Lawrence Fassler
The Advantages of “Middle Market” Commercial Real Estate
Everyone likes a trophy, and glamorous properties in big cities have certainly benefited from the recent strong real estate market. But much less attention has been paid to the resurgence of “middle market” commercial properties. We’ll explore here the opportunities offered by smaller-value transactions in areas not considered “gateway” markets ...
Tax Cuts & Jobs Act May Help Marketplace Investors
The commercial real estate industry clearly benefits from the Tax Cuts and Jobs Act recently passed by Congress and signed into law by President Trump. Even changes to the individual mortgage interest deduction and other limits on homeowner deductions may actually end up aiding the market for value-add multifamily projects ...
How Recent Tax Proposals May Affect Marketplace Investors Part 2 of 2
In part one, Lawrence Fassler discusses proposed changes to the tax code, including limitations on sponsored business interest deductions, changes to 1031 Exchange program and carried interest taxation. To read part one click here. Lowered Business Income Rates for Investors in Pass-Through Entities The change that might affect investors and ...
How Recent Tax Proposals May Affect Marketplace Investors Part 1 of 2 Part Series
The commercial real estate industry, in which many online marketplace investors participate, remained largely unscathed by the recent House proposal of changes to the Internal Revenue Code. Investors may actually benefit from some of the proposals, and changes to the individual mortgage interest deduction and other changes may end up ...
The Attractions of Commercial Real Estate
Direct participation in commercial real estate (CRE), private investments via pass-through vehicles, as opposed to publicly-traded REITs, has long been a key asset class for most larger portfolios. Online marketplaces such as RealtyShares have now made CRE available to accredited investors generally. These investments provide meaningful diversification to any portfolio. ...
Commercial Property Outlook for 2017
Online marketplaces like RealtyShares can allow investors to take advantage of investment opportunities across the spectrum of commercial property types. One of the primary market sectors is that of office buildings, which can range from large multi-tenant structures in city business districts to single-tenant buildings that might be built to ...
Marketplace Platforms and Institutional Investors
Until the recent development of online real estate financing marketplaces, it was difficult for smaller investors to participate in direct investments in commercial real estate projects. The development of these platforms also benefits institutional investors. How can marketplace investing and institutional investors work together? Real estate finance marketplaces have experienced ...
Can Pension Fund Troubles be Mitigated by Real Estate?
A number of pension funds, both public and private, have recently had difficulties – some have gone insolvent, or are otherwise are on the brink. Most of these funds hold more than half of their assets in equities – even though the famous (and successful) Yale Endowment model stresses the ...
Changing Dynamics for Retail Centers
Retail properties are recently experiencing a few different trends – some, seemingly contradictory. The sector is doing well, but there are changing dynamics with retail centers that should be examined as part of any investment decision. Department Stores Have Lost Importance Big American department stores like Macy’s are being outmaneuvered ...
2016 Tax Changes for Real Estate?
Donald Trump and the Republican majorities are coming into office with plans to change the U.S. tax code. It’s not clear, however, how real estate might fare under some of the changes being discussed. Earlier Blueprint Now Ready for Launch A sweeping platform for overhauling most of U.S. tax laws ...
Closing the Gap with Mezzanine Financing
Mezzanine finance is a bit like it sounds—the semi-floor, halfway up the stairs, that in department stores like Fields and Macy’s was used for just about everything in between the women’s and men’s displays on the first and second floors. In real estate finance and the “capital stack,” the first ...
Understanding Second-Lien Loans
Second-lien loans differ from mezzanine debt and preferred equity in several respects; each has different sets of rights. Preferred equity, for example, should not be subject to bankruptcy concerns, as it is not debt. And both preferred equity and mezzanine debt generally take over the manager’s control rights as a ...
Scaling the Wall of Maturities
A significant portion of outstanding commercial and multifamily mortgages held by CMBS-backed lenders were to mature in 2016-17—an upcoming “wall of maturities.” Online marketplace lenders have a place in sorting out these pre-Recession commercial loans. After-Effects of the Great Recession A huge number of commercial mortgage-backed securities (CMBS) conduit loans ...
Goldilocks Period for Housing Market?
The recent announcement that an earlier housing skeptic is now bullish on the U.S. housing market was stunning. The move was based on fundamentals, though—and is thus worth close review. Ex-Goldman Exec Makes a Big Bet on Housing Market Donald Mullen Jr., who a decade ago helped oversee the lucrative ...
A Slowing in High-End Housing?
Home prices are tied not only to interest rates and local demographic factors but also to new construction that brings on added supply to the housing stock. As prices rise, builders take on more construction projects, and the resulting new supply eventually permeates the market and can keep prices down ...
Investment yields across many asset classes have lately been disappointing, but a recent report seemed to show that real estate investment vehicles outperformed most other asset classes over the last 15 years. REITs Outperforming Other Liquid Assets? A recent Wall Street Journal article remarked on the planned move by Standard ...
Trends in Real Estate: Urbanization, Changing Office Usage
Certain American cities are seeing prices rise; others are starting to cool. Some broader demographic trends have continued, though—urbanization is on the upswing, and urban office usage patterns are changing. Home Buyers Want Cities No less than Robert Shiller—a 2013 Nobel laureate in economics, professor of economics at Yale University ...
Property is, in many areas, considered to now be about fully valued; interest rates can seemingly only go up; and the current low rates have been low for so long now that some observers fear a market top. Why are other observers less concerned? Low Interest Rates Fuel Exuberance Abroad ...
One of the simplest ways for companies to communicate financial well-being and shareholder value is to say that “the dividend check is in the mail.” Dividends—those cash distributions that some companies pay out regularly to shareholders from earnings—send a clear and powerful message about that company’s current performance and future ...
Passive Investing in Active Value-Add Real Estate
Many of the most interesting real estate investment opportunities involve “value-add” situations—renovation or redevelopment projects that aim at repositioning a property to a higher price point. The value-add strategy is often considered to have medium to high risk, but the returns can be potentially high as well. The Different Approaches ...
Apartment Outlook For Investors in 2016 is Rosy, But Watch Out For the Thorns
Apartment rents have been rising for six years, which is great news for investors. Most economists expect 2016 to be another strong year. Some caution is warranted, though, as developer interest is now acute and certain sectors soon may be seeing supply increases that outpace demand. According to real estate ...
Efficient Lending for Property Rehab Investors
Finding Efficient Lending for Real Estate Investing Rehab Loans Many investors have developed lucrative careers by investing in less-than-perfect residential or commercial properties, renovating them and reselling (or renting) them for a profit. The real estate market has now turned around, and although foreclosures are on the decline, good fix-and-flip ...
Transactions Involving Smaller Commercial Properties are on the Upswing Big trophy properties in larger cities have certainly benefited from the recent strong real estate market, but last year’s bigger story was about the recent resurgence of smaller commercial properties. Transactions involving assets priced under $5 million were at record levels ...
Understanding Equity Real Estate Investments Through Direct Participation Vehicles
Some real estate crowdfunding companies offer equity real estate investments through “direct participation” investment vehicles such as limited liability companies (LLCs). These entities, together with similar vehicles at the property title-holding level, allow for the “pass-through” of depreciation, interest expense and other deductions that can reduce or defer investors’ taxable ...
Taking A Cue From Real Estate Investors’ Long-Term Focus
Investors often try to profit by betting on short- and medium-term shifts in stocks and bonds. The real money, though, often comes from anticipating long-term trends, the kinds of changes that take place over many years. It’s a strategy with which real estate investors are well-acquainted. Real estate by its ...
