Commercial Real Estate Finance

Posts Tagged ‘1031 exchange’

In a recent article in the Wall Street Journal it is suggested that while malls and office parks have suffered from the real estate swoon that has been talked to death at this point, there is a sector of commercial real estate that really has not been hit all that hard.  And it isn’t some niche asset class like medical office buildings or student housing, but rather a class of commercial assets defined by their lease structure, rather that the type of tenant they house. Read the rest of this entry »

In times like these, savvy real estate owners all sing a similar tune.  Why build when you can buy for half the cost (or at least significantly below replacement cost)?  And this is a good question.  Yet despite the cyclical nature of real estate, land is bought and sold at all times during the cycle. And this got us to thinking.  If an asset like land, which by nature does not produce income, can continue to change hands, then what are the real drivers of modeling a land deal? How speculative is it really?

That got us thinking even more (we try not to think too much… it makes us tired) about other similar markets for assets of a speculatively priced nature.  Fine art is one particular commodity/asset class that comes to mind. So let’s examine the similarities and differences between pricing for raw land in the realm of real estate, and the pricing of fine art in the world of the aristocrat. Read the rest of this entry »

The Week of August 1-7

- Commercial real estate prices dropped at a record level int he second quarter, according to some RE nerds.

- LandSource restructured $1.2B in debt, raised $250M in cash, and changed its name as it emerged from bankruptcy.

- Could the World Trade Center rebuilding project go on without developer Silverstein?

- The FDIC has officially begun its legacy loans program. Read the rest of this entry »

Back on November 26, 2008, LandAmerica Financial Group, the third largest 1031 exchange intermediary at the time, filed for bankruptcy protection. Its subsidiary, LandAmerica 1031 Exchange Services (LES) filed for voluntary relief under Chapter 11 of the bankruptcy code. At the time, LES was the intermediary for over 450 incomplete transactions.

With a recent ruling by a U.S. Bankruptcy Court in the case of Millard Refrigerated Services vs. LandAmerica 1031 Exchange Services, any seller might now risk having some or all of their money completely out of their control if it was set aside with an intermediary for a tax-deferred exchange.  1031 intermediaries were once known as “safe harbors”, essentially as a safe place to dock one’s proceeds from a sale until they could find another property with which to use the funds to buy, thus completing their 1031 exchange, and protecting their capital gains from being taxed by the federal government. Well apparently, these safe harbors ain’t so safe anymore. Read the rest of this entry »