Day: March 17, 2023

OTO Announces Nine Staff Additions, Promotions

By
Daily News

SPRINGFIELD — O’Reilly, Talbot & Okun (OTO) recently announced nine staff additions and promotions: Jonathan Hermanson, Lori McCarthy, Caren Irgang, Lily Elkhay, Kaitlyn Sistare, Pierre Carriere, Elise Zalenski, Toby Simmons, and Christine Arruda.

Hermanson earned his bachelor’s degree in chemistry and environmental science. Before moving to Massachusetts, he worked in environmental consulting for five years in Kansas City. As an environmental scientist at OTO, he helps the team with Massachusetts Contingency Plan work and risk characterization, as well as environmental compliance. He also assists the asbestos and industrial hygiene team. Some of his latest achievements while at OTO are becoming a radon measurement professional and a certified hazardous materials manager.

McCarthy earned her bachelor’s degree in biochemistry. This degree taught her how releases of hazardous chemicals to the environment can have negative health effects to humans and animals nearby. She then went on to study a second degree in environmental sciences. With more than 20 years of experience in her field, she has worked on sites across New England, finding solutions to remediate the releases of oil and hazardous materials. At OTO, McCarthy was most recently promoted to associate and is the team leader for the environmental sector.

Irgang earned her bachelor’s degree in civil engineering at Rensselaer Polytechnic Institute and then went on to earn her master’s degree in civil engineering at Manhattan College. Irgang has experience in structural engineering from building and bridge engineering in New York City and performing construction inspections. Joining OTO as a Level II engineer, Irgang is performing geotechnical investigations and design and field oversight. She continues to utilize her structural engineering skills and provides an added perspective to our geotechnical projects.

Elkhay is earning her bachelor’s degree in marketing at UMass Amherst and brings her experience from her previous internship. As the marketing intern, Elkhay has posted on OTO’s social-media pages, created ads, and performed any other as needed marketing tasks.

Sistare is a 2022 graduate from Western New England University (WNE), earning her bachelor’s degree in civil engineering with an environmental engineering concentration. At WNE, she and her team’s senior project placed first in the civil engineering department. She primarily works with the geotechnical group at OTO as a Level I engineer, but also assists the environment group.

Carriere graduated from WNE in 2022 with a bachelor’s degree in civil engineering. During his studies, he gained experience in many areas, including surveying, technical writing, CAD, soil and materials testing, and collaboration skills. Joining OTO as a Level I engineer, he has become heavily involved in field work and working on site, as well as working on proposals, reports, and site plans in the office.

Zalenski earned her MBA in 2010 and has spent the last nine years developing her skills in office management, HR, IT, and bookkeeping. She has worked in residential and light commercial water treatment, which provided experience in site evaluations, water testing, treatment design, and reviewing EPA, DEP, and local board of health regulations and practices. As OTO’s office manager and executive assistant, she will be managing the day-to-day needs of the staff that may arise in the areas of IT, telephones, general building or parking issues, and scheduling events and vacations, along with providing support for OTO’s president, Ashley Sullivan.

Simmons has brought her 20 years of field-technician experience to OTO. As an environmental technician, she has taken on many field duties to make sure the job is done safely and efficiently.

Arruda has been with OTO for more than 25 years and has been part of the internal leadership transition taking place since 2020. As a result, she was promoted to associate this past year and serves on the company’s operations committee. With more than 20 years of experience as a both a certified indoor environmental consultant and Environmental Protection Agency-accredited and Massachusetts-licensed asbestos inspector, she manages and works on numerous types of indoor environmental issues, including asbestos, radon, HVAC, chemicals, and microbial contamination. She also is an National Radon Proficiency Program-certified radon-measurement professional who can perform single, multi-family, large-building, school-building, and water-radon-measurement services.

Notch Mechanical Constructors Announces Changes to Management Structure

By
Daily News

CHICOPEE — Notch Mechanical Constructors announced the promotion of two employees to newly created executive positions.

Nick DePalma has been promoted to executive vice president. In this role, he will have overall responsibility for operations, quality, safety, and customer-base growth in alignment with the company core values. This promotion will allow Steven Neveu, president of the company, to focus more on the long-term strategic growth and vision for the company.

In addition, Nick Bernasconi has been promoted to vice president of estimating and project management. He will oversee all activities and initiatives related to the company’s accounts management, estimating, and project management.

