And reviewing the results of rent control ballot measures across the country.

#1: Less Likely to See Tax Penalties Pushed on SFR Investors

#2: Less Likely to See Expansion of LIHTC

#3: Building Housing on Federal Lands

#4: Bipartisan Push to Remove Regulatory Roadblocks to Housing

#5: Tariffs and Immigration Policy Could Push Up Construction Costs

#6: Potential Extension of Opportunity Zones

#7: What Will Trump Do with Fannie and Freddie?

#8: Apartment Supply Will Almost Certainly Decline (Regardless Who Won)

RSK: Opportunity Zones or OZ`s are still a worthy investment. Here is a list of where the zones are in Madison, WI.

The tax incentive established in 2017, aimed at boosting economic growth and investment in struggling communities, has yielded mixed results. While the program has achieved some successes, it has also faced increasing scrutiny. Now, proposed reforms are set to potentially reshape its trajectory.

VIDEO: Opportunity zones were supposed to encourage investment in low-income communities. But billionaires are building luxury hotels and high-rises, instead...

Ideally situated between east and west Madison, this former Shopko offers 97,931 sf plus a 21,850 sf mezzanine. The property is located in an opportunity zone, zoned CCD (Community Design District). 2 outlots included in the sale provide an excellent development opportunity. The parking ratio is 6.2:1,000 and the location offers high visibility along the Beltline Hwy with 117,000 vehicles daily...

Ideally situated between east and west Madison, this former Shopko offers 97,931 sf plus a 21,850 sf mezzanine. The property is located in an opportunity zone, zoned CDD (Community Design District). Possibility to create 2 outlots provides an excellent development opportunity. The parking ratio is 6.2:1,000 and the location offers high visibility along the Beltline Hwy with 117,000 vehicles daily.

Great Central Beltline Location. Hard to find 1.81 acre commercial site with great linkages to East/West/South Madison and Fitchburg. Located in an Opportunity Zone. Utilities at lot line. Adjacency to Arboretum provides an unique setting for many possible uses.

OpportunityDb’s Jimmy Atkinson interviewed Tony Nitti, real estate tax law expert, CPA, and partner at Withum. He also serves on the editorial advisory board for The Tax Adviser. And he’s a contributor at Forbes.com, where he recently published a thorough primer on the opportunity zones tax incentive.

Click here to listen as Tony and Jimmy dissect the basics of the opportunity zones tax code, explore some unintended consequences and loopholes introduced by the proposed IRS regulations, and discuss who the actual drivers behind most opportunity zone investments will be...

Here

I have been hitting #CRE pretty hard lately and have taken some serious shots at #CRE media, brokers, startups, old people, young people, their egos and practices, the process of, the general state of, and so on and so on. And there has been some pushback, with that there have also been those that are happy that I “call out” #CRE for all of its pains and ills. I have understood since day one the way to win or influence an audience is to entertain, inform, and educate. It’s easy to see why that works, it’s generally what we all want. How hard is it really to come up with a Top 10 listicle post and push it out once a month? You see them all the time, Top 10 Ways To Improve, Top 10 Mind Blowing, Top 10 People, Top 10 Most, Top 10 Greatest. And for some even doing that is too much time and effort...

Opportunity Zones

A clear picture of the opportunity zone program remains out of reach, but more information trickled out of the Internal Revenue Service at the end of October.

The IRS released a draft version of Form 8996, the filing document for qualified opportunity funds and their investors, containing additional requirements for reporting opportunity zone-related income, Bloomberg Tax reports. 

If the current version is finalized, Form 8996 would require a QOF to disclose how it is structured, as well as all of its assets and their respective census tracts. The census tract, employer identification number and assets will be required for any qualified opportunity zone businesses that are listed among a QOF`s assets...

In the nearly two years since the passage of a federal program aimed to spur economic development in low-income and distressed neighborhoods, there have been roughly 30,200 commercial real estate transactions in the designated opportunity zones in California. 

In the two years prior to the program, there were more than 32,200 commercial real estate transactions in the same zones in the state, according to CRE data site Reonomy...

Two years after the opportunity zone program became law, the final round of regulations about how they will be implemented has been released to the public.

