On February 13th, CommericialForum and CCIM teamed up to host roundtable discussions about all the hottest topics in commercial real estate. Seasoned practitioners discussed everything from Qualified Opportunity Zones to the future of retail, and answered attendees’ burning questions about the market and investment opportunities. If you weren’t able to make it, we’ve got you covered. See below for a list of highlights and key learnings from the roundtable discussions. Also, take a look at photos from the event!
“How to Leverage Funding Solutions with Bridge Lending” with
Mark Buford, Lima One Capital
Kramer
ks
Mark Buford, Lima One Capital
- Leveraging debt is a sure-fire way to scale multifamily portfolios.
- Real Estate Brokers are in need of lending partners who have alternative lending products.
- Experienced 1-4 unit residential investors should gain multifamily experience by scaling up to larger, multifamily commercial properties, which will expand their capacity.
- The economic auction trend is on the rise. Economic auctions are where the seller’s decision is based on an analysis of how to maximize price and control the terms of sale.
- Reasons for non-distress auctions include: difficult to value or special use property, existing prospect motivator, controlling the terms of the sale, time of sale is critical, test geographic markets, transparent transaction or risk of losing the listing.
- One size does not fit all. Different auction strategies must be implemented for different situations to produce the best result. Options include live auction with webcast, online only and sealed bid, disclosed minimum bids verses without reserve or with reserve auctions.
- The Qualified Opportunity Zone Program was created to encourage investors to deploy the estimated $6.1 trillion in unrealized capital gains into an Opportunity Zone – an advantage over a traditional 1031 exchange.
- There are 135 Opportunity Zones in Chicago, which offer a way for investors to dedicate all, or a portion, of their capital gains and receive graduated tax incentives tied to long term holdings – up to 100% tax-free if held for 10 years.
- The Opportunity Zone Tax Incentive rewards developers, and those involved in renovations, while also spurring investment, development and job creation in distressed communities.
Kramer
- Retail is not dead it’s just changing faster than ever.
- The retailers that will survive are embracing the internet and providing real value to the consumers.
- There are more stores opening than closing – 300 new and active retailers are expanding in the Chicagoland Market.
ks
- The City of Chicago is experiencing many different zoning changes, including map amendments, plan developments, special uses and variations.
- There’s a possibility that the new mayor or a new alderman will require some process changes.
- Value-add projects present an opportunity to invest in a building at below replacement value and unlock new value by making improvements.
- Value-add projects allow developers to deliver their product to the market faster than ground-up construction.
- Value-add projects provide additional comfort to lenders, as there is often some in-place cash flow that can be leveraged to service debt during the renovation period.
- Retail faces its challenges through online competition, increasing wages and property taxes. This affects retail investors.
- The large malls are adapting with new uses such as apartments, movie theaters, fitness centers, etc., and their values will continue to rise.
- The neighborhood centers with no credit tenants face obstacles unless they are perfectly located at “main & main.” CAP rates are rising for these.
