Biden Tax Bill - Please Don't Procrastinate!!

We sold 100 buildings at?Massey?Knakal?in December of 2012.

When the Obama administration was preparing for an increase in capital gains tax, there was a mad dash to close real estate transactions by year end. It resulted in the highest transaction volume in NYC history with 870 properties selling. That is 3x the number of transactions we are tracking this year.

We are anticipating a similar reaction to the Biden tax plan, which as proposed would impact the real estate market significantly more than the Obama proposal of 2013. While we don't know definitively what parts of the bill will go into law, the general consensus is that capital gains will rise significantly. While we hope the elimination of the 1031 Exchange is nothing more than a negotiation tactic, the threat of termination is enough to send shivers down the spine of the real estate industry.

Whatever these policies throw at us, the market will adjust and move forward. However, if you were planning to transaction a piece of real estate in the next 1-3 years, I strongly consider that you evaluate expediting that decision, AND PLEASE DON'T WAIT UNTIL NOVEMBER!!

In 2012 we were able to get 100 deals done in December because the market was strong, capital was accessible, and values were rapidly rising. Buyers were willing to move fast and at good prices. This year, while capital is certainly accessible, values are unfortunately on the decline, mostly as an effect of the rent law changes of 2019, and a recovering rental market due to COVID.?My?point being, in today's market you want to give your broker as much time as possible to find the right buyer and get you the highest value.

We typically coach our clients to expect a 6-month process to successfully market and close on a piece of real estate in NYC. 1.5-2.5 months of marketing exposure to target the best buyers, 1 month to negotiate a contract, and 2-3 months for the buyer to close. We can expedite this process of course, but it can come at the risk of sacrificing price for time.

You have one opportunity to successfully market and transact by the end of the year. Please don't hesitate to reach out to us to discuss property values, listing timelines, market conditions, and how this looming tax reform could potentially impact your investment planning. Our valuation and advisory services are free and the decision to sell is always yours, but now is a good time to know your options and plan accordingly.

We look forward to hearing from you and let us know how we can help.

Best,

DJ Johnston - Partner & Senior Managing Director

1040 Avenue of the Americas, 8th?Floor New York ? NY 10018

D 646.933.2619????C 914.584.7422

[email protected]