But look at the other years in the election cycle. The first two years of presidential terms have, on average, lagged significantly. But then, in the

third year, the market made up the lost ground and more.

Election years tend to have a degree of uncertainty over the future direction of the country, and the market may translate that uncertainly into some reluctance to commit on the part of investors. Then, after the direction is set, it may take some time for policy changes to assert any influence, further depressing investment demand.

By the third year, clarity could return and investors could embrace the future.

Power ful Exceptions Keep in mind that the amount of variation in annual returns is substantial, and is reflected in the high variability, measured by standard deviation.

Investments Matthew R. Frakes

As a consequence, the chances are good that performance in any given year could end up being far different from the average for its category.

That becomes clear when looking at the extremely good and extremely bad performing years in the S&P 500 performance data set. The four best years

were 1928 (44 percent), 1933 (53 percent), 1935 (60 percent) and 1954 (52 percent). The four worst years were 1931 (-41 percent), 1937 (-34 percent), 1974 (-26 percent), and 2008 (-37 percent).

See ELECTION, Page 10

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Tuesday, October 25, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Brown Edwards & Co. Adds Tax Director

By VIC BRADSHAW

market — featured certified public accountants with law degrees in Jim Hoover and his son, John. They helped HARRISONBURG — When Brown Ed- clients with complicated tax issues that wards & Co. clients faced legal issues could require litigation. in recent years, the accounting firm Von Schuch, also a certified public had to direct them outside its doors for accountant, will restore that tradition help. and eliminate the need to hire But with a new hire in its an external attorney in many Harrisonburg office, the Rocases. anoke-based company has a “We are happy to have a lawyer under its own roof. professional of Matt’s caliber Matthew Von Schuch, forjoin our firm,” Don Pellillo, merly a tax partner at WharBrown Edwards’ managing partner, said in a news reton Aldhizer & Weaver, began lease. “His extensive knowlworking for Brown Edwards edge in the tax area compleon Oct. 17 as a director in the ments the strengths and skills tax department. He’ll assist of our tax professional team clients of the firm’s nine officVon Schuch and will further strengthen es in Virginia, West Virginia our commitment to provide and Tennessee.

Billy Robinson, a partner in the quality service to our clients.”

Von Schuch said he’ll deal with casHarrisonburg office, said S.B. Hoover and Co. — the local firm Brown Ed- es involving disputes with the Internal wards acquired in 2008 to enter the Revenue Service or a state taxing au-

Daily News-Record

“

We are happy to have a professional of Matt’s caliber join our firm. His extensive knowledge in the tax area complements the strengths and skills of our tax professional team and will further strengthen our commitment to provide quality service to our clients.

■ Don Pellillo, managing partner at Brown Edwards

thority. His work could range from audit issues to collection actions to innocent spouse relief, in which a person seeks relief for the tax improprieties of their spouse that they were not aware of.

He’ll also enhance the firm’s estate and gift planning capabilities for high net worth clients, Robinson said.

Von Schuch also will work with individual, nonprofit and corporate clients in the areas of tax planning and compliance, mergers and acquisitions,

and business-succession planning. He’s a former trial attorney in the U.S. Department of Justice’s tax division.

A one-time football player at James Madison University, he earned a bachelor’s degree in accounting and finance from JMU in 2001 and a law degree from the University of Pittsburgh in 2003.

Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Also Chairman Of Board Of Directors Movers

FROM PAGE 2

at the Ohio State University Hospitals and Clinics in Columbus, Ohio.

He previously served as associate professor and vice chairman of community practices in the Department of Obstetrics, Gynecology and Reproductive Sciences at the University of Pittsburgh School of Medicine and Magee-Women’s Hospital of the University of Pittsburgh Medical Center.

The Sentara RMH Medical Group is a multi-specialty group of physicians and advanced-practice providers who care for patients at the Harrisonburg hospital and 23 clinics in Rockingham, Page, Shenandoah and Augusta counties.

Sandy also will be chairman of the Sentara RMH Medical Group board of directors and a member of the hospital’s senior leadership team.

