I don't claim to know it all, but when I read JLL reports projecting increased growth and the benefits of the fiscal cliff, I have to wonder if as an industry we only see the trees and not the forest. Which also happens to be on fire.
Core markets (D.C., Chicago, L.A., New York, Atlanta, San Fransisco, etc) that are seats of industry and goverment will almost always do well. And there are smaller markets, like Savannah, that have the real estate throttle wide open.
The problem is that articles glossing over the fiscal cliff, Patient Protection and Affordable Care act, Up-Eurs Zone volitility, etc. make a key error. They presume that decreased uncertainty will equal increased economic growth. Such is not the case.
In his acceptance speech Obama did reduce uncertainty and make some very specific tax proposals. In particular, he promised to:
In unrelated news, inflation has ticked up, jobless claims are up, poverty rates are spiking.
How can going over "the fiscal cliff" possibly help commercial real estate or the economy as a whole?
The authors gush "Continued low interest rates will prompt people to buy!" True, but lending standards are still tight because banks don't want to lend money if they can't make a decent profit. They'd rather keep the cash in excess reserves for the Fed to pay them interest on.
"Less uncertainty in healthcare means more real estate deals!" I've lost two medical office deals due to the new certainty of taxes and regulation in the last month.
Let's get real about the fiscal cliff: there won't be one. Obama owns this budget deficit now. He must act on it or his legacy will be mud. When has Congress ever had a problem compromising to let federal spending continue?
A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga
Core markets (D.C., Chicago, L.A., New York, Atlanta, San Fransisco, etc) that are seats of industry and goverment will almost always do well. And there are smaller markets, like Savannah, that have the real estate throttle wide open.
The problem is that articles glossing over the fiscal cliff, Patient Protection and Affordable Care act, Up-Eurs Zone volitility, etc. make a key error. They presume that decreased uncertainty will equal increased economic growth. Such is not the case.
In his acceptance speech Obama did reduce uncertainty and make some very specific tax proposals. In particular, he promised to:
- Raise the top marginal income tax rate to 39.6%.
- Raise the top short-term capital gains tax rate to 39.6%.
- Raise the top long-term capital gains tax rate from 15% to 20%.
- Raise the top tax on dividends from 15% to 39.6%. There will also be an additional 3.8% tax on dividends as of January 1.
- Replace the alternative minimum tax with the "Buffett Rule." That means the highest income-earners will pay a minimum 30% tax rate on wages, interest, dividends and capital gains.
- Raise the estate tax rate from 35% to 45%.
In unrelated news, inflation has ticked up, jobless claims are up, poverty rates are spiking.
How can going over "the fiscal cliff" possibly help commercial real estate or the economy as a whole?
The authors gush "Continued low interest rates will prompt people to buy!" True, but lending standards are still tight because banks don't want to lend money if they can't make a decent profit. They'd rather keep the cash in excess reserves for the Fed to pay them interest on.
"Less uncertainty in healthcare means more real estate deals!" I've lost two medical office deals due to the new certainty of taxes and regulation in the last month.
Let's get real about the fiscal cliff: there won't be one. Obama owns this budget deficit now. He must act on it or his legacy will be mud. When has Congress ever had a problem compromising to let federal spending continue?
A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga
