Even if commercial property prices are rising, sellers can’t make a profit if taxes absorb all the appreciation. That’s why tax-deferred exchanges continue to be an attractive alternative for a growing number of private investors, companies, and even governmental bodies interested in delaying payment of capital gains taxes.
In the event of an economic downturn in 2001, industry developments are working in your favor. Market forces and regulatory changes have converged in a way that’ll ensure a soft landing for commercial real estate.
The increased interest in 1031 transactions by property owners looking for tax-deferred commercial real estate ownership opportunities has masked one small problem: It’s not always easy for practitioners and their clients to find good matches for the properties that they want to exchange.
Increasingly, brokerages are offering their associates a menu of compensation arrangements, from the traditional commission to salary plus bonus to hybrid plans that cap commission in exchange for other incentives--and associates are going for it.
Industrial and office practitioners around the country are reporting a slowdown, though slight, in the absorption of space among dot-com and other Internet companies—a group that has been one of the demand drivers for both office and industrial space in recent years. But don’t fret. The Internet economy is just beginning its long-term run-up.
In an age when top office and retail properties regularly sell for millions, if not hundreds of millions, of dollars, there probably aren’t too many residential salespeople who don’t occasionally think about switching to the commercial side of the business.
Landing a deal with a top-tier client. Breaking into a new international market. Being named No. 1 salesperson in a global commercial company. That’s the stuff we were looking for when we set out to identify four commercial practitioners—specialists in industrial, office, property management, and retail--for this month’s cover profiles.
As an alternative to rent, some owners are accepting warrants that allow them to buy stock before it’s available to the public--a risky strategy, particularly as venture capital for dot-coms dwindles, but one that offers the possibility of a big payoff. Other owners are requiring fledgling high-tech companies to pay a year’s rent in advance.