Category: Spotlights

Internal Revenue Code (IRC) Section 1031 allows a property owner, who holds property for “the productive use in a trade or business or for investment” to defer paying capital gains taxes if the property owner sells such property, identifies “like kind” property within forty-five days of the sale, and acquires “like kind” property within one hundred eighty days of the sale. 

The era of free money being over, and with post-COVID inflation eroding purchasing power and making everything more expensive, markets are adjusting to the higher cost of acquiring and holding real estate. Plus, everyone is kept on edge by what is going on inside and outside the borders of the nation. And in New England, we are eyeing what is going on in the rest of the country.

The economy is a big unknown right now. There is fighting in Congress over budget and debt limit, speculation on the Fed’s next move and questions about which banks may be heading for trouble. So where do we turn for advice on the next trend in the real estate industry? There is really a mixed bag when it comes to the industry. 

Given changing economic conditions and shifting consumer trends in the commercial real estate market, developers require flexibility when expanding or modifying retail centers, while tenants seek stability and often invest heavily in a specific location with unique visibility and benefits.

My last article for the New England Real Estate Journal was titled Spring Preview 2023. In that article I stated that “The inflation of today, high gasoline prices, war in Ukraine and the steady increase in interest rates will have to have an effect on our economy, hotel operations and hotel sales.