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Broad Yet Subtle CRE Changes Coming Through Tax Reform

With tax reform legislation now signed into law, Congress' long-promised tax overhaul appears to finally be coming to fruition. But what does that mean for commercial real estate investors? Marcus & Millichap's John Chang explains.

By John Salustri | Updated on December 27, 2017

“The new tax law is generally benign for commercial real estate, but there are many nuances that will affect investor’s real estate and their after-tax returns,” says John Chang.

CALABASAS, CA—The passage of the long-anticipated tax reform legislation will take effect next year, leading many investors to the arduous task of recalibrating their strategies and assessing how the changes will affect their assets. As John Chang, first VP of research services for Marcus & Millichap, explains, “The new tax law is generally benign for the commercial real estate sector, but there are many nuances that will affect real estate and the after-tax returns of investors.”

Before considering some of the specific provisions, it is worth noting that the simple act of passing tax reform legislation itself could significantly benefit the sector. The clarity on tax reform will reduce the uncertainty that has weighed on the marketplace. As Chang states in a Special Report issued by the company, commercial real estate investors who may have been hesitant to move previously, will now have a much better understanding of the investment real estate landscape and can formulate a plan under the new rules.

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