Previously a family-owned business for 48 years, Notch transitioned to an employee-owned ESOP company in 2020. These new roles will be critical to breaking through to the next level as an organization and ensuring a strong leadership team into the future.

bankESB to Host Two Free Shred Days

By
Daily News

EASTHAMPTON — bankESB invites customers and members of the community to two free shred days at local offices. The events will be held from 9 to 11 a.m. on the following dates and locations: Saturday, April 15, bankESB, 241 Northampton St., Easthampton; and Saturday, May 13, Home Depot parking lot, 350 Russell St., Hadley. No appointment is necessary.

Local residents can reduce their risk of identity theft by bringing old mail, receipts, statements or bills, canceled checks, pay stubs, medical records, or any other unwanted paper documents containing personal or confidential information and shredding them safely and securely for free. Valley Green Shredding, a professional document-destruction company, will be on site and can accept up to two boxes of documents per person.

UMassFive Collecting Personal-care Items for Local Survival Centers

By
Daily News

HADLEY — During the month of March, the Hadley, Northampton, and Springfield Mercy Medical Center branches of UMassFive College Federal Credit Union are holding a personal-care-items drive to benefit the pantries of the Amherst Survival Center, the Northampton Survival Center, and the Gray House. Items collected will be provided, for free, to neighbors in need.

“We know that many families face tough budgetary choices between the basic need for food and affording basic personal-care necessities,” said Cait Murray, Community Outreach manager at UMassFive. “Our goal in supporting the personal-care pantries of these organizations is to help ensure our neighbors don’t have to make those impossible choices.”

UMassFive welcomes the community to drop off donations of unopened shampoo and conditioner, shaving supplies, deodorant, toothpaste, toothbrushes, toilet paper, baby diapers, menstrual products, bed and bladder pads, and adult incontinence briefs through March 31. Items can be full-, travel-, or complimentary-hospitality-sized, and may be dropped off at 200 Westgate Center Dr., Hadley; 225 King St., Northampton; or 233 Carew St. (Rehabilitation Building Room 110), Springfield.

Chase Bank Continues Ambitious Growth Plan in Springfield

By
Oumkar Tobaran
Banking and Financial Services

Branching Out

Oumkar Tobaran

Oumkar Tobaran says the human element is critical in banking even amid the rise of online and mobile tools.

At a time when a bank’s customers can conduct business from anywhere with a few clicks, dramatic branch expansion may seem outdated.

But it’s not, Ali Zaidi said, explaining why Chase Bank is looking to double its presence in Massachusetts over the next several years, starting with the opening of a downtown Springfield office on March 7.

“When you think about the important life events that customers go through, whether it be retirement planning, buying a house, or the birth of a child, people still have an appreciation for that face-to-face conversation. That makes an impact,” said Zaidi, Chase’s market director for Western and Central Mass. “And about 75% of our customers that have balances with us still come to the branches. So, clearly, the customers are telling us they would love to have that face-to-face interaction, especially with complex life events.”

Oumkar Tobaran, branch manager for the new location in Harrison Place — which has a long history of housing banks, including Third National Bank and, in recent decades, Bank of Western Massachusetts and People’s United Bank — said the human element is critical.

“With all the technology and innovation we have, think of the amount of things that we can go on our phones to do on a daily basis,” he told BusinessWest. “But the minute something doesn’t go right or the minute you need support or additional advice on something, we want to show that customer service matters, with a physical presence.”

The branch is Chase’s 38th in Massachusetts since opening its first Bay State location in Boston in 2018 — an impressive growth trajectory, and a number the institution is looking to double by 2025, including a location to open this spring in the former Silverscape Designs building on King Street in Northampton.

“This is a central point,” Zaidi said of downtown Springfield, noting that Chase has an office a few miles down I-91 in Enfield, but this is technically the first in Western Mass. “There’s definitely a rich history here on Main Street and its local businesses, as well as larger clienteles with MGM and the Hall of Fame. We’re serving clients of different demographics, and I’m very excited that we were able to secure this spot on Main Street.”

Tobaran said he expects plenty of foot traffic downtown, as well as visits from customers who may have been banking in Enfield or branches to the west, while Chase has been conducting outreach to build a larger base of business in the region.

“About 75% of our customers that have balances with us still come to the branches. So, clearly, the customers are telling us they would love to have that face-to-face interaction, especially with complex life events.”

“We wanted to make sure that we have a convenient place for them to visit because it’s important to be able to interact with the community,” he added. “There’s a lot of development happening in Springfield, and we wanted to be part of that momentum as well.”

Zaidi agreed. “Springfield is a key cog that gives us an entry point into expanding into Western Massachusetts and brings convenience to our customers. Springfield is being revitalized, and I feel we can be an integral part of that.”

He also feels there’s an opportunity to add customers who might already be familiar with Chase through its mortgage products and credit cards. “That’s what people know. So one of our consumer-banking priorities is to be a bank for all and make it easy for people to do business with us. And technology-wise, where customers were able to bank with us remotely, this now gives them a physical location to meet their diverse needs.”

Ali Zaidi

Ali Zaidi says downtown Springfield is the first Chase branch in Western Mass. and the springboard to an eventual doubling of the bank’s branches in Massachusetts.

As he showed off the space at 1391 Main St., from the tellers and ITM machines up front to the various offices further back, Zaidi said the new Springfield branch can do all of that.

“We will help our customers with any needs, and we have more licensed specialist bankers to navigate those complex life events — retirement, financial planning, or just navigating your credit-history trajectory if you’re looking to purchase something down the road. We’re so excited to be providing that face-to-face value, and we’re looking forward to continuing the expansion.”

 

Set Up to Help

This first Western Mass. branch is about 3,000 square feet in size and features a modern, bright design with plenty of natural light, quiet meeting areas, and state-of-the-art banking technology, including those ITMs, which allow a higher withdrawal limit than traditional ATMs, as well as access to Chase professionals.

“For customers who have commercial or small-business banking needs, we have our team of experts, partners who will be working out of here and supporting other branches to connect customers. So it’s a one-stop shop.”

A dedicated Chase Private Client team provides premium banking services, personalized attention, and access to the expertise and investment capabilities of J.P. Morgan to help families reach their goals. Customers may also meet with financial and home-lending advisors and business-banking relationship managers.

“Our retail banking operations are here, and we have our licensed bankers to deal with client management,” Zaidi explained, “and for customers who have commercial or small-business banking needs, we have our team of experts, partners who will be working out of here and supporting other branches to connect customers. So it’s a one-stop shop.”

Tobaran said the open layout will help customers easily navigate what they need. “We will have associates in the lobby greeting clients, interacting with them. And then, depending on the transactions they’ll need to leverage, we can go back here and figure out what we need to help them with,” he explained, gesturing away from the front door toward the offices in back.

“But we equip a lot of our associates with tablets,” he added. “So in addition to helping them back there, however we can help support them face to face, sitting down in the lobby area, we will do that with the resources and tools we have.”

Besides banking business, Chase also wants to connect with Greater Springfield in other ways, Zaidi said, through financial-literacy programs and other types of community outreach.

“The idea is to have our branches be community anchors. So when we think about financial-literacy conversations, be it with young professionals or small-business owners, we want to host workshops and assistance in that space as well,” he explained, noting that Chase is working on several community-development efforts around financial literacy, including a partnership with Western New England University. “So this would serve as an anchor for us where we could do before- or after-hours seminars and events. It makes sense.”

Harrison Place

Harrison Place has been home to several banks in the past, from Third National Bank to the Bank of Western Massachusetts and People’s United Bank.

Tobaran added that the bank’s employees also reflect its region, as the branch hired locally, including people who hail from the Latino and Vietnamese communities, among others.

“We want some familiar faces to be representing Chase, saying, ‘hey, these are the resources we have to help you accomplish your goal.’ It was important for us to get local talent, people who had ties to the community, people who are passionate about giving back and who genuinely want to see Springfield succeed.”

 

Only the Beginning

Zaidi and Tobaran know Chase is making an ambitious surge into a region some have called overbanked, and where community banks have long dominated. But they say Chase is committed to local residents and organizations in much the same way locally headquartered banks are, while also bringing vast financial resources to the table.

“When you think about Chase, we have the resources of a large global corporation,” Zaidi said. “And our vision is, how do we take those resources and localize the solutions for our customers? Our technology and data analysis help us strategize and take a more targeted approach, because all the branches are going to operate differently based on the community-specific needs.”

One example is a partnership with Habitat for Humanity, one of the organizations that will be on hand on March 15 for the branch’s official grand-opening festivities.

“That’s one way Oumkar and his team have been making an impact in the community already,” Zaidi said. “We feel that we can be a valued contributor in that space among all the other banks. The competitive edge that we have is not only through our resources, but with the community aspect that we are trying to drive here.”

New Accounting Standards Impact Business Leases for 2022

By Contributor
Banking and Financial Services

Details, Details

By Matthew Nash, CPA

 

The implementation of the Financial Accounting Standards Board’s (FASB) new lease accounting standard, ASC 842, presents a major challenge for companies that produce financial statements under Generally Accepted Accounting Principles (GAAP).

Matthew Nash

Matthew Nash

After almost seven years since the release of Accounting Standards Update (ASU) 2016-02 in February 2016, these organizations must now work toward implementing ASC 842 for the 2022 fiscal year. This article will provide an overview of the key changes that need to be made in order to ensure compliance with the new lease-accounting standard.