— Vic Bradshaw

Harmison To Lead Committee HARRISONBURG — James Madison

University professor Robert Harmison has been elected to lead the Association for Applied Sport Psychology’s professional standards committee.

The professional standards panel reviews certifications and oversees the AASP’s continuing education, diversity and ethics efforts.

Harmison took office during the organization’s annual conference Sept. 28 to Oct. 1 in Phoenix.

He is the Kibler Professor of Sport Psychology in JMU’s graduate psychology Harmison program. Harmison teaches applied sport psychology and mental toughness courses and consults with JMU athletes and coaches.

The AASP is a 2,300-member international professional association that promotes sport and exercise psychology.

— Vic Bradshaw

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

5

Stay Away From Frightful Investment Moves

H

alloween is almost here.

When you’re passing out candy, you’ll see many “scary” costumes that will probably just make you smile. But in real life, you can easily find some things that truly are frightening — such as bad investment moves.

Here are a few that you’ll want to avoid:

Chasing ‘Hot’ Stocks Many so-called “experts” – not to mention your friends, neighbors, relatives and co-workers – are more than willing to provide you with “tips” on “hot” stocks.

But by the time you hear about these stocks, they may already be cooling off.

And, in any case, they may not have been appropriate for your needs in the first place.

Too Aggressive, Too Conservative If you constantly worry about the

value of your investment portfolio, and you lose sleep whenever the market drops sharply, you might be taking on too much risk for your own comfort — so you may need to invest somewhat less aggressively.

Conversely, if you invest primarily in conservative, low-yielding investments because you think they will help you avoid losses, you might not achieve the long-term growth potential you need to help you reach your important financial goals, such as a comfortable retirement.

When you invest, try to balance your need for growth with your personal tolerance for risk.

Failing To Diversify If you only own one type of financial asset, and a market downturn hits that asset class strongly, your portfolio will likely take a big hit. You can greatly reduce the effects of market volatil-

Financial Focus Kathy Armentrout

ity — and give yourself more chances for success – by spreading your money among a range of investments. (Keep in mind, though, that diversification can’t always guarantee profits or protect against all losses.)

items of today — or of any day — are more negative than positive. But as an investor, you don’t want to be forced into a “sky-is-falling” mentality, because such a mind-set could lead you to make rash, unwise decisions, such as selling quality investments too soon

Paying Too Much Attention To The News Unfortunately, many of the news

See FRIGHTFUL, Page 6

Park View Federal Credit Union Honored For Volunteer Service On Veterans Day Scene

FROM PAGE 2

information, discuss industry trends and best practices, and review rental-market data. HRAR also plans to offer continuing education opportunities.

— Vic Bradshaw

Park View Receives Recognition HARRISONBURG — For the second consecutive year, Park View Federal Credit Union has been recognized with the Dora Maxwell Social Responsibility Award for Virginia, according to a news release.

The award recognizes a credit union for its community service and social responsibility efforts. Winners were announced in early September and will be presented their awards in April at the annual meeting of the Virginia Credit Union League, which co-sponsors the award with the Credit Union National Association.

Park View was honored for its third annual Community Connection, held

on Veterans Day. Staff members and employees from some of the credit union’s member businesses recognized the holiday by providing 360 volunteer hours for Harrisonburg-area nonprofit organizations.

Its activities included yard and garden work, wood splitting, donation and book sorting, food preparation, cleaning, office work and building maintenance.

PVFCU’s entry is advanced to the national credit union contest.

Park View operates two branches in Harrisonburg and one each in Broadway and Dayton.

— Vic Bradshaw

Summit Completes Acquisition HARRISONBURG — Summit Financial Group (NASDAQ: SMMF) subsidiary Summit Community Bank completed its acquisition of Highland County Bankshares Inc. on Saturday, according to a news release.

Summit, based in Moorefield, W.Va., bought Highland and its subsidiary,

First and Citizens Bank. The First and Citizens offices will continue operation under that name until Dec. 5, when they’ll open as Summit Community Bank branches.

Summit Financial Group operates 15 Summit Community Bank locations in Virginia and West Virginia, including two in Harrisonburg.

from $1 million in assets then to $1.5 billion today.

