Our extensive insights were prepared to equip investors with the knowledge they need to make sound investment decisions. Here are the top articles our readers found most beneficial.
The Flight to Tax-Free States
When it comes to investing in commercial real estate, it is crucial to understand prospective tax advantages. Having an effective tax strategy can lower an investor’s overall tax burden and bring awareness to tactics like 1031 Exchanges and explore the maximum amount of deductions. One additional approach investors consider is investing in states with no income or capital gains tax. In this article, Matthews™ presents various avenues for tax benefits to apply to current or prospective properties and investment goals.
What Driving Cap Rate Compression?
Depending on the side of the transaction an investor finds themselves in, capitalization rate compression can be favorable or costly. Although other factors must be considered when evaluating a real estate transaction, the capitalization rate, or cap rate, remains a paramount figure for most private investors as they chase higher yields on their investments. In this article, Matthews™ explores the concept of cap rate compression and what it means for commercial investors.
What Does Biden’s Tax Plan Mean for Commercial Real Estate Investors?
The American Families Plan is the second part of President Joe Biden’s 10-year initiative, the counterpart to a $2.3 trillion infrastructure and jobs package, dubbed the American Jobs Plan. It is a $1.8 trillion economic proposal to support childcare, education, family leave, among other initiatives. It will be paid for by tax hikes on capital gains and individual income. The plan is currently speculative and will be a challenge to pass in Congress, but the proposed tax increases are cause for concern in the commercial real estate industry.
Net Lease Tenant Report
In 2021, single tenant net lease found stability, and demand increased among pandemic-resilient product types. Investors continue to look for investment-grade tenants with a history of longevity and a proven track record of staying profitable in all economic climates. In this report, Matthews™ takes a look at data from 60+ tenants, including current on-market data for typical lease structures, key statistics, and transactions, providing you with insight into opportunities in the market.
U.S. Migration Snapshot | Where Are Americans Moving?
In 2018, core urban markets witnessed retail expansion, especially for experiential retail that targeted younger generations. In 2019, millennials continued to push growth in the urban core, trading square footage for convenience to live near these communities. In 2020, COVID-19 was introduced, disrupting urban markets. Many people reevaluated their housing choices, and high-density residential living became less favorable. In 2021, several people relocated to markets that made more sense for them, and for many, this meant more laissez-faire states with business-friendly regulations. For others, suburban life was attractive as it meant less expensive cities and more space.
The U.S. Sunbelt
The U.S. Sunbelt encompasses the southern and southwestern portions of the nation, including Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, New Mexico, South Carolina, Texas, Tennessee, and parts of California, North Carolina, Nevada, and Utah. The term “Sunbelt” refers to the area’s warm climate and rapid economic and population growth that has been recognized for decades. In conjunction, the Sunbelt states have drawn in businesses and residents alike due to the affordable cost of living, lower cost of doing business, tax-friendly environment, and copious developable land. The people, job, and business growth on the Sunbelt point to favorable demand for multifamily properties.
Self-Storage Market | What Caused the Perfect Storm?
How has the self-storage industry in a post-lockdown world become one of the most desirable asset classes of commercial real estate? Disruptions in housing, elevated migration, lifestyle changes, and office space shifts caused by the global pandemic created a surge in self-storage demand, with institutional investors, private equity firms, and private buyers all taking notice. With supply-demand fundamentals balancing in most markets, there has been a significant increase in capital chasing these assets.
A Whopping Recovery – Why Los Angeles Remains a Great Investment
Los Angeles has had its fair share of challenges over the decades, but it continues to attract new talent and investors seeking opportunities. These challenges include the financial crisis, COVID-19, and Los Angeles’s biggest Achilles heel – housing construction. They have all shaped the area’s current real estate landscape and the shifting market preferences. However, Los Angeles is resilient, and in this article, Matthews™ examines why opportunity will always be present in this apartment market.
Affordable Housing Crisis | The Top 3 Things to Know
As many readers are well aware, the United States is experiencing a housing crisis. While supply isn’t keeping up with demand, wages aren’t keeping up with rents. According to Apartment List, the national median rent growth across the United States increased by 13.8 percent from January 2021 to July 2021. The country needs to add two million housing units per year to accommodate a population that grew by 7.4 percent over the past decade, according to the recently released data from the U.S. Census Bureau. But last year, the United States produced only 1.3 million housing units. This dislocation in demand and supply is explained by regulations and delays in permitting, rent control in large cities, labor shortages in the construction industry, and restrictive zoning.
Is a 1031 Exchange Right for Me?
1031 Exchanges are a popular tax deferral strategy for real estate investors, wherein a commercial property owner sells one or more of their assets in exchange for one or more like-kind (investment real estate) properties of equal or greater value and defers capital gains taxes. Commercial real estate owners have the opportunity to capture new wealth and preserve existing equity by exchanging into bigger or more expensive properties depending on the investment goals.
