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Compelling time to own commercial real estate

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The economic collapse that began in 2008 paralyzed global capital markets and striped many trillions of dollars in wealth from the global economy. While recent years have brought a slow but steady recovery to the United States and abroad, the legacy of this event has been fear, uncertainty and impatience for many owners of commercial real estate. However, with fear and volatility comes opportunity for those willing to venture back into the market.

Historically low interest rates driven by years of the Fed’s policy of quantitative easing, investor's increasing appetite for tangible assets, baby boomer estate planning needs and the growing demand for fixed income alternatives now present myriad options for current and prospective property owners alike. Those interested in trading up to higher quality assets, diversifying into multiple properties or transitioning from less efficient residential to commercial property now have the opportunity to defer all taxes on any capital gain through proper utilization of the IRS 1031 Exchange Provision.

Owners who wish to exit the market altogether or gain needed liquidity can simply strip equity through refinancing, take advantage of UPREIT (Umbrella Partnership Real Estate Investment Trust), DST (Delaware Statutory Trust) or other alternative strategies to stage tax recognition across multiple tax years. Lastly, the confluence of market conditions and fundamentals mentioned above has created an ideal time for business owners, those who have historically leased their premises, or first-time investors to enter the market and purchase commercial real property.

The sophisticated strategies discussed herein, require careful planning and guidance from a team of professionals assembled and led by an experienced commercial real estate adviser, preferably one who is well-versed in aspects of finance, current law, valuation, tax matters, asset protection and broad market conditions.

Chris Bryant is managing director at Newmark Grubb Knight Frank San Diego. As part of the NGKF Capital Markets Group, he is focused on consulting individuals, family offices, corporations and institutional clientele in matters of acquisition, disposition, valuation, investment strategy and portfolio advisory. With an extensive development, valuation, transactional and financing background, Bryant has represented many REITs, various banking institutions, municipalities, private equity/hedge funds and insurance companies throughout his career. Bryant holds a B.A. in natural sciences/mathematics from Thomas Edison State College, has achieved the Certified Commercial Investment Member designation, is an IFAS Senior Appraiser Designee (NAIFA), an ASA member, a Certified General Appraiser, California real estate broker, and has completed the capital markets executive program at Harvard Business School along with the UCLA Global Programs in mergers and acquisitions and investment banking. Current and past professional memberships include: ICSC, ULI, Appraisal Institute, NAR, ASA, NAIFA and CCIM.

He can be reached at:

Newmark Grubb Knight Frank, 4275 Executive Square, Suite 350, La Jolla. (858) 875-3614 or (858) 243-8724. cbryant@ngkf.com.

-Submitted by Newmark Grubb Knight Frank.

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