 

What Is ASC 842?

This standard intends to provide visibility on a company’s capital needs and obligations, improve consistency in financial-statement presentation, provide enhanced disclosures to the readers of the financial statements, and improve the comparability of lease practices across entities and industries.

Under the new standard, lessees are required to account operating leases with terms longer than 12 months on the balance sheet, resulting in the recognition of a right-of-use asset and the corresponding liability. Under the previous standard, ASC 840, the only leases that were required to be accounted for on the balance sheet were capital leases, which are now referred to as finance leases under ASC 842. Prior to ASC 842, operating leases required disclosure only in the notes to the financial statements.

Lessor accounting practices remain largely unchanged from ASC 840 to 842.

 

What Qualifies as a Lease Under ASC 842?

To better understand the new lease standard, you must first understand the definition of a lease. A lease is defined as the contract, or part of a contract, that conveys the right to control the use of an identified property, plant, or equipment for a period of time in exchange for consideration.

To simplify this definition, a lease is a physical asset that a company has the right to direct the use of for economic benefit. The most common examples of leases are office space, machinery, vehicles, equipment, and land.

 

What Steps Should Companies Take to Prepare?

To prepare for adoption of this standard, companies first need to account for all their existing leases and thoroughly review the contracts to determine whether they include an operating or a finance lease.

 

Do You Have an Operating Lease or Finance Lease?

If the lease meets any of the following criteria, it will be classified as a finance lease:

• Does the lease transfer ownership at the end of the lease term?

• Does the lease grant the lessee a right-to-purchase option that is lessee is reasonably certain to exercise?

• Is the lease term for the major part of the economic life of the underlying asset?

• Does the present value of the sum of lease payment and any residual value guaranteed by the lessee not reflected in the lease payments equal or exceed substantially all of the underlying asset’s fair value?

• Finally, is the underlying asset of such a specialized nature that it is not expected to have an alternative use to the lessor at the lease term end?

If the answer to all five of those questions is no, then the lease qualifies as an operating lease.

 

Lease Details

After concluding the lease type, it is time to dig into the lease details:

• When does the lease start?

• When does the lease end?

• Are there early termination or renewal options?

• Are there variable expenses related to the lease?

• What is the monthly cost of the lease?

The answer to all these questions is integral to the calculation of the asset and liability to be included in the financial statements. Once the total future lease obligation has been calculated, the obligation will be presently valued using one of three discount rate options. The newly recognized right-of-use asset and liability will then be amortized over the life of the lease, based on the lease type.

For income-statement purposes, operating leases will continue to be classified as lease expense, and finance leases will be split between amortization expense and interest expense.

 

Transition Methods

As part of the initial adoption of the new lease standard, there are certain practical expedients that can be adopted to help make the transition easier. Companies are not required to assess existing lease classifications. Existing operating leases with terms extending beyond 12 months will be included on the balance sheet effective Jan. 1, 2022, the date of required adoption. Existing capital leases will continue to be included with property, plant, and equipment, and will be amortized over the remaining life of the lease.

 

Financial-statement Disclosure Impacts

Aside from the impact on the balance sheet, the standard will also provide enhanced disclosures in the notes to the financial statements. The required disclosure will include qualitative and quantitative disclosures, including descriptions of the existing leases, disclosure of lease expenses as included in the income statement, cash paid for leases during the current year, new right-of-use assets obtained through operating and finance leases, weighted average of discount rate used to present value the lease obligation, and the maturity analysis disclosing the future obligations to be paid.

 

In Conclusion

The new lease standard is expected to have the biggest impact on those companies with a large volume of real-estate leases that have previously been required to be disclosed only in the footnotes to the financial statements. The overall expectation is that most companies with leases will see some impact related to the adoption of the new standard. Because the new standard has a balance-sheet impact, it is recommended that all companies review any financial covenants and proactively work with financial institutions to consider whether amendments to covenants may be required.

There are many intricacies within the new lease standard, and it will be a learning process for all of those involved in preparing their company’s financial statements. The best thing a company can do is take the time to make sure that they fully understand how each lease is written, and to have an open dialogue with their CPA.

 

Matthew Nash, CPA is a senior manager at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; (413) 536-8510.

 

It Pays to Have a Healthy Dose of Skepticism

By Contributor
Wealth Management

ESG Investing

By Josh Bedell, CFP, CIMA and Sylvia Callan, CFA

 

As with any new investment trend, a rise in popularity can give way to bad actors.

