All signs indicated that multifamily activity will remain strong in 2018. Despite being so late in the cycle, Mark Ventre, SVP at Stepp Commercial, says that the new tax plan and low—although slowly rising—interest rates will fuel market activity throughout the year. We sat down with Ventre to talk about the Los Angeles multifamily market and what we can expect this year.

GlobeSt.com: How will the new tax plan impact the multifamily market in Los Angeles? 

Mark Ventre: The tax plan will have a positive impact on the multifamily industry for various reasons.  Owners of pass-through entities such as LLCs and LLPs, private equity funds, and S Corporations will be able to claim a 20% deduction on their income.  Additionally, the depreciation schedule has been shortened from 27.5 years to 25 years.  Indirectly but not at all less consequential, is how it will affect the single-family market, especially in high property value locations like Los Angeles. There is a new $10,000 limit on state and local property tax deductions, and the interest expense deduction has been reduced to the first $750,000 of mortgage debt (and an elimination entirely on the interest deduction on home equity loans).  And, because the standard deduction has doubled, there is less of an incentive to itemize, which is one of the main benefits of home ownership.  All these reasons could cause would-be homeowners to continue renting.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.