The Treasury Department and the IRS published the 544-page document Thursday afternoon with a number of substantial changes and additions from previous iterations of guidance. Treasury Secretary Steven Mnuchin said in a statement that the new regulations will provide "clarity and certainty" to investors that will allow for more capital to flow into opportunity zones....

On Dec. 31, when the rest of the world is getting ready to usher in the new decade, opportunity zone investors will face an important deadline: the last day on which they can make an investment in a qualified opportunity fund and get the full benefit of the new program.

Created as a vehicle in which investment flows to opportunity zones to reap the highest possible tax benefit on deferred capital gains and spur growth, the program has set timelines...

Budget and value hotels are poised to see a boost in investments via the opportunity zones program, experts told Bisnow last week.

G6 Hospitality Vice President of Franchise Development Jeff Stephenson said that in the past year, he has already heard from more than two dozen investors and current motel owners exploring ways to take advantage of the federal tax program. G6 Hospitality oversees more than 1,400 Motel 6 and Studio 6 extended-stay brands in the U.S. and Canada...

With the unveiling of the highly anticipated second set of proposed regulations related to opportunity zones, 2019 is going to be a big year for investors wanting to take advantage of the much-hyped federal program.

By Wednesday afternoon, commercial real estate professionals, investors and others were poring over the 169-page regulations released by the IRS and the U.S. Department of the Treasury.

"From what we’ve seen so far, this is a positive step,” EIG President and CEO John Lettieri said. “This removes a lot of the obvious impediments that have kept capital on the sidelines to date … I think it’s going to free up a lot of capital."..

It seems that one of the lingering questions regarding opportunity zones has been answered, eliminating a possible avenue of investment.

In a hearing of the Senate`s Appropriations Committee, Treasury Secretary Steven Mnuchin "advised against" the use of qualified opportunity funds to invest in cannabis businesses, Bloomberg Tax reports. Mnuchin said the cannabis industry doesn`t align with the spirit of the legislation that created opportunity zones.

The law in question, the Tax Cuts and Jobs Act of 2017, banned the use of opportunity funds to invest in what the U.S. Tax Code defines as "sin businesses": liquor stores, casinos, racetracks, golf clubs, tanning salons and massage parlors, among others. Because cannabis is still illegal under federal law, there was no provision for its inclusion on the list.

Opportunity zones have generated nationwide excitement since they were introduced, but a maxim has been repeated ad nauseum to temper that enthusiasm: An opportunity zone doesn`t turn a bad deal into a good one.

While the capital gains tax benefits only apply to equity investments, a real estate deal done without debt is a rarity. For commercial real estate lenders, the maxim holds true — opportunity zones don`t change the fundamentals of a deal...

For the past couple of years, opportunity zones have been a rolling thundercloud of interest, excitement and debate hovering over the real estate industry. But the lightning it promised has yet to strike. 

Since the opportunity zone program was introduced, the flurry of investment activity that its architects foretold hasn’t materialized. In its place, an ecosystem of events, media, marketing and paid consultation has arisen and flourished — an industry based on talking about opportunity zones rather than investing in them...

Despite his location in one of the country`s hottest real estate markets, Urban Catalyst Managing Partner Erik Hayden employed a wait-and-see approach to San Jose`s opportunity zones.

Even after having set up Silicon Valley`s only multi-asset fund dedicated to designated properties, he waited.

As Hayden recognizes, stories similar to his occurred in markets across the country, with investors claiming a lack of clarity stalling any kind of large-scale benefits opportunity zone, which proponents promised would come to distressed communities...

What are they?

Congress created the federal Qualified Opportunity Zone (“QOZ”) program in the 2017 “Tax Cuts and Jobs Act” to encourage economic growth in underserved communities through tax benefits to investors. U.S. states and territories, including Washington, DC, nominated areas (by census tract) to be designated as QOZs in 2018, and the IRS and Treasury finalized the designations that year. This program presents opportunities for real estate investment and development in distressed communities.

How does the program work?

Forming an Opportunity Fund:

Fulfilling the “90% Assets” Requirement:

QOZ Business Property Requirements:

What are the tax benefits?

