While the tax reform was the cause of investor hesitation in 2017, now that a bill has passed, many believe that it will help fuel activity in 2018. The impact of the new tax reform bill was among the discussion topics at the CREW San Diego event this week, where the central theme was commercial real estate finance and capital markets. Speakers, who included moderator Molly Addington, business acquisition manager for the business banking group of Wells Fargo in San Diego, and speakers Amy Stillwell, a tax senior manager at Moss Adams; Lynn LaChapelle, a senior managing director of capital markets, investment sales and acquisitions at JLL in San Diego; and Kelly Souza, SVP and manager at Wells Fargo, said that the new bill would benefit the commercial real estate industry. Overall, the 2017 tax reform bill provides a reduction in corporate tax, creating a flat rate of 21%, compared to a top rate of 35% pre-reform, and has a blended rate for fiscal taxpayers, according to the speakers' presentation. The reform also increases bonus depreciation to 100% for a qualified property, which includes both new and used properties in an arm's length transaction; and, it increases the amount a tax payer may expense to $1 million, up from $510,000 in 2017. The impact should be significant for all commercial real estate asset classes, and with continued economic growth, should encourage more activity this year. Another change in the new tax reform bill is the addition of a holding period requirement to carried interest tax. The reform adds a hold period of three years for gains on carried interest in an investment. This is a significant change because funds use the carried interest tax to pass net capital gains to general partners and investment managers. While tax reform will likely benefit the market, there is another change to watch. Namely that LIBOR will be phased out as a leading index in the future. In its place, an alternate index will be established called the Secured Overnight Financing Rate, known as SOFR. SOFR will be based on cleared and bilateral repurchase transactions on US Treasuries, using data from $600 to $800 billion in daily repo transactions. It will likely be three to five years until it is ready to act as alternative to LIBOR, but the change is expected to have a minor impact on commercial real estate. In terms of investment activity, value-add deals continue to dominate the market, along with off-market transactions and suburban assets. Stabilized assets in urban markets are seeing cap rates rise from an average of 5.5% to 6%, while suburban assets are seeing cap rates in the 7% range. The CREW San Diego event had 80 attendees at Tom Ham's Lighthouse in San Diego, California. Take a look at the event in the slideshow above.