Many of the companies leaders, including CEO Bill Hayter, have strong roots in agriculture.

In 2002, the bank established an Agricultural Lending Division to foster economic development and growth in the industry throughout Virginia.

— Vic Bradshaw

— Staff Reports

First Bank & Trust Awarded Honor SVP’s Harvest Box Gets Gold HARRISONBURG — First Bank & Trust Co. is the Virginia Agribusiness Council’s 2016 Agribusiness of the Year.

Lynn Graves, chairman of the council, presented the award during its annual membership meeting in Winchester on Sept. 18 and 19, according to a press release.

The award is given annually to a member “for outstanding service to the agribusiness industry and the Council,” the release says.

The Abingdon-based bank was founded in Lebanon in 1979, growing

HARRISONBURG — In an effort to convince them to visit the area, a regional economic development organization boxed up the Shenandoah Valley and sent it to a handpicked group of site selectors, the professional consultants that help companies decide where to locate new operations.

Whether that effort by the Shenandoah Valley Partnership leads to any companies locating in the area might not be known for five or 10 years. But the visits that started with the box of items from and information See SCENE, Page 6

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

Take Full Advantage Of 401(k) Plan Frightful

FROM PAGE 5

or staying out of the market altogether.

Generally, no single event has truly long-term consequences for investors.

Consider the recent “Brexit” vote – in the immediate aftermath, the markets fell sharply, but just a few weeks later, they hit all-time highs. That won’t happen with every newsworthy occurrence, but historically, the markets have shown resilience.

So stay invested and follow a smart, long-term investment strategy that’s suitable for your situation — and look beyond today’s headlines.

or similar employer-sponsored retirement plan? If not, you are underutilizing one of the best retirement savings vehicles around.

At a minimum, put in enough to earn your employer’s matching contribution, if one is offered. You won’t always have the chance to participate in this type of tax-advantaged retirement plan — so make the most of it while it’s available.

Halloween usually ends with few tricks and many treats. Steering clear of the scary investment moves described above can help you make steady progress toward your financial objectives.

Ignoring Opportunities Are you taking full advantage of all the investment opportunities available to you?

For example, are you contributing as much as you can afford to your 401(k)

Advertising gets results. call 574-6229

This article was written by Edward Jones for use by Kathy Armentrout, a financial adviser with Edward Jones at 560 Neff Ave., Suite 100, Harrisonburg; 540-574-1013

Harrisonburg, Va.

Only 23 Entries Received Gold Award Scene

FROM PAGE 5

about the region stretching from Shenandoah to Rockbridge counties already have gained the organization international recognition.

At the International Economic Development Council Annual Conference held Sept.

25 to 28 in Cleveland, the SVP received a Gold Excellence in Economic Development award for organizations representing populations of 200,000 to 500,000 for its promotional effort, dubbed “Harvest Box Save the Date.” Of 503 entries, only 23 received gold recognition, the highest level.

“You can’t promote what you don’t see,” said John Downey, chairman of the SVP’s board of directors and president of Blue Ridge Community College. “Our goal was to get some of these site consultants to see what we see in the Valley, that it’s a great place to raise a family.”

Fourteen of the 82 site selectors that received the promotional package expressed interest in visiting the Valley, and seven eventually attended the SVP’s first-ever familiarization tour in mid-September. That tour did what it was designed to do.

“We’ve heard already from a consultant who’s talking to a client about a project and is looking at the Valley in a totally different way,” said Carrie Chenery, the partnership’s executive director. “He’s recommended the client consider the Valley, and he said he never would have before the trip.”

Greg Hitchin, Waynesboro’s economic development and tourism director and chairman of the SVP’s marketing committee, said the harvest box idea grew out of a brainstorming session at the organization’s annual retreat in 2014.

The six Valley products placed in the box included culinary lavender from White Oak Lavender Farm in Cross Keys and Mama Zuma’s Revenge habanero chips from Route 11 Potato Chips in Mount Jackson.

Pertinent information about the region also was included.

The box, Hitchin said, aimed to “break through the clutter” and get the Shenandoah Valley on the radar of the chosen sight selectors.

