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Archives for May 2021

How Would the New Tax Proposals Impact CRE Investors?

May 27, 2021 by Marcus & Millichap Research Services

How New Tax Laws Could Impact Real Estate Investors 

Major Uncertainty Surrounds Proposed Tax Changes

  • Potential tax provisions could impact capital gains tax rates, 1031 Exchanges, tax carried interest, and more
  • Few details exist and proposal has a long road through Congress before being signed into law

Changes to Tax Policy Could Have Broad Impacts

  • Proposal would raise capital gains tax for those making over $1 million to same rate as ordinary income
  • A $500,000 cap on 1031 Tax Deferred Exchanges would impair investors’ reinvestment into new properties
  • This could weigh on investment and economic activity, in turn slowing the redevelopment of needed CRE

What Actions Should Investors Take?

  • Consider selling now; the sales market is strong and future tax hikes could consume additional appreciation gains
  • Exchanging properties while tax rules are known can help avoid risks from unexpected changes
  • New policies could be voted on this year, changing the real estate landscape for years to come

Filed Under: Research Brief

Research Brief: Retail Sales May 2021 | Consumers Remain Active; Retail Sales Well Above Pre-Recession Levels

May 24, 2021 by Marcus & Millichap Research Services

RETAIL SALES RESEARCH BRIEF: MAY 2021

Consumers Remain Active;
Retail Sales Well Above Pre-Recession Levels

Retail spending levels off. As the stimulus dissipated, consumer spending dipped 0.8 percent in April as shoppers stepped back from record purchasing. Year over year, core retail sales jumped 37.6 percent, though the annual comparison comes against a backdrop of broad shutdowns in April 2020. Some of the slowdown can be attributed to a wide pause in reopening policy changes last month. Moving forward, however, several modifications are on the horizon that should propel consumer spending higher. Several states are terminating federal unemployment benefits sooner than the current Sept. 6 timeline, which should help retailers staff to today’s occupancy guidelines. Additionally, the CDC lifted mask restrictions for vaccinated individuals, which will relieve some uneasiness among those still taking extra precautions to avoid contracting the virus.

Retail real estate turning the corner. Although net absorption is expected to remain negative over the short term, the return of space to the market is largely aligned with terminating leases rather than newly shuttering stores. Retail establishments that have persevered through the health crisis have the potential to thrive due to pent-up demand. Competition is lower following the bankruptcy of some service-related firms, and additional traffic will boost sales in the coming months. Spending at bars and restaurants is only down 2.0 percent from February 2020, despite foot traffic being 15.6 percent lower. More visitors are expected as capacity ramps up.

Fundamentals hold up better than anticipated. Retail vacancy increased 70 basis points year over year to 5.7 percent in the first quarter despite the tremendous pressure placed on retailers during the pandemic. That figure is expected to rise, though the immense stimulus and support  provided to stores from the Fed and Treasury Department appears to have been more successful than projected. The health crisis may have “trimmed the fat” from bricks-and-mortar retailers rather than eliminating concepts that would have otherwise survived. However, local retailers without access to lines of credit have been disproportionately impacted despite federal intervention.

37.6%

0.8%

Annual Gain in Core Retail Sales in April 2021 Monthly Decrease in Core Retail Sales in April 2021

Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics, Federal Reserve; Placer.ai; Transportation Security Administration; U.S. Census, Bureau

 

Click Here to Download Report 

 

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Filed Under: Research Brief

LIVE 60-Min Webcast, Marcus & Millichap Retail Trends | 2021 Retail Real Estate Outlook: What’s Next as We Navigate the Impacts of COVID and Macro-Economic Factors? | May 24th, 2021

May 24, 2021 by Marcus & Millichap Research Services

2021 Retail Real Estate Outlook:
What’s Next as We Navigate the Impacts of COVID and Macro-Economic Factors?

Please join us for an engaging panel discussion with industry leaders on the retail real estate investment market.
Daniel Taub will host a live client webcast featuring a panel of industry leaders to discuss the emerging trends and investment outlook for retail real estate.
In addition, Hessam Nadji will deliver a market update special presentation.

