As a Register columnist once wrote, “These are just opinions, but they’re all mine!” Today I am deleting my inbox for another issue of a random thought on commercial real estate. I find the occasional cleanup cathartic. So here it goes.
Reveal gender. Some of you may have noticed that I use “them” more often when describing the gender of owners or tenants. Yes, one of my readers scolded me. I realized that I was wrong and with it the morph. So I’m sorry if I’m offended.
Insomnia. My most recent column on the number one problem I hear business owners raise – the lack of a skilled workforce – received some comments. Specifically, my reference to our “subsidy” for the unemployed. The fact remains: Unemployment is rampant and we have poorly trained our young people in the existing professions, especially in the handicrafts.
Electricians, carpenters, structural steel workers, concrete pavers, roofers crowd every construction site. These artisans make the concrete boxes that commercial real estate agents are supposed to fill. Unfortunately, there is a huge yawn from those trained in more white-collar arenas, especially after a certain age. However, I don’t see these capable gray hairs as candidates for building structure.
Frothy or calm. People ask, “How is the market?” I answer with “it depends”.
If your specialty is industrial – manufacturing and logistics real estate and you represent the owner – you are a contractor. You simply manage the flood of activities surrounding your offer and choose from a large number of customers.
Conversely, advising tenants or buyers often fills the day with endless searches to find an availability and to set expectations when one is uncovered. The rules for an over-the-counter offer are changing. The owners are not as motivated. Brokers who market office complexes have to deal with systemic uncertainty. Questions such as – “How much space do we actually need and when” are topics of the management board.
Coming downturn. When does the music stop? Columns always generate interest. Inflation is rampant, supply chains are disrupted, everything is bottlenecked, and government debt is rising, but we continue to torpedo previously high selling and leasing costs. Today we are forced to rate offers as TBD – a hedge against dollars on the podium.
Ultimately, what will the results of 2021 bring? Many say there will be more of it. Some are cautious and see government spending massive on the horizon and preparing for a plethora of tax law changes.
After all, we have to pay off the debt somehow, right? Are the tax strategies such as carried interest, tax deferred exchanges and long-term capital gains that flow into commercial real estate activity at risk? Many believe that. Others recognize the massive lobby that the real estate business uses and are safe. Hopefully any change will not be retroactive.
Allen C. Buchanan, SIOR, is a Principal at Lee & Associates Commercial Real Estate Services, Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
source https://www.bisayanews.com/2021/09/26/what-will-come-of-commercial-real-estate-tax-breaks-daily-news/
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