“There’s 3,000 people trying to get their attention,” he said.

— Vic Bradshaw

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

7

Not Too Early To Start Preparing To File Taxes

By VIC BRADSHAW

Perrine, a partner with the Harrisonburg office of Newport News-based PBMares, said Oct, 16 marked the beginHARRISONBURG — The filing dead- ning of tax-planning season, when acline for 2016 income taxcountants work to make es is months away, and sure their clients are in “We like to get in front the most advantageous businesses still have two months left in the tax and be able to proactively tax bracket. year.

“We frequently run make recommendations But accountants said into people who say, ‘I instead of account on many local business wish we’d done somewhat did happen and owners can, and some thing,’” he said. “In April hope for the best already do, save money or March or February, or by having tax professionwhenever we meet with next year.” als analyze year-to-date clients, we’re historians.

— NICK PERRINE We like to get in front company financials to PARTNER AT PBMARES and be able to proactively figure out what they can do before Dec. 31 to demake recommendations crease their tax liability. instead of account on Whether large companies, family farms what did happen and hope for the best or small businesses, accountants often next year.” find ways for clients to improve their Accelerating Purchases tax situation.

In a year when revenues are up for a Taxpayers who file extensions had until Oct. 15 to submit their returns See TAXES, Page 8 to the Internal Revenue Service. Nick

Daily News-Record

Nikki Fox / DN-R

Nick Perrine, partner at PBMares, seen in his Harrisonburg office, said Oct. 16 marked the beginning of tax-planning season, when accountants work to make sure their clients are in the most advantageous tax bracket.

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

Harrisonburg, Va.

Some Assets Can Be Written Off Immediately After Purchase Under Section 179 Taxes

extender bonus depreciation, deducting half of the value of new equipment purbusiness, a common way a client can im- chases in the first year and depreciating prove his tax situation is by accelerating the remainder over time. one or more expenditures.

“We’ll typically try to maximize the Chris Montgomery, tax partner with depreciation between those two writeHarrisonburg-based Young, Nicholas, offs,” Perrine said of the Section 179 Branner & Phillips, said some assets and 50 percent bonus deductions. can be purchased and written off imMontgomery said the bonus amount mediately rather than depreciated over will remain at 50 percent through 2017 years. Known as a Section 179 deduc- but is slated to drop to 40 percent in tion, the write-off allows businesses to 2018 and 30 percent in 2019, so he’s addeduct the full cost of many assets up vising some clients to make certain to $500,000 in value. purchases this year or next to “If the business needs maximize that tax benefit. the asset and plans to Just as business ownbuy it soon,” Montgomers are advised to accelIf you have enough ery said, “we may recerate expenses when ommend that they business is good, the income and you’re buy it and expense it accountants said growing, it can save you this year and potenthey sometime adsome tax dollars. tially write off the vise clients to delay full cost.” purchases in down Chris Montgomery, The asset doesn’t years to push the need to be an item expense into the next partner at Young, Nicholas, such as a tractor or tax year.

Branner & Phillips a piece of office equipSmith said he projment, he said. Farming ects several years ahead clients sometimes benefit from when possible to determine pre-paying for some of their feed for when a purchase might be most adnext year. vantageous from a tax perspective.

When it comes to making a major “Those deductions,” he said, “might purchase to reduce income tax liabili- be worth more next year than this year.” ty, Jeff Smith, tax partner in the Harrisonburg office of Roanoke accounting Various Options For companies using accrual accountfirm Brown Edwards & Co., said owners don’t need to have the cash on hand to ing, which records revenue when earned cover the cost. An asset can be written even if payment hasn’t been received off in full even if it’s financed as long as and expenses goods and services when it’s put into service by the end of the tax those charges are incurred, Perrine said accruing compensation bonuses can be year.

Businesses also have a similar de- a way to accelerate an expense. Those duction they can use for 2016, Perrine bonuses can be expensed in one tax year said. Companies can claim a 50 percent even if they’re not paid until mid-March FROM PAGE 7

“

of the next year.

Another strategy for reducing taxable income is establishing a retirement plan or making enhanced payments into a company plan if the maximum amount hasn’t been deferred.

