Opportunity Zones, a Rare Opportunity for Investors Too
Aug 06,2019
Senator Tim Scott, one of the sponsors of the bill that created opportunity zone legislation recently issued a warning to investors about being mindful of the law’s purpose to revitalize under-served and low-income census tracts. The moderator of Bisnow’s Opportunity Zone Summit in June of 2019 asked Senator Scott to end his comments on a positive note. In doing so, he quipped “I’m positive that if the opportunity zone program isn’t benefiting the communities it’s meant for, I’ll kill the program.” Census tracts are small, relatively permanent statistical subdivisions of a country. According to the United States Census Bureau, census tracts average about 4,000 citizens. While we must keep an eye on making sure opportunity zone (OZ) legislation remains intact, there is good news about the potential for substantial tax benefits for investors anticipating a capital gain in the next several years. Federal Opportunity Zones exist in 18 states, including...
Economic Turbulence Ahead? Global REITs Confident They’ll Weather the Storm
Oct 15,2018
“What goes up, must come down.” That familiar refrain echoes in the back of economists’ mind every time the Dow soars to new record-breaking heights, a quasi-regular occurrence last year. After more than 70 record closes in 2017, the markets fell in early February and major indices posted their worst weekly declines in more than two years. REITs declined in tandem, with the FTSE Nareit All Equity REITs Index hitting its lowest level in 14 months. Steep declines were short-lived, and the market started posting gains within the week. While indexes bucked the downturn in the immediate term, the dip is expected to usher in a period of increased volatility to an uncharacteristically calm market. The culprit for the sudden drop? A culmination of economic factors stirred the pot with two core concerns bubbling to the surface: interest rates and inflation. Tax cuts, a plan for increased federal spending, and strong monthly wage growth...
Assessing Atlanta’s Growth, Meeting Atlantans’ Needs
Oct 15,2018
It’s not just temperatures and humidity that are high in Atlanta this summer. Optimism is soaring as well. Results of Smith & Howard’s annual survey of construction and real estate industries reflect confidence that Georgia markets will experience new or expanded growth over the next three years. A quick view of our crane-dotted skyline confirms this. "Two things they're not making more of are land and time," said Kells Carroll, Acquisitions Director for Sugar Creek Capital, a national leader in affordable housing investments and property management. “Rising construction costs are a big issue; materials - lumber, bricks, they’re all going up in price, coupled with a rising interest rate environment it all directly impacts the feasibility of affordable housing,” he said. Progress Within Reach The rising cost of construction and scarcity of available land are key reasons developers will pass higher costs along. And while the growth is exciting for...
Atlanta’s Upper Westside: Vibrant, Urban and Opportunistic
Aug 20,2018
Major new developments are happening in the northwest corner of Atlanta, an area that has been rebranded as “Atlanta’s Upper Westside.” Over the course of two years, developers have announced more than $1 billion worth of new developments – attracting the attention of retailers and residents. Where exactly is the Upper Westside? Developers consider the boundaries for the Upper Westside to be very fluid. According to Malloy Peterson, Senior Vice President, Development, for Selig Enterprises Inc., the Upper Westside is bordered by Huff Road on the south; I-75 on the east; Marietta Road to the west; and Bolton/Moores Mill roads on the North. Atlanta’s Upper Westside Community Improvement District (CID) mapped out their interpretation of Atlanta’s Upper Westside which is similar to Peterson’s boundaries. In the 19th century the area was coined as an industrial hub and still carries that same aesthetic appeal today. “If I could use three words...
Little Known Tax Change Prompting Big Buzz
Aug 15,2018
It's been almost eight months since the Tax Cuts and Jobs Act was signed into law. There's been no shortage of analysis about its downstream effects, but one of the bill's most important features has not received the attention it deserves. It's an opportunity to defer taxes, invest, and potentially reap new benefits that can bring fresh growth to some of our under-served communities. The Investing in Opportunity Act allows for the creation of "Qualified Opportunity Funds," or "QO-Funds" to serve as vehicles for unprecedented community revitalization through the deferral and potential exclusion of capital gains. "A lot of people aren't aware of this yet," said Chris Conrad, Senior Manager with Smith & Howard, "but we are starting to see some traction. People have a lot of questions and we want to help get them answers." Forbes calls this new provision of the tax code a "triple play tax break"...