ESG (environmental, social, and governance) investing is not immune. Recent articles from the Economist, Barron’s, and the Wall Street Journal focus on the rise of ESG investing, and the perhaps predictable attempt by some to capitalize on this trend in a disingenuous and unscrupulous manner.

However, they leave investors who are socially conscious without a way forward in seeking to decipher the good from the bad.

The need couldn’t be more pressing, with ESG investing slated to rival traditional forms of investing in the next several years. With this potential surge in demand, concerns have arisen about how seriously the ESG criteria are being considered.

“Some mutual funds and portfolio managers have taken to slapping an ESG title on a fund or portfolio without doing much of anything to truly incorporate ESG factors into the investment process. This practice of attempting to woo well-intentioned investors, while not actually striving for change, has even earned a sardonic title: ‘greenwashing.’”

Indeed, some mutual funds and portfolio managers have taken to slapping an ESG title on a fund or portfolio without doing much of anything to truly incorporate ESG factors into the investment process. This practice of attempting to woo well-intentioned investors, while not actually striving for change, has even earned a sardonic title: ‘greenwashing.’

Josh Bedell

Josh Bedell

Sylvia Callan

Sylvia Callan

The good news is that the SEC has taken notice, and has proposed some rules that would create consistent standards and disclosure requirements. In addition, the Principles for Responsible Investing (PRI), a globally recognized institution for sustainable investing, tracks the development of regulatory policies in sustainable finance that support ESG investment principles. Over the past year alone, the PRI identified more than 200 new or revised policy instruments that support, encourage, or require investors to consider long-term value drivers in ESG — the main elements of socially responsible investing.

Understanding the evolving landscape in ESG can feel like a daunting task, especially if you have many other things on your plate, like a job, family, and normal day-to-day responsibilities. The good news is, there are some relatively easy steps investors can take to ensure their portfolio aligns with their values.

For starters, mutual-fund families that focus exclusively on ESG and/or socially responsible investment (SRI) funds are more likely to utilize stringent criteria than a traditional fund family that has added one or two ESG funds in recent years. Further, actively managed funds, which incorporate at least some degree of qualitative analysis, tend to evaluate companies more thoroughly than index funds, which simply track a list of ‘approved’ holdings from a third party, though there are exceptions.

Investors without the time or inclination to do this research on their own can turn to a trusted asset manager who takes ESG investing seriously. Dedicated ESG portfolio managers do extensive work in the field, often talking to mutual-fund managers directly, visiting corporate offices, analyzing lists of underlying holdings, and obtaining advanced credentials related to ESG investing.

Ultimately, it pays to have a healthy dose of skepticism. It certainly helped our firm when we decided to offer an ESG strategy for our clients. It required an added layer of scrutiny to ensure that ESG investment principles were clearly defined, closely monitored, and reported in a timely manner.

It could be an encouraging sign that increasing numbers of investors are seeking to effect positive change while also generating competitive — or possibly even superior — returns. A shift of this magnitude is bound to encounter some hiccups along the way.

Far from a reason to abandon the initiative altogether, greenwashing concerns offer an opportunity to further investor engagement, advance regulatory reform, and promote endeavors to improve ESG reporting and investing standards with the potential to benefit us all.

 

Josh Bedell is a financial planner and investment advisor, and Sylvia Callan is a portfolio manager, for Gage-Wiley. Callan has earned the CFA Institute certificate in ESG investing and leads the firm’s ESG efforts. Securities offered through St. Germain Securities Inc., a FINRA member. Gage Wiley is a d/b/a of St. Germain Securities Inc.

Using History as Our Guide

By Contributor
Wealth Management

It Shows That Our Pain May Be Followed by Some Gains

By Jeff Liguori

 

According to Google searches, the popularity of the term ‘inflation’ hit its highest peak in at least five years during the second week of August of last year.

Jeff Liguori

Jeff Liguori

For the sake of comparison, the term ‘stock market’ is one of the more popular Google searches. On average, ‘stock market’ is three times more popular than ‘inflation.’ For further comparison, the search for ‘Lebron James’ is regularly much higher than ‘inflation,’ but still not quite as popular as ‘stock market’ on average. Yet, in August of last year, ‘inflation’ bested both terms, by a wide margin.

Higher consumer prices are causing anxiety. The Federal Reserve, with its dual mandate of full employment and low inflation, has been working to ease prices through higher interest rates, which led to weak performance in both stock and bond markets in 2022 — a rare phenomenon when both markets sell off in tandem.

When the Fed raises the federal funds rate, an interest rate that banks charge to one another for overnight lending, it has a ripple effect, putting upward pressure on all interest rates, from mortgages to treasury bills. In turn, all assets get ‘repriced’; stock prices adjust lower (usually) because higher rates often mean profit margins for those businesses shrink, which equates to a lower valuation for that company’s stock price. The repricing of assets has wide-ranging implications and is often disruptive to an economy.