Smith said a 401(k) plan must be established by Dec. 31, but limits exist for how much can be contributed. For the current tax year, those plans can be started with a contribution of as much as $18,000.

Tax credits offer another way for clients to reduce their tax liability.

Perrine said Neighborhood Assistance Program credits allow donors to certain nonprofits to get a charitable tax deduction as well as a Virginia tax credit for up to 65 percent of their contribution. The same is true for the Education Improvement Scholarship Tax Credit, contributions to private schools to fund scholarships for underprivileged students.

Land owners can take advantage of preservation tax credits, he added, even selling them to other taxpayers looking to reduce their tax burden. The same can be done with state historic tax credits.

Other Considerations As part of his tax-planning process, Montgomery said he often evaluates the business structure for small companies.

Sometimes ongoing changes, such as a child transitioning into an ownership role in a family business, merit switching a company from a sole proprietor to a partnership.

“If you have enough income and you’re growing,” he said, “it can save you some tax dollars.”

For wealthier owners of family busi-

nesses, it’s important to plan for the tax implications of passing a business to the next generation.

Taxpayers, Smith said, have been able to leave a business to family members over time and realize tax benefits. However, some proposed regulations would “severely limit” an owner’s opportunity to his reduce tax liability in passing a company to the next generation.

“People might want to look at doing gifts before the end of the year,” he said.

“This might be the last opportunity for them to make those gifts and take the [business] valuation discount on it.”

For those who have an income spike because of a one-time property sale or other infrequent transaction, Perrine said proper planning can prevent the taxpayer from paying an excessive amount of tax in a single year.

Figuring out ways to improve a company’s or person’s tax situation is an information-intensive exercise, Montgomery said. It’s tough for accountants to plan unless they have good data, so the more information a client can provide, the better results they can get.

Timing also is important, because in many instances actions must be taken by Dec. 31 to be accounted for in a tax year.

“We try to keep what people pay flat,” said Montgomery. “If someone gets into a higher tax bracket, they’re paying more instead of keeping it at a flat income level.

“A lot of times people don’t think about it until late January, and sometimes they wind up paying a lot more tax than if they’d come in this time of year for tax planning.”

Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

“SELLING THE MOUNTAIN... AND THE VALLEY”

(540) 289-6335 (800) 931-0400 www.MassanuttenRealty.com View over 2000 Properties Jason Mitchell, Realtor PORCHES, ARBORS & PERGOLAS, HANDICAP RAMPS

540-820-9517

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

9

East Market Shopping Area Sold For $11.3M

By VIC BRADSHAW Daily News-Record

HARRISONBURG — A publicly held real estate investment trust headquartered in Phoenix has purchased most of a recently redeveloped and leased East Market Street parcel in an eight-figure deal, but the seller kept a one-acre street-side lot for development.

VEREIT MT Harrisonburg VA LLC paid $11.3 million for the 8.4 acres at 1835 E. Market St. that includes the Hobby Lobby and Gabe’s stores, according to a deed recorded Oct. 3 at the Rockingham County Courthouse. The deal closed on Sept. 19.

API Harrisonburg Inc., a subsidiary of Charlotte, N.C.-based Aston Properties, sold the land. However, it kept a one-acre lot directly across Market Street from Jess’ Lunch No. 2.

George Dewey IV, Aston’s president and CEO, wrote in an email Oct. 17 that the company is “working with a single-tenant user” for the one-acre parcel but would disclose nothing further at this time.

Aston bought four parcels at the site from two different owners in February 2015 for a total of $5.5 million. Another $2.15 million was spent to renovate the former Kmart building on the property for use by national craft retailer Hobby Lobby and regional discount retailer Gabe’s.

Park Chapman, a spokesman representing real estate investment trust Cole Capital, said that company technically owns the Hobby Lobby and Gabe’s property through Cole Credit Property

Daniel Lin / DN-R

The property that houses Gabe’s and Hobby Lobby was sold by Aston Properties to VEREIT MT Harrisonburg VA LLC for $11.3 million.

Trust IV Inc. Cole Capital is a subsidiary of VEREIT Inc. (NYSE: VER).

