Category: Commercial

Opportunity Zones Face Bleak End of Year Deadline

Time is running out on a favorable tax benefit.

There’s a bleak deadline quickly approaching for the tax conscious. Qualified opportunity zones have been a tactical maneuver to defer capital gains for investments and see some step-up in basis to reduce taxes. But that ends come December 31, 2021. Starting January first, those tax advantages disappear. That seems to be nudging some last-minute investing.

QOZs were part of the 2017 Tax Cuts and Jobs law, which times out on December 31, 2026.

Click Here For The Full Article

Picture: Pixabay

4 ways parking garages are prepping for fewer cars

Developers are planning for a high-tech future that requires greater flexibility

The rise of ride-hailing, autonomous vehicles, and micro-mobility devices such as electric scooters are set to lower rates of car ownership among younger generations.

This, alongside increasing electric vehicle ownership, has building owners and architects thinking about parking garages and how they will need to adapt.

“The forecast demand for electric vehicles is increasing,” says Mike Bammel, Managing Director and National Practice Lead, Renewable Energy, JLL. “Existing properties may not have capacity or capabilities to handle it.”

Read on for four ways garages around the world are already starting to change.

They aren’t just for cars

Parking garages are being built for a future where people drive less, which means designing structures that can support the possibility to be turned into something else, like retail space or a theater.

For instance, a garage in AvalonBay Communities Inc.’s 475-unit multifamily complex in Los Angeles’s Arts District will have higher-than-average ceilings; flat floors, unlike the slanted foundation you find in most parking garages; and elevators and staircases are in the middle of the structure, not on the perimeter. The project is due to be completed in 2022.

Click Here For The Full Article

Picture: Pixabay

How the Pandemic Has Changed Real Estate Contracts

While we hope the virus will soon be a thing of the past, some contractual provisions and issues are sure to become part of real estate professionals’ new normal. As a result of lessons learned from the pandemic, most real estate agreements, such as leases, financing documents and contracts, warrant consideration of new provisions that are likely here to stay.

No provision has been more scrutinized in the months following the March 2020 lockdowns than the “force majeure” clause (a provision that, under certain circumstances, can either release or postpone contractual obligations). Throughout the pandemic, practitioners have been trying to interpret, and reinterpret, force majeure clauses to determine if the pandemic qualified as a force majeure event. Conversely, if a contract did not include a force majeure provision, most everyone in California, for example, quickly became familiar with Section 1511 of the California Civil Code, which is California’s default “force majeure” statute and applies to contracts without express force majeure clauses.

Click Here For The Full Article

Picture: Pixabay

Commercial and Multifamily Mortgage Delinquencies Decreased in January

Adam DeSanctis
[email protected]
(202) 557-2727

WASHINGTON, D.C. (February 2, 2021) – Delinquency rates for mortgages backed by commercial and multifamily properties decreased in January, according to the Mortgage Bankers Association’s (MBA) latest monthly MBA CREF Loan Performance Survey. The survey was developed to better understand the ways the COVID-19 pandemic is impacting commercial mortgage loan performance.

“The stress in commercial mortgages continues to be concentrated among the property types that have been most directly and immediately impacted by the pandemic, most notably lodging and retail properties,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Among some other property types, including office and multifamily, overall delinquency rates remain lower, but have climbed slightly in recent months. While MBA is forecasting for a strong economic rebound in the second half of this year, as a rapid roll-out of vaccines and continued government fiscal assistance to households and businesses provide support for the market, there still remains a heightened sense of uncertainty about the months ahead.”

Click Here For The Full Article

Picture: Pixabay

What an Uncertain Commercial Real Estate Outlook in 2021 Means for Financing

By Steven Caligor, BHI

In these early days of 2021, there appears to be some cautious prospects of hope.

A COVID-19 resurgence both internationally and domestically, further lockdowns, and even a new variant of the virus create uncertainty. However, the vaccine rollout has sparked market rallies, along with hopes of returning to a degree of normalcy toward the end of the year. We now have a stimulus package and a new presidential administration. Yet this scenario is tempered by a focus on the predicted winter COVID activity, thus creating further question marks.

Even the economic forecasts present a mixed picture. The base case from the Conference Board calls for a 3.4 percent annual expansion of the U.S. economy in 2021. Yet the Congressional Budget Office (CBO) projects that GDP will increase 4.2 percent in 2021, and the CBRE Real Estate Market Outlook forecasts 4.5 percent GDP growth this year.

The ambiguity of where we are in the COVID crisis — whether there is an end in sight and when — will determine prospects for the real estate sector. In 2021, the real estate story will be all about asset class, density and geography. For each of these aspects, to paraphrase Charles Dickens, it could be the best of times or the worst of times, depending on multiple variables.

Click Here For The Full Article

Picture: Pixabay

There’s ‘a lot of opportunity’ in real estate as pandemic pinches property market, says investor

There is “a lot of opportunity” for investors to take advantage of distressed real estate assets, according to one of London’s prime property investors.

Opportunity abounds for investors looking to seize on distressed real estate assets in the wake of the coronavirus pandemic, according to one of London’s prime real estate investors.

Thomas Balashev, founder and CEO of Montague Real Estate, said real estate has been unduly hammered during the downturn, creating opportunities for buyers to make gains as the economy recovers.

“I think it goes without saying that there will be a lot of opportunity,” Balashev told CNBC’s “Squawk Box Asia” on Tuesday.

A different kind of crisis

Unlike in the 2008 Financial Crisis, which was linked directly to the U.S. housing market and enabled opportunities for some people to “get ahead of it,” the current economic crisis caught the market off guard, hurting otherwise sound assets, Balashev said.