Is the Fed acting appropriately? Wall Street, with no lack of varying opinions, either believes the Fed has overstepped by tightening too quickly and too late, or the Fed should be more aggressive in the next two sessions and then be done. Finding an economist or strategist that thinks Jerome Powell and his crew are precisely doing the right thing is nearly impossible.

Instead of opining on the Fed’s actions — I’m not an economist, more of an ‘investment historian’ — let’s put the discussion in the context of past cycles of rising inflation and what it might mean for investors.

From January 1966 to August 1969, the federal funds rate more than doubled from 4.5% to 10.25%, in what was then seen as aggressive action by the Fed to tame inflation. In August 1969, the Fed reversed course, cutting interest rates as the economy slowed and the country faced increasing job losses. To safeguard the economy, the Fed quickly went from raising to easing interest rates, moving the effective rate back to about 5% in March 1971, as unemployment started to tick up.

But the story doesn’t end there. Inflation was persistent even with a slowing economy because of a burgeoning energy crisis. Once again, the Fed moved to a tightening stance, this time increasing interest rates by more than 300% from the spring of 1971 to the summer of 1973. Interest rates skyrocketed, and stocks suffered badly, declining by more than 40% in the 14 months following the start of that new tightening cycle, before bottoming in October 1974.

Interestingly, interest rates remained historically elevated throughout the 1980s, but stocks managed to do quite well. From the low in October 1974, the S&P 500 had an impressive run until the tech meltdown in 2001, appreciating 460% into late 2000. The data is compelling.

Following the Fed pause in 1974, in 21 of the subsequent 28 years leading up to the tech bubble, stocks generated a positive annual return. The worst year was 1977, when the S&P was down 11.5%, and the best year was 1995, when the S&P 500 generated a positive 34% return. There were eight years in that three-decade stretch when stocks increased by more than 25%.

To put things in perspective: the federal funds rate increased from 2.25% to a peak of 14.3% from February 1971 to July 1974, a total increase of about 230%, a slow and steady move higher in that 40-month period. Beginning in March of last year, the Fed raised rates from a historic low of 0.08% to 4.75%. That may seem milder as the overall level of interest rates is still historically low, but consider the Fed took this action in 11 months, increasing rates by more than 5,000%.

Overall, 2022 was unprecedented, both in the dramatic measures by the Fed and the performance of financial markets. Bond and stock markets haven’t generated a negative return in the same calendar year in almost 60 years. And there has only been one other year since 1960 when bonds had a decline in value of more than 10%, in 2009; however, the stock market appreciated almost 26% that year as the country emerged from the 2008 Great Recession.

So, what if the Fed — irrespective of Wall Street opinions — is doing exactly what needs to be done? And what if the economy avoids a recession? And what if stock and bond prices have already adjusted for a recession that doesn’t materialize (or is mild)? If history is our guide, financial markets can produce healthy returns even in inflationary periods, after some initial pain.

The answer may be as simple as to ignore consensus. Be a contrarian. The pain to our portfolios over the past 18 months may be the first step to higher returns in the near future.

 

Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.

BBB Reports on Most Common Types of Scams to Avoid

By
Wealth Management

Don’t Let Your Gains Be Drained

 

Employment scams climbed to the second-riskiest in 2022, according to a new Better Business Bureau (BBB) report, while online purchase scams remained the riskiest scam type.

Employment scams rose from third-riskiest in 2021 to second-riskiest in 2022, according to a new report from the Better Business Bureau. Employment-scam reports submitted to BBB Scam Tracker rose 23.1% from 2021 to 2022. People also lost more money to this scam type in 2022, up 66.7% from 2021 ($900) to 2022 ($1,500). The median dollar loss for employment scams ($1,500) was significantly higher than that of $171 for all scam types.

Online purchase (shopping) scams remained the riskiest scam type in 2022. Online purchase scams comprised 31.9% of all scams reported to BBB Scam Tracker in 2022, with 74.0% of people reporting that they lost money.

Cryptocurrency scams dropped in 2022 from second- to third-riskiest due to a drop in reported scams, susceptibility (the percentage of those who lose money when exposed to a scam), and median dollar loss.

“Employment scams, which peaked at #1 on our list in 2019, are seeing a resurgence,” said Melissa Lanning Trumpower, executive director of the BBB Institute for Marketplace Trust, which produced the 2022 BBB Scam Tracker Risk Report. “This is a high-touch scam in which perpetrators spend more time with their targets in the hope of stealing more money from each target. Employment scams tied for the highest median dollar loss of all scam types. Home-improvement scams, #4 on our list of riskiest scams, also had a median dollar loss of $1,500.”