2018 Georgia Construction and Real Estate Surveys
Mar 21,2018
We are excited to release our second annual surveys of Georgia’s construction and real estate industries. Your perspectives on the current and future state of the industries are important to us. We’re also interested in learning about the impact of the Tax Cuts and Jobs Act on your business, and your views on skilled workforce challenges - the #1 issue in both of last year's surveys. The survey takes only 8-10 minutes to complete.  Click here to complete the Construction SurveyClick here to complete the Real Estate SurveyEveryone who completes the survey will receive a copy of the survey results and analysis as soon as they are available.Invite Your PeersWe greatly appreciate your feedback and your time. Please invite your peers to complete the survey by sharing this link. All participants will receive the survey results and analysis.The survey will be open through Tuesday, April 3 at 6 p.m.Please contact Smith & Howard’s Marketing Department if...
The Potential Impacts of Tax Reform to REITs and Real Estate & Construction Companies
Jan 12,2018
On December 22, President Trump signed the tax reform bill, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018," into law, marking the largest change to U.S. tax policy since the 1980s. With most of the provisions already in effect, it’s important that real estate and construction executives review the changes that occurred during the conference process to understand the impact to their companies. To help them navigate the key provisions affecting the real estate and construction industries, we’ve summarized the top considerations and implications below. [table id=5 /]   Tackling Tax Reform: 5 Initial Steps Companies Can Take Now Assess impact. Tax professionals will likely need to review the bill text manually and measure their company’s specific circumstances against it to assess the impact of each provision, as well as the holistic effect on their company’s...
Brick & Mortar Life Expectancy Isn’t What It Used to Be: Here’s How to Fight Obsolescence
Nov 01,2017
Buyers, owners, investors and developers of real estate are facing questions regarding how properties are valued in the current market, especially where there are problems appraising a property’s highest and best use. More specifically, this question focuses on reversion value.Multiple CasesRecent Class B or lower valuation projects (as well as some lower level Class A properties) have presented serious, widespread questions from a valuation standpoint. The main question is simple: What should be done with “obsolete” buildings?Historically, such a question became pertinent only after 50-100 years. Buildings were “built to last,” and most were designed to be updated over time. Part of the reason for that long horizon was that ample land was available for expansion. Another was that zoning was very prescriptive and clearly defined in many ways. Lastly, fixed real estate was a capital-intensive asset class.In the past five years alone, that question, however, is now being asked about...
The Silver Tsunami: Baby Boomers’ Impact on Senior Living Developments
Sep 20,2017
The golden years are on the horizon for the Baby Boomers, but the style in which they live in those golden years may be unlike their predecessors. Baby Boomers are inching away from the typical senior housing developments and retirement living. Instead, many in this generation seem to prefer the urban lifestyle – one that provides accessibility and entertainment. This shift is shaking up the real estate industry and how developers are analyzing trends and building future projects. The numbers behind the Silver Tsunami Baby Boomers are known for their impact on shaping the U.S. economy and as they enter their golden years that trend doesn’t seem to be slowing down. As boomers continue to age, they will play a major role shaping the housing market. The Joint Center for Housing Studies of Harvard University (JCHS) reports the number of Americans over the age of 80 is expected to double...
Capital Trends in the Atlanta Real Estate Market
Aug 23,2017
Smith & Howard’s 2017 survey of Georgia’s real estate and construction industries revealed strong optimism for continued growth among all real estate market sectors. At our recent event, Georgia’s industry experts discussed the market and the survey results, including the financing environment for real estate development in the region. To gain additional perspective about the real estate capital market in Metro Atlanta, we spoke with event panelist Lance Patterson, the CEO of Patterson Real Estate Advisory Group. Lofty Expectations To understand Atlanta’s real estate lending climate today, it’s useful to take a look back at where it was before the market crash. Prior to 2008, Atlanta was experiencing a robust market that, in Patterson’s words, simply became “way too frothy.”  “The vast majority of developers and the capital community didn’t recognize that we were doing far more deals than needed to be done,” said Patterson. “There was a sense that...

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