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Real Estate Articles

Real Estate Articles

Are You Ready for the Workplace of the Future?

Are You Ready for the Workplace of the Future?

The way people work has evolved in dramatic ways over the past decade, and Millennials — who now represent the largest segment of the workforce — are driving even more change. Savvy investors, developers and owners are taking these shifts into account when...

Why Gross-Up Provisions are a Smart Bet

Why Gross-Up Provisions are a Smart Bet

Both commercial landlords and their tenants are always on the lookout for ways to save money and limit their financial exposure. If you haven’t done so yet, it may be time to consider using gross-up provisions in your commercial leases. These provisions...

Is Bridge Financing Right For You?

Is Bridge Financing Right For You?

Bridge loans can supply short-term financing before developers and investors cement long-term financing. Their popularity surged during and in the wake of the Great Recession — and that popularity has yet to retreat. But if you’re considering obtaining a...

Greening Your Projects Can Bring in More Green

Greening Your Projects Can Bring in More Green

Whether you’re developing commercial or residential projects, tenants and future owners are increasingly prioritizing environmentally friendly features. To avoid falling behind the competition, you need to stay on top of the latest sustainable features....

Making the Most of ADUs

Making the Most of ADUs

Accessory dwelling units (ADUs) are all the rage in urban areas, such as Los Angeles, Denver, Washington, D.C., San Francisco and Portland. The demand is expected to climb as the population ages and younger would-be homeowners are priced out of traditional...

Valuation Matters

Valuation Matters

Appraisers Apply Four Tests to Determine Highest and Best UseAn important factor for an appraiser to consider when valuing real property is its “highest and best use.” This may not necessarily be its current use, though.The Appraisal Institute defines...

Multifamily Developers May Want to Consider Short-Term Rentals

Multifamily Developers May Want to Consider Short-Term Rentals

Developers of multifamily projects are always looking for innovative ways to reduce vacancies and improve cash flow. Savvy developers in urban markets with an oversupply of multifamily housing and/or an undersupply of hotel rooms can benefit from a...

LLCs: How Limited is Your Liability?

LLCs: How Limited is Your Liability?

Many real estate investors hold title to their investment properties through a limited liability company (LLC). While LLC rules vary by state, this structure protects real estate investors from personal liability beyond the member’s equity investment. An...

Related Parties’ Property Exchange Doesn’t Qualify as Like-Kind

Related Parties’ Property Exchange Doesn’t Qualify as Like-Kind

Like-kind exchanges under Internal Revenue Code Section 1031 provide a valuable tool for taxpayers to defer taxes on capital gains. The exchanges are subject to some strict rules that are intended to prevent tax avoidance scams. In a recent U.S. Tax Court...

California Rent Control – What You Need to Know

California Rent Control – What You Need to Know

California Rent Control Bill AB-1482 - What Does it Mean for You? The California Senate approved Assembly Bill 1482 (“AB-1482”) on September 10, 2019. The bill will become a law when it is signed by Governor Gavin Newsom. Once signed, the measure would take effect...

Developer’s Yacht Deductions Run Aground

Developer’s Yacht Deductions Run Aground

Many businesses have stretched the definition of “marketing” to claim some questionable federal income tax deductions. A recent case involving a real estate developer illustrates how the IRS — and the U.S. Tax Court — generally see through these...

Now’s The Time to Prepare for the Next Recession

Now’s The Time to Prepare for the Next Recession

Will You be Ready?Markets tend to be cyclical. It’s likely that the U.S. economy will see another recession at some point in the coming years, and real estate will probably take a hit. A quick glance at the headlines hints at possible triggers, from trade conflicts...

Finding the Optimal Balance Between Debt and Equity Financing

Finding the Optimal Balance Between Debt and Equity Financing

Virtually all real estate investors use leverage, or borrowed money, in their business. It allows them to reach for higher priced property than they’d be able to afford by using just equity. But can you have too much of a good thing? What happens if you...

