ATLANTA—Is it a buyer's or a seller's market? Where do 1031 exchanges fit in? Who wins in this round? GlobeSt.com caught up with Kurt M. Westfield, managing partner at WC Equity Group, to get his insights on these and related questions in our exclusive interview.
With regards to the 2018 commercial real estate market, Westfield tells GlobeSt.com he predicts another strong year overall. There will be some additional compression of caps due to interest rate hikes, he says, but those should be offset by the bullish nature of the tax reform bill and additional economic growth.
“Multifamily has continued to be the darling of the sector, due to increasing rents nationally, ability to cultivate strong caps—7%-plus—and strong investor sentiment due to economic gains, Westfield says. “The Millennial demographic has boosted the apartment growth and rents continue to be strong while vacancies remain low.
That, he says, made for a robust 24 months of purchasing by both, institutional and small investment groups seeking solid returns amid chatter of a peak. But where do we go from here on the buy and sell side?
“With the 1031 exchange policy remaining untouched and other various benefits to the commercial real estate fraternity of landlords, 2018 and 2019 will prove to be beneficial years on both landscapes: buy and sell,” Westfield says. Traditionally, as fiscal policy and local markets mature and absorb assets, he notes, markets are categorized as either a seller's, buyer's, or neutral market.
“I believe the coming 12 to 24 months will be beneficial to, both buyers and sellers,” Westfield says. “Sellers will have the opportunity to defer or retain profits while marketing at low caps due to a new pool of buyers seeking commercial real estate assets due to increased capital from tax reform.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 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.