For capital gains reinvested into an O Fund:

For future capital gains on investments accrued while in an O Fund:

Goodbye 2018, hello 2019! As the new year approaches, Bisnow spoke with several industry execs, researchers and economists to uncover the major trends expected to dominate the commercial real estate industry in the coming year. From the rise of opportunity zones to a slowdown in industrial absorption, these are 18 trends experts forecast for 2019.

1. Opportunity Zones Craze To Persist...

2. Industrial Boom To Continue Thanks To High Demand From E-Commerce Players, Though A Few Headwinds May Surface...

3. Federal Reserve To Gradually Boost Interest Rates Due To The Strength Of The Economy...

4. Online Retailers Will Continue To Open Brick-And-Mortar Stores, Further Validating That Physical Retail Is Far From Dead...

5. Industry To Continue Reading The Tea Leaves To Predict The Next Downturn...

Opportunity zones have become the darling of real estate investors since their adoption last year, but the still-under-the-radar program is poised to receive a lot more attention, and possibly scrutiny, after it was promoted in the Oval Office last week.

President Donald Trump`s signing of an executive order to push more federal resources into the Opportunity Zone program is a step in the right direction and could bolster the little known tax incentive program and the distressed communities that benefit from investments, experts said. ...

Opportunity zones and indoor farms are both new frontiers for investment, and one company is seeking to combine them.

Zale Tabakman has developed a concept for an indoor farm that grows greens, herbs and vegetables using modular construction, called Local Grown Salads. One LGS farm would be 15K SF and fabricated off-site almost entirely — even the HVAC system, often one of the costliest elements of construction. All the site needs is for the walls, floor and ceiling to be sealed and the water and power to be connected to the grid...

The Tax Cuts and Jobs Act of 2017 sent ripples through commercial real estate, thanks largely to the revelation of opportunity zones. But a few TCJA tax code changes could be even more influential. One that has tax professionals abuzz is bonus depreciation, which can save large amounts of money no matter the project.

Bonus depreciation allows taxpayers to write off a portion of an asset in the year it was acquired as long as that asset has a sufficiently short life span. Personal property like plumbing systems, for instance, have a shorter life span than a building structure itself, and can be written off. The TCJA doubled bonus depreciation on eligible assets, from 50% all the way to 100%...

While the tax benefits of Section 1031 exchanges in commercial real estate are well-known to most practitioners, the new qualified opportunity zone program now offers another approach to deferring or eliminating taxable gain. Qualified opportunity zone investments in commercial property can be similar to 1031 exchanges, to defer taxes, but the differences in tax implications can be significant when there is a disposition of the property. Plus, the lack of well-established case law, regulations, and other guidance for investments in qualified opportunity zones creates risks — risks that should be considered carefully before investing in opportunity zones. Join CCIM Institute and experts Dr. Mark Lee Levine, CCIM and Libbi Levine Segev, JD, LLM to hear how you can best leverage both options and tackle the unique challenges of each. Of course, there are other alternatives that will be examined, beyond undertaking the use of an Opportunity Fund or a 1031 transaction...

For all the intrigue that opportunity zones have generated, they have also come with their fair share of concern. But as the delay in final regulations drags on, it may also solve one of the program`s problems by accident.

The most talked-about facet of opportunity zone investing so far has been the 15% discount on capital gains invested in the zones if held for seven years, but that only applies for investments made by the end of this year. Some movement is already happening, like Plymouth Group’s purchase of the former Budd Co. factory where Bisnow held its Philadelphia Opportunity Zones and Capital Markets event last week...

U.S. Sen. Cory Booker (D-N.J.), Rep. Emanuel Cleaver (D-Mo.), and Rep. Ron Kind (D-Wis.) are calling on the Treasury Department to take a close look at the process by which opportunity zones have been created.

The move comes after reports of zones created that do not meet the eligibility criteria. One in particular, in Downtown Detroit, purportedly benefits properties owned by billionaire Dan Gilbert, chairman of Quicken Loans and owner of the Cleveland Cavaliers, ProPublica reports. Gilbert previously donated $750K to the inaugural fund of President Donald Trump.

Development Matters

A key deadline is approaching for investors looking to maximize the benefits of the opportunity zone program, and fund managers are preparing to receive an influx of capital in the coming months.