Chapman said he could provide no more information about Cole’s purchase of the local property, including whether there is enough room on its property to build for another tenant.

Cole Capital is VEREIT’s investment-management arm, according to information on Cole’s website.

VEREIT, according to multiple online reports, previously was known as American Realty Capital Properties Inc. That company was rocked by an

accounting scandal in late 2014 that resulted in the departure of the company’s board chairman, CEO and chief financial officer.

Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

RE/MAX PERFORMANCE REALTY Outstanding Agents, Outstanding Results for over 24 years

Advertising gets results. call 574-6229

2511 E Market St, Suite A • Harrisonburg, VA 22801 Phone: 540.433.7369 • 800.296.7369

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 25, 2016

Local Ledger

Timing The Market Often Loser’s Game Election

FROM PAGE 3

Central Valley Area Home Sales

No two of the extreme up years occurred at the same point in an election cycle, neither did any two of the extreme down years. Three of the extreme years are associated with Democratic incumbents and five with Republican incumbents.

Ultimately, six of the eight extreme performance years were associated with unpredictable macroeconomic tidal waves — the Great Depression, the oil price shock (when energy prices quadrupled in a few months), and the recent financial crisis — events much bigger than any election news.

So if you are thinking of cashing in on an election year rally — or selling before an election year rout — think again. As history has shown, trying to time the market — for whatever reason — is often a loser’s game.

Instead, work with your financial adviser to determine an appropriate longterm asset allocation that suits your goals and needs.

Median Price Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

Article written by Wealth Management Systems Inc. and MSSB, courtesy of Matthew R. Frakes, Harrisonburg financial adviser.

Contact Frakes at 540-438-7909, or online http://www.morganstanleyfa.com/thefrakesgroup.

Advertising gets results. call 574-6229

Harrisonburg, Va.

Sept. 2016

Sept. 2015

Pct. Change

$160,000 $221,200 $180,000 $170,000 $184,500 $144,000 $124,900

$164,500 $187,000 $42,500 $149,000 $200,000 $136,000 $136,000

-2.74% 18.29% 26.32% 14.09% -7.75% 5.88% -8.16%

Days On Market Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

Sept. 2016

Sept. 2015

Pct. Change

45 62 124 217 42 56 42

56 47 188 125 71 93 47

-19.64% 31.91% -34.04% 73.60% -40.85% -39.78% -10.64%

Units Sold Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

Sept. 2016

Sept. 2015

Pct. Change

37 86 59 13 76 27 35

28 69 51 15 69 35 35

32.14% 24.64% 15.69% 13.33% 10.14% -22.86% 0%

Unemployment August 2016

July 2016

August 2015

5.2% 3.6% 3.6% 4.5% 3.6% 3.9% 4.1%

5.5% 3.7% 3.6% 4.5% 3.5% 4.0% 4.1%

5.3% 4.1% 4.0% 5.9% 3.9% 4.1% 4.5%

Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

Source: Virginia Employment Commission

Labor Force August 2016

July 2016

August 2015

23,082 38,714 21,339 11,499 35,789 11,607 9,704

23,459 39,324 21,518 11,620 36,278 11,775 9,834

23,305 39,347 21,569 11,870 36,694 11,878 9,498

Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

Source: Virginia Employment Commission

Building Permits* August 2016

Sources: Funkhouser Real Estate Group; Real Estate Business Intelligence

Retail Sales (in millions) Harrisonburg Rockingham Shenandoah Page Augusta Staunton Waynesboro

July 2016

$1.03 $.56 $.39 $.19 $.43 $.33 $.44

Source: Weldon Cooper Center for Economic and Policy Studies

Harrisonburg Rockingham Page Augusta

August 2015

Permits Issued

Estimated Cost

Permits Issued

Estimated Cost

9 28 10 22

$1.03M $6.47M $1.77M $3.77M

3 19 3 13

$643,267 $3.80M $356,389 $2.94M

Source: censtats.census.gov/bldg/bldgprmt.shtml *Permits are for residential construction only, single- and multifamily buildings, as recorded by the U.S. Census Bureau.

