Survey: managers have mixed feelings about synthetic leases.Real estate managers at large corporations are divided as to whether or not they will convert synthetic leases Synthetic Lease An operating lease that is structured in a way so that it is not recorded as a liability on the balance sheet. Instead, it is considered to be an expense on the income statement. onto their company's balance sheets prior to the June June: see month. 15 deadline set by the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). . In a recent survey conducted by CoreNet Global, roughly half the respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. (44%) indicated that they would convert their synthetic leases, while the other half (44%) said they would not. When asked to state their reasons, the respondents who did not plan to convert the synthetic leases reported that: they believe synthetic leases only need to be disclosed, not converted (30%); the FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. do not apply to their specific situation (30%); and they were still analyzing the rules (40%). In addition, the survey measured corporate real estate executives' attitudes about growth in the coming quarter. As they have indicated in previous surveys, corporate real estate executives plan to hold the line on expansion. Only 16% plan an increase in the amount of office space occupied, and 11% plan an increase in the amount of industrial space occupied. The remainder of the respondents either plan no changes or decreases in occupancy. The survey was administered from Jan. 29 through Feb. 13 and was distributed to 1000 corporate real estate executives and assets managers at large corporations. It yielded 85 responses. Thirty-six respondents have a portfolio between 1.5 million and 10 million SF; 21% had a portfolio of between 10 million and 30 million SF; and 40% had a portfolio of greater than 40 million SF |
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