QOZ Update – IRS Issues Additional Proposed Regulations

QOZ Update – IRS Issues Additional Proposed Regulations

The IRS has released a second set of proposed regulations on the new tax incentives for investments in Qualified Opportunity Zones (QOZs). The incentives, created by the Tax Cuts and Jobs Act, permit taxpayers to defer, reduce and even permanently exclude...

Using Cost Segregation Studies for Like-Kind Exchanges

Using Cost Segregation Studies for Like-Kind Exchanges

Property owners have long turned to cost segregation studies to take advantage of accelerated depreciation methods, including bonus depreciation and Internal Revenue Code Section 179 expense deductions. Accelerated first-year deductions don’t change the...

Rental Activities Qualify for New Tax Break

Rental Activities Qualify for New Tax Break

The Tax Cuts and Jobs Act (TCJA) created a significant new tax deduction for qualified business income (QBI) for so-called “pass-through” entities for 2018 through 2025. But it also created uncertainty about whether owners of rental real estate were...

When it Rains, it Pours

When it Rains, it Pours

Consider an IRR Waterfall for Your Next Development Project The internal rate of return (IRR) waterfall arrangement has gained popularity in recent years as a way to shift risk from equity investors, while rewarding developers for strong results. But no...

Is This Bargain-Priced Property a Diamond in the Rough?

Is This Bargain-Priced Property a Diamond in the Rough?

M&A due diligence With real estate values holding fairly steady over the past several years, investors are quick to jump on a perceived bargain. While getting rock bottom pricing isn’t a bad idea, investors need to be careful about doing their homework...

How the TCJA Changes Depreciation Periods for Real Property

How the TCJA Changes Depreciation Periods for Real Property

The Tax Cuts and Jobs Act (TCJA) alters the recovery periods for certain kinds of property depreciated under the modified accelerated cost recovery system (MACRS) and the alternative depreciation system (ADS). The law also expands eligibility for some...

How Nonrecourse Loan Carveouts Jeopardize Personal Liability

How Nonrecourse Loan Carveouts Jeopardize Personal Liability

With the many types of loans available to borrowers, nonrecourse loans remain popular with borrowers because they can shield them from personal liability. But lenders will try to add “carveouts” to minimize that protection. If borrowers violate carveouts...

Use Artificial Intelligence to Benefit CRE Business

Use Artificial Intelligence to Benefit CRE Business

Artificial intelligence (AI) is bringing sweeping change to a wide variety of industries, and commercial real estate (CRE) is ripe for this technology. From marketing to property management, AI could expedite processes and cut costs in a range of ways. But...

What Not To Do In Like-Kind Exchanges

What Not To Do In Like-Kind Exchanges

Court Finds Sale-Leaseback Strategies Produce LoansThe Internal Revenue Code (IRC) has long allowed taxpayers to use like-kind exchanges to defer taxable gains. That doesn’t necessarily mean a like-kind exchange will go unchallenged by the IRS, though. A...

Historic Tax Credit is Alive and Well

Historic Tax Credit is Alive and Well

Prior to the passage of the Tax Cuts and Jobs Act (TCJA) in late 2017, the future of the Historic Tax Credit (HTC) for rehabilitating historic buildings was questionable. The HTC — also known as the federal rehabilitation credit — survived and remains a...

Is Seller Financing Right For Your Next Transaction?

Is Seller Financing Right For Your Next Transaction?

The commercial real estate market has been steadily making improvements since the 2008 financial crisis. While traditional financing is readily available, seller financing may be another viable option for many investors. Here’s what you need to know.Using...

Introducing the Opportunity Zone Tax Incentive

Introducing the Opportunity Zone Tax Incentive

IRS guidance answers taxpayers’ questionsOne provision of the Tax Cuts and Jobs Act (TCJA) was designed to spur capital investments in low-income areas. This new tax break allows investors to defer — or even eliminate — their capital gains taxes on investments in...

Three Fixes to Lease Accounting Rules for Landlords

Three Fixes to Lease Accounting Rules for Landlords

The new rules on accounting for leases have already taken effect for public companies and will apply to all other entities in 2020. While most of the rule changes apply to tenants, some of the provisions mark a departure for landlords — and many parties...

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