“If you look at the way the pandemic’s been handled, both politically and the devastating effect it’s had economically, it’s caught many people by surprise,” he said. “So assets that really shouldn’t be distressed, shouldn’t have had such a significant drop in value, have suddenly come onto the market.”

Click Here For The Full Article

Picture: Pixabay

Distressed Commercial-Property Sales Seen Surpassing Last Crisis

CoStar Group estimates that $126 billion in CRE assets will be sold at distressed prices through 2022.

(Bloomberg)—An estimated $126 billion in commercial real estate will be forced to sell at distressed prices through 2022, more than the first two years after the global financial crisis, according to CoStar Group Inc.

Distressed hotel, retail, office and other properties will continue to flow to the market over the coming five years, potentially reaching $321 billion in sales by 2025, the real estate analytics company said. The total may swell to $659 billion in a worst-case scenario, according to a CoStar presentation released last week.

Mortgage delinquencies have soared for hotel and retail properties during the pandemic, while office buildings face an uncertain future as employees continue working remotely. Regulators have so far avoided pressuring lenders to recognize losses, while most borrowers continue to hold out hope for a rebound, especially as Covid-19 vaccines begin distribution.

Click Here For The Full Article

Picture: Pixabay

The Opportunities and Challenges of Sourcing Deals in Today’s Environment

CRE pros talk about how they are sourcing deals and investors as in-person meetings remain largely on hold.

Less than two weeks before Thanksgiving, commercial real estate investment professionals James Simmons and Sonya Rocvil spoke as part of a six-person panel on investing, acquisitions and development during the Diversity in Commercial Real Estate Virtual Summit, organized by the Avant-Garde Network on Nov. 14.

Rocvil, founder and principal of New York City-based Bedrock Real Estate Investors LLLC, which focuses on workforce housing, says the 10 virtual events where she’s spoken this year haven’t led to any deals yet. But she hopes they have set the table for possible acquisition and capital deals in 2021. At the moment, her firm’s portfolio comprises two multifamily properties in Georgia.

Rocvil notes that the absence of face-to-face networking since the pandemic started has been challenging, but it hasn’t halted networking by phone and through electronic means. Speaking at virtual events has been effective in broadening Rocvil’s circle from her home turf of New York City to the rest of the country, she says. In addition, she’s been able to rekindle connections that may have been somewhat dormant prior to the pandemic.

“We’re in an environment now where your level of exposure can be even more than it was in an in-person environment,” Rocvil says. “I’m definitely stepping outside my comfort zone, I have to say, but that’s how you grow.”

Bedrock Real Estate Investors currently syndicates deals for multifamily properties, mainly through family and friends. But Rocvil hopes to attract family offices and high-net-worth individuals (HNWI) as investors.

Click Here For The Full Article

Picture: Pixabay

All Hail Amazon: Why E-Commerce is All Powerful in CRE

One hundred new warehouses. One thousand new delivery hubs. One hundred thousand jobs.

Amazon likes its numbers round, and it likes them in headlines. The e-commerce behemoth has been on a tear over the last several months, leasing, outfitting, and opening hundreds of millions of square feet across the country, in stark contrast to the general economic gloom.

Amazon opened 100 warehouses in September alone, in addition to the 100 distribution facilities and 1,000 neighborhood delivery hubs it leased, or plans to lease, in the near future.

It has more than 100 million square feet of planned space underway, and has ramped up its activity across the United States. These include at least six new warehouses in Georgia, four in the Atlanta area; at least seven distribution centers in Texas, near Dallas, Houston, Austin and El Paso; five scheduled to open in Arizona by December, doubling the number of its facilities in that state; and 12 in California.

Online sales have skyrocketed during the pandemic, so it’s no surprise that the
e-commerce king is a pandemic winner. In the process, Amazon is taking a lot of industrial real estate with it.

Click Here For The Full Article

Picture: Pixabay

Trump Tax Saga Shines Spotlight on Benefits of CRE Ownership

Depreciation, debt write-offs, tax credits and other measures are among the tax avoidance benefits inherent in the sector.

It may seem like a lifetime ago, but before news of the ongoing COVID-19 outbreak involving President Trump, White House staffers, Republican politicians and others, the New York Times stirred up a political firestorm surrounding President Trump’s personal finances with a new investigation revealing a staggering amount of business losses over the past two decades. The headline grabber was that he paid just $750 in personal federal income taxes in 2016 and 2017 and nothing in 11 of the 18 previous years. Additionally, the article said he claimed a total of $1.4 billion in losses from his core businesses for 2008 and 2009 and collected a $72.9 million refund for the 2010 tax year.

The article is just another chapter in the ongoing saga of President Trump’s personal tax returns, which he has chosen not to release to the public as most political candidates have done in recent decades. The New York Times piece amplified earlier reporting it had done in 2019 alleging that President Trump had reported $1.17 billion in losses from 1985 to 1994. As with those findings, the new revelations have put the tax benefits of commercial real estate ownership firmly in the spotlight.

President Trump has said publicly that he has paid millions in taxes, including property and payroll taxes. At the same time, he also has been candid in admitting he has utilized tax credits, deductions and real estate depreciation to offset income. For example, the Trump Organization received $40 million in Federal Historic Tax credits for its 2014, $200 million renovation of the Old Post Office just blocks from the White House into the 272-room Trump International Hotel on Pennsylvania Avenue.

Click Here For The Full Article

Picture: Pixabay

Scroll to top
error: Content is protected !!