Why Depreciation Is The Biggest Perk Of Real Estate Investing

Investing for retirement is historically fraught with risk and fear. Investors in this group are generally older, ready to press on the brakes and work less yet still need a reliable source of income. Of the myriad opportunities available, one investment vehicle stands above the rest as far as consistency regardless of the current economic climate and has withstood the test of time through all cycles of the economy and various administrations. That vehicle would be real estate.

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Will Commercial Real Estate Values Fall? How Investors Can Prepare

Will the commercial real estate market always go up? Of course not. But investors have been spoiled by two decades of double-digit returns that were too good to last. In 2016, returns on institutional-grade property fell below a 20-year 10.1% average for only the first time since the Great Recession, and the latest Urban Land Institute’s Real Estate Economic Forecast puts estimated 2018 and 2019 returns around 6%.

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The ROI of Converting Class-B Buildings to Compete with Class-A Buildings

Class-B buildings currently represent an underserved value for owners and developers. They offer a lower barrier to entry, with plenty of vacancies and economical prices, while there is an oversupply and stagnant demand for expensive class-A properties. More importantly, class-B buildings allow developers to implement location-specific amenities and work-life convenience for an evolving millennial work force, and recoup ROI from operation efficiency, full occupancy leasing and sales of converted buildings.

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Retrocommissioning Reconsidered

Whether it’s been a while since your “new” building opened or you’ve simply inherited aging infrastructure, retrocommissioning offers property owners and  managers a unique opportunity to unlock new levels of control, efficiency, and savings.

Even when they take a proactive approach to managing existing or legacy equipment, facility and building managers are sometimes hesitant to undertake retrocommissioning. There’s no denying that, depending on the state of the facility or equipment, the task can be costly. Facility managers may have to return to square one with some systems, and depending on the scope, this prospect can be daunting from both a financial and scheduling standpoint.

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Part 2: More Commercial Lease Gets & Gotchas Founders Should Know About

As exciting as it is to build out your first office, it is not as important as your number one business investment—your people. Their comfort, their proximity to work, and their enthusiasm for being ‘at work’ should be foremost in your mind when considering space. Some companies when weighing a location have taken to mapping employee addresses to find the central most points.

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Will High Estate Tax Exemptions Mean Less Planning?

Taxes are at the front of every estate planning practitioner’s mind these days—even more so than usual.

In preparation for the Heckerling Institute on Estate Planning, Trusts & Estates conducted a survey of its subscribers that included questions on how they expected tax reform to affect their practices. Over 1,000 subscribers responded to the survey. About 70 percent said that they represented individuals with a net worth of less than $25 million.

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How Multifamily And Office Buildings Work Together To Build Wealth

Investing in multifamily housing and office buildings helps private investors build a portfolio that weathers risk better and builds wealth — and individual investors are wise to consider this two-pronged approach. Real estate is a hedge against volatile stocks and bonds, a way to build wealth as property values rise that is also very tax efficient.

But diversification is just as important in a real estate portfolio. Each property type performs differently based on market conditions, and investors can’t assume that one will always be a great investment because it has performed well in the past. Instead, a better real estate investment strategy is to build a portfolio that combines different types of income-producing properties.

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2018 Outlook For Top 4 Commercial Real Estate Sectors

There are several factors that indicate the cycle’s best years are in the past, Colliers International Chief Economist Andrew Nelson wrote in the company’s 2018 Outlook report, including slowing deal volume, eight consecutive months of declining commercial property prices, plateaued cap rates, a widening divide between seller asking prices and buyer bids and investors going in search of riskier assets for better returns.

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Wealth Transfer Planning Post-Tax Reform – It’s A Brave New World

It’s time to revisit your family legacy plan. The new tax reform legislation (Tax Act) creates a window of opportunity for wealth transfer planning by successful families until 2026. 

Doubling Transfer Tax Exemptions.  As of January 1, 2018, the Tax Act doubles the “basic exclusion amount” for the gift, estate, and GST taxes (transfer taxes) from $5 million to $10 million, as annually adjusted for inflation to determine the available exemptions in each year. The last time we had transfer tax relief, the gift tax exemption was capped at $1 million, but not this time -- the flood gates are open.

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Struggling with Vacancy? You May Get a Break on Property Taxes

In many states, abnormally high vacancy at commercial properties should mean a lower tax bill. Market transaction evidence essentially dictates this result: States that assess taxable value on commercial properties based on market value, as though leased at market rents, should allow a deduction from that value when the property incurs above-market vacancy and collection losses.

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Tips for Repurposing Commercial Real Estate

An empty office building doesn’t have to remain an office building — and an old supermarket doesn’t have to continue to house groceries. As the needs of communities evolve, the way people use older buildings can also evolve. Repurposing commercial real estate gives you the opportunity to revitalize an older building and breathe new life into a neighborhood or town.

Revitalizing commercial real estate can have many benefits for the area around it. Although the definition of abandoned property varies from state to state, it has a similar effect across the U.S. For example, buildings within a certain distance of abandoned property are likely to see a decrease in value. In some cases, buildings within 250 to 1,500 feet of an abandoned property can have their values negatively affected by the presence of the vacant real estate.

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Third Quarter Brings an Uptick in Office Leasing in Tech-Heavy Markets

Strong tenant demand in the third quarter of the year caused leasing activity to spike 11.1 percent to a two-year volume high of 62.4 million sq. ft., according to a third quarter 2017 office report from real estate services firm JLL, which attributes the bump largely to new product coming online in supply-constrained markets. Leases larger than 250,000 sq. ft. accounted for 17.5 percent of all leasing activity during the period.

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Five Questions To Ask Your Potential Property Management Company

When seeking out the right property management company, it’s typical of an owner to ask a standard set of questions. These often cover bottom-line financial results, standard practices and procedures and overall expectations. While those are all great questions, there are other queries that can be much more strategic, informative and conducive to generating results for your business.

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LOIS WEISS: How The Tax Reform Bill Favors Real Estate Investments

Real estate executives and investors may have lucked out so far with the proposed Tax Cuts and Jobs Act, but until the yeas have it — and it’s delivered by both houses of Congress and signed by President Donald Trump — anything can happen.

Both the House and the Senate are focused on the broad strokes of reducing the number of brackets, reducing taxes on the middle class, dropping taxes on businesses and repatriating offshore funds. But how Congress gets there is always a bumpy journey, and how the ultimate provisions affect real estate and the individuals who work in the industry could take a while to shake out.

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Investors Take On More Risk As Real Estate Cycle Nears Record Run

Property valuations, though cooling, are still hovering near cyclical highs, and buyers are balking at the price tags, taking into account the current length of the cycle, rising interest rates and future exit caps. “The reality is, most of the acquisitions being made are really, in the long run, a losing proposition for the buyers,” Yardi Matrix Director of Research and Publications Jack Kern said. “The sellers are doing really well because they are getting a premium for their properties. Buyers are losing [and] buying something that will not gain a sufficient level of value to provide returns they're going to need.”

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Does Internet Quality Impact Office Leasing Decisions?

A majority of leasing decision makers say a lack of reliable internet connections is a factor affecting their office rentals, according to a study that cites a building’s connectivity as a top factor in evaluating future office space.

The study, The Value of Connectivity: What’s the Cost of Poor Digital Connectivity for Commercial Real Estate, found that the quality of a building’s internet connection was cited by 87 percent of those surveyed as a top factor in choosing office space, just behind location (90 percent). An overwhelming 91 percent of respondents also said lack of reliable connectivity was a consideration in rental decisions.

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