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Tuesday, October 25, 2016

11

Weigh Options For New Overtime Rules

By VIC BRADSHAW Daily News-Record

side sales professionals, are exempt.

Exemptions, though, aren’t the norm.

“This,” Welsh said, “is a game-changer.”

HARRISONBURG — Mike Rhodes hoped he wouldn’t have to deal with Ways To Comply new federal overtime regulations, at Welsh said 21 states — but not Virleast not right away. ginia — are challenging the Labor DeBut with the prospect of delayed ac- partment’s authority to impose and ention narrowing and a Dec. 1 deadline force the changes. They’ve filed suit in looming, he headed to the communi- a Texas court to stop them; if it can’t ty room at Eagle Carpet Oct. 17 for a be decided by Dec. 1, they’ve asked for primer on how the new rules will affect a temporary injunction to delay implehis business and came away convinced mentation. some of his employees won’t be on salaBut the attorney said it’s looking ry in about six weeks. less and less likely that the challenge “It was more or less what I thought will succeed, so business owners should I’d have to do, switching some people plan to be in compliance as of Dec. 1. to hourly,” said Rhodes, co-owner of InAmong the industries expected to be surance Center of Harrisonburg. hit hardest are hospitality and tourRhodes was among 20 local busiism, retail, health, higher education, ness professionals who turned technology and nonprofits. out for “Overtime, Over Welsh said she knows Wine,” a discussion of the a retail store manager overtime changes sponwho probably makes This is a sored by the Harriabout $36,000 a year sonburg-Rockingham for whom the new law game-changer.

Chamber of Commeans a big raise. merce. It was led by Because she works Cathy Welsh, Cathy Welsh, an emabout 60 hours a employment law ployment law attorweek, her company attorney ney with the Harrisonwill give her a raise of with Lenhart Pettit burg office of Lenhart nearly $12,000 instead Pettit. of switching her to hourly It was the second semipay. nar on the changes the chamber Deciding how to comply rehas held. Welsh said about 50 people quires some analysis. turned out for the initial primer last Welsh said employees earning slightmonth. ly less than the new salary threshold, The U.S. Department of Labor’s reg- those receiving substantial non-discreulation changes represent an update tionary bonuses or commissions and to the Fair Labor Standards Act, with those working in positions requiring the minimum salary an employee can significant and/or uncontrollable overbe paid before qualifying for overtime time work are prime candidates to keep the most dramatic change businesses exempt. To accomplish that, their salaare addressing. ry would need to be raised.

The standard set in 2004 of $455 a Among those who might require reweek, or $23,660 a year, is to be raised classification from salary to hourly pay to $913 a week, or $47,476 a year, and are employees earning well below the adjusted every three years. That means new level, those for whom an increase most employees making less than the to the new level would cause significant latter amount are entitled to overtime salary compression with higher-level pay, which is time-and-a-half, for any employees, those who work little overhours worked over 40 in a week. time and those who work consistent or Monthly or quarterly bonuses, Welsh predictable overtime. said, can be counted for up to $4,747.60 Employees, Welsh said, can be kept of the annual salary. at a salary below the new threshold, She said certain professions, such as but they must be paid overtime if they physicians, lawyers, teachers and out- work more than 40 hours.

“

Cathy Welsh, an attorney at Lenhart Pettit, leads “Overtime, Over Wine,” a program about new overtime regulations that come into effect Dec. 1.

Daniel Lin / DN-R

Some employers are getting creative with their new pay scales, she said, calculating an employee’s typical overtime worked and setting his hourly wage at a rate so that his pay remains fairly stable. Regardless, she’s advising clients to build extra money for wages into their budgets.

Salaried employees moving to hourly pay, Rhodes said, will need to mentally adjust to the change.

“Your good employees don’t like to clock in and out,” he said. “It’s kind of a slap in the face.”

The quandary some employers are facing, Welsh said, is how to handle certain changes. Overtime costs could break budgets if not managed, but companies still need trained people to perform the work that must be done.

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“People aren’t fungible,” Welsh said.

“Skill sets are not fungible. Experience is not fungible.”

Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

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Tuesday, October 25, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.