More people reported losing money when targeted by websites, social media, and email than other contact methods. Those who were targeted in person reported losing the most significant amount of money ($715), followed by text messages ($579) and phone ($550). Scams perpetrated by text messages increased by 39.6%, from 9.1% in 2021 to 12.7% in 2022.

Scams perpetrated online were more likely to result in a monetary loss than scams targeted via phone or in person. Credit cards remained the most reported payment method with a monetary loss, followed by online payment systems. The payment methods with the highest median dollar loss were wire transfer ($2,700), check ($1,277), and cryptocurrency ($1,135).

The riskiest scam type varied among age groups, with employment scams landing as the riskiest for ages 18 to 34. Online purchase scams were again the riskiest for ages 35 to 64. Home-improvement scams were the riskiest for ages 65 and up.

Military consumers (active-duty military, spouses, and veterans) reported significantly higher median financial losses ($238) than non-military consumers ($163). Active-duty military reported losing significantly more money ($490) than military spouses ($248) and veterans ($200).

The five most impersonated organizations reported to BBB Scam Tracker in 2022 were Amazon, Geek Squad, Publishers Clearing House, the U.S. Postal Service, and Norton.

For more report highlights, visit bbbmarketplacetrust.org/riskreport. Go to bbb.org/scamtracker to report a scam and learn more about other risky scams on bbb.org/scamtips.

BBB Scam Tracker is an online platform that enables consumers and businesses to report attempted and successful acts of fraud. The platform also enables people to search the scam reports to help determine if a scam is targeting them. The platform was upgraded in 2022 with support from Amazon and Capital One.

 

Vedang Chauhan Named a 2022 Engineering Unleashed Fellow

By
Architecture

Instilling an Entrepreneurial Mindset

 

Western New England University College of Engineering Professor Vedang Chauhan has been named an Engineering Unleashed fellow, a designation that recognizes leadership in undergraduate engineering education by the Kern Entrepreneurial Engineering Network (KEEN), a 50-partner collaborative whose mission is to instill an entrepreneurial mindset within undergraduate engineering students.

Chauhan is part of a select group of 21 individuals from colleges and universities across the country — and only two from New England — who have been named Engineering Unleashed fellows for 2022. Engineering Unleashed is a community of 4,000 faculty members from more than 350 institutions.

“KEEN supports teaching undergraduate students with an entrepreneurial mindset (EM) so they can create personal, economic, and societal value through their work,” Chauhan said. “I believe in KEEN’s mission and incorporate EM through my teaching. I design project activities for my students that help them develop an entrepreneurial mindset.”

“KEEN supports teaching undergraduate students with an entrepreneurial mindset (EM) so they can create personal, economic, and societal value through their work.”

Vedang Chauhan

Vedang Chauhan

Chauhan is a mechanical engineering professor with a wealth of experience in the field. He received his PhD in mechanical engineering from Queen’s University and has published numerou papers in prestigious journals, demonstrating his expertise in the field. He has also received several awards and grants for his research, which focuses on areas such as mechanics, materials, and manufacturing.

The nomination and fellowship naming process began with Chauhan’s initiative to participate in the Engineering Unleashed Faculty Development National Workshop Program. These workshops are designed and delivered by a collaborative group of subject-matter experts who serve as faculty members within the national network of partner institutions. The workshops attract faculty participants from across the country focusing on the development and application of an entrepreneurial mindset, whether it be in teaching, learning, research, industry, or academic leadership. Chauhan participated in the Integrating Curriculum with Entrepreneurial Mindset (ICE) 1.0 workshop, which connects problem-based active and collaborative learning to the development of entrepreneurial mindset.

“Students enjoy working on the projects and provide positive feedback on how EM activities foster curiosity, connections, and add value to their work,” Chauhan added. “I am thankful to KEEN ICE 1.0 workshop coaches, my fellow faculty members, and my university for all their support. I am happy to be a part of a Kern Entrepreneurial Engineering Network of like-minded educators.”

Working with the facilitators and then the coaches for up to a year, Chauhan completed the work and contributed to the Engineering Unleashed community through an online publication-sharing platform known as engineeringunleashed.com. The workshop coaches nominated a number of candidates, and an independent review committee from the KEEN partner institutions made the final selections.

To amplify the work of these fellows and advance the shared mission, awards are provided to the awardee’s home institutions through the Kern Family Foundation. As an ambassador for entrepreneurial mindset, each fellow will work on a project through their institution with a grant award of $10,000. In total, the colleges received $210,000 in support to recognize efforts in engineering education by their faculty.