Date: Monday, May 24, 2021
Time: 01:00 PM Pacific Daylight Time
( 3:00PM Central | 4:00PM Eastern )
Duration: 1 hour


Featuring Speakers:

  • Beth Azor, Founder and Owner, Azor Advisory Services
  • Conor Flynn, Chief Executive Officer, Kimco Realty Corp.
  • Joe Zidle, Managing Director, Blackstone

Hosted By:

Daniel M. Taub, Senior Vice President, Retail Division, Marcus & Millichap

Special Presentation By:

Hessam Nadji, President and CEO, Marcus & Millichap

Click Here to Register for the Event 

 

* The email address used to register will also be the one you use to log in.

Once registered, you will receive a confirmation email with login instructions.

By registering for this event you agree to Marcus & Millichap’s Privacy Policy.

Please add “on24.com” to the safe address list of your junk e-mail blocker/filter.

Questions? Contact webcasts@marcusmillichap.com or call (925) 953-1735.

Filed Under: Client Webcast

Post COVID-19 Outlook: What is Behind Today’s Unexpected Investor Optimism? | 2Q/2021

May 18, 2021 by Marcus & Millichap Research Services

Investor Optimism Compressing Cap Rates for Properties with Performance Durability, Strong Recovery Prospects

* Forecast range
Sources: CoStar Group, Inc.; MNet; NICMap; Real Capital Analytics;
Office of Financial Research; Federal Reserve

Strengthening economic tailwinds are brightening recovery expectations and spurring investment activity for well-positioned assets.

Competitive bidding for properties that weathered the pandemic or are poised to stabilize quickly post-crisis is compressing cap rates.

Private investors have been a driving force during this period of uncertainty, building off of a long-term trend of increasing involvement.

Key Features Include:

  • Details on how investors are approaching each of the four main property types
  • Discussion of cap rate trends for industrial, multifamily, office and retail properties
  • Breakdown of private buyer investment volumes over time

Click Here to View the Full Report 

Filed Under: Research Brief, Special Report

ICSC: RECon Virtual Event | May 25th-26th, 2021

May 17, 2021 by Marcus & Millichap Research Services

ICSC Las Vegas RECon returns in 2021 with a special year-end virtual gathering for retail and real estate professionals. In this new interactive environment, leading developers, owners, brokers and retailers are able to conduct business and build their networks on one high-touch online platform.

​Marcus & Millichap is proud to sponsor ICSC RECon Digital, being held online on May 25-26, featuring a virtual booth displayed on the interactive platform.

Jesse Limon will be available for virtual meetings on both Tuesday, May 25th, 2021 and Wednesday, May 26th, 2021.

Call Jesse Directly to Schedule a Meeting at (212) 430-5291, or Click Here to Email and Schedule a Meeting with Jesse

Click Here to Register for ICSC: RECon Virtual Event

Filed Under: Special Report

Is The Economy Facing New Risks from Overstimulation?

May 17, 2021 by Marcus & Millichap Research Services

Are We Facing a Labor Shortage?

  • Retail sales jumped 15% above pre-recession levels and rising consumption is starting to stir inflation
  • As demand rises, companies are reporting labor shortages despite an elevated number of unemployed
  • About 4.1 million more people are unemployed now than before the pandemic; far below the 23M in April 2020

Disconnect Between Job Openings and Unemployment

  • Job openings reached an all-time high this March, at over 8.1M; previous peak was 7.6M in November 2018
  • Enhanced $300/week federal unemployment benefits disincentivize some people to work; run until September
  • Disproportionately affects Retail and Hotel workers

Is This a Concern for Commercial Real Estate Investors?

  • Staff shortages likely transitory; should settle by the Fall
  • Risk of overstimulation exists, but likely better than the alternative scenario of under-stimulation
  • Signs point to a faster recovery, which benefits all types of commercial real estate, even those facing headwinds
* Job openings through March; Unemployed through April
Sources: Marcus & Millichap Research Services, BLS

Filed Under: Research Brief

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This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2020 Marcus & Millichap and Limon Net Lease Group

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