The other 2022 Engineering Unleased fellow from a New England institution is Gbetonmasse Somasse, associate professor of Teaching at Worcester Polytechnic Institute.

How Landlords, Tenants Can Navigate the Commercial Market

By Contributor
Commercial Real Estate

This Is Not a Fire Drill

By Brion J. Kirsch and James F. Martin

 

Remember in elementary school when they would have a planned fire drill? The alarm would go off, and students lined up in an orderly fashion and walked single file to the nearest exit and out into the schoolyard. Inside, the school was completely empty.

Brion J. Kirsch

Brion J. Kirsch

James F. Martin

James F. Martin

Obviously, the circumstances are light years apart, but that’s essentially what occurred in office buildings in March 2020. One minute, every room is filled with people working at their desks; next thing you know, the entire place is vacant.

What would always happen after the fire drill — everyone was back at their desks in about 10 minutes — didn’t happen in office buildings. It’s been almost three years. Some are never coming back.

Remote or hybrid work is here to stay, and people’s habits and expectations have changed. As a result, the commercial real-estate market is facing challenging times. In Western Mass., for example, the vacancy rate for office space is of concern to landlords along with the reality of expiring leases for downtown office space. However, the more attractive rental price per square foot of class-A office space in Western Mass. serves as a significant advantage to retaining and attracting tenants when coupled with the lower cost of living in contrast to Eastern and Central Mass.

Thus, there are some reasons for optimism, and potential options for landlords and tenants alike.

The continuing development of multi-family apartment complexes in both the cities and the suburbs is a promising sign. And with the proliferation of shopping from home and consumer subscription services, industrial properties like warehouses and fulfillment centers are in high demand.

 

Options for Tenants

For employers who now have more workspace than on-site workers, subleasing is an interesting option that can both reduce expenses and boost revenue. This requires a conversation with the landlord, but if conducted in good faith, it can be a win-win situation.

With a landlord’s consent, a majority of commercial office leases allow subleasing and partial assignments. But finding an occupant to sublease part of your space is far from the final step; legalities and practicalities abound. The documentation must be specific and thorough as there’s an extra added layer of complexity in these situations.

Taking a contractual agreement between two parties and adding a third opens up room for all sorts of unexpected conflict and misunderstandings. The language in the agreement must be crystal clear.

“With a landlord’s consent, a majority of commercial office leases allow subleasing and partial assignments. But finding an occupant to sublease part of your space is far from the final step; legalities and practicalities abound.”

The biggest concern is historic and/or prospective liability. One party’s transgression may have a direct impact on the other party, even if there is fault on only one side. Something else to consider is the construction of a demising wall for the new tenant’s subleased space. To be up to code, this new area will also need proper access, exits, and restrooms, in addition to other possible requirements, such as a kitchen or metered utilities.

Depending on the terms of the lease, there may even be an express option that simply allows for the reduction in the total area being occupied and would prevent the need to sublease.

 

Options for Landlords

There’s an opportunity now for landlords to make a long-term play by allowing tenants to make modifications to their original lease. The value in this circumstance arrives in the form of an early renewal or extension of the current lease, in exchange for allowing the tenant to sublease a portion of their space or shrink their footprint.

As many business owners have discovered in other industries, incentives are becoming a more crucial part of attracting customers or, in this case, tenants. And just because a space was previously used for one purpose, that doesn’t have to remain the case. Repurposing is an exciting and risky but sometimes necessary option.

Taking an empty office building and converting it to multi-family apartments or mixed-use commercial space is a large undertaking. But the strong demand for housing seems likely to continue, while office space continues on a more uncertain path.

While interest rates and the cost of construction materials both remain high, supply-chain issues are easing, and real-estate profits from the past decade have some property owners’ war chests well-stocked. It’s also likely that property values will begin to fall in the coming months and years.

It’s anyone’s guess how the current confusing climate of high inflation, low unemployment, rising interest rates, and massive tech layoffs will shake out in the coming years. Some say a recession is inevitable; others are optimistic one will be avoided. One thing we do know for sure is that we’re not in elementary school anymore. And this is not a drill.

 

Brion Kirsch and Jim Martin are attorneys at the law firm Pullman & Comley, which has offices in Connecticut, New York, and Rhode Island, as well as Springfield. Kirsch co-chairs the firm’s real estate, energy, environmental, and land use practice and practices in both Massachusetts and Connecticut; Jim Martin is located in the firm’s Springfield office and is a recognized practitioner in the areas of commercial real estate and real-estate planning.

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