The opportunity zone program, passed into law in late 2017, comes with a series of incentives for investors to finance real estate projects and businesses in census tracts designated as needing investment. While the program will still provide benefits to investors for several more years, one of its incentives has a deadline for investors to place money into funds by the end of this year....

Biden now has better shot at changing taxes, Opportunity Zones

• Tax deductions and rates...
• 1031 exchanges...
• Opportunity Zones...
• Next round of stimulus...
• Federal eviction moratorium...

Changes to opportunity zones, affordable housing, 1031 exchanges and SALT, plus another stab at Infrastructure Week

One observer thinks there is a chance the program could be rolled into a massive stimulus package.

Overview of final regulations and practical insights

Tour Route Map (Link to PDF)

To help highlight these developing trends and what they mean for the agent or the investor, Forbes Real Estate Council members discuss some of the developing real estate trends likely coming to the industry in the next few years and how those changes would impact the average investor or agent...

1. Co-Working Space As A Shared Amenity...
2. Growing Sense Of Community...
3. Property Tech And AI Disrupting The Industry...
4. Rise Of Opportunity Zones...
5. Millennials Will Start Buying Houses...
6. Spread Of Shared Living Spaces...
7. Short-Term Rentals At Higher Rates...
8. Rent Control With Upzoning Measures...
9. Increased Use Of Freelance Workers...
10. Build-To-Rent Boom...
11. Modular Buildings Reshaping Construction...

An effective program to address problems in low-income communities already exists — without creating more tax breaks for the wealthy

Most investors have focused on the real estate investment side of the federal opportunity zone program, but many are missing out on a part of the program that could generate far greater returns, experts said. 

The returns on investing in a high potential company that sets up as a qualified opportunity zone business, or QOZB, and starts or relocates in one of the designated 8,700 opportunity zones could be 10 times more profitable than flipping commercial real estate, The Pearl Fund founder and Managing Partner Brian Phillips said.

TODAY - TUESDAY 8/27/2019

This is our first in our weekly series of live-streaming shows, focused on Opportunity Zones. Neal Bawa will serve as our master or arms and talk about, “The Five Perils of Opportunity Zones”. To attend the live-stream, ask questions, leave comments and participate in the conversation, click the following links at 2:45, PM on August 27, 2019:

YouTube https://youtu.be/v6HPBHJodDs

Facebook https://www.facebook.com/creradioandtv/

Twitter/Periscope https://www.periscope.tv/CREradio

AT&T will sell 37 real estate properties this fall through Williams & Williams, a specialist in global live and interactive real estate auctions. The assets are located in nine states and are selling in a combination of on-site and online auctions organised between 16 and 25 October. Williams & Williams will conduct the auctions in conjunction with strategic broker partner JLL.

AT&T is offering each property separately for auction and most will come with leaseback deals in place. The properties include industrial and office, and several have potential for significant redevelopment. The properties are located in regional markets in AL, FL, IL, IN, LA, GA, OH, SC, TN and WI. Two properties in Opportunity Zones are in Marion, AL and Euclid, OH...

https://www.auctionnetwork.com/search/wisconsin

Wisconsin has 120 designated opportunity zones, all of which are low-income communities. Wisconsin did not designate any eligible non-low-income contiguous tracts as opportunity zones.

Urban vs. Rural

Wisconsin’s opportunity zone urban-to-rural ratio is nearly identical to the statewide ratio. Among Wisconsin’s 120 opportunity zones, 71 percent are urban, and 29 percent are rural.

The hottest pitch in real estate is the opportunity zone, one of 8,700 geographic areas in the United States in need of economic investment.

Opportunity zones encompass three enticements that make real estate attractive to professional investors: the promise of change in underserved areas, the chance of an outsize investment return and the opportunity for a huge tax break...

Let’s be honest: Real estate valuations are very high today. But worries of an impending housing crash are premature. There are many trends that could continue to drive real estate values. A millennial middle class hungry for the independence of owning a home and a reasonable economy outweigh housing indicators that might signal a downturn is imminent. That doesn’t mean U.S. real estate markets are not in a pivotal phase. In fact, 2019 is poised to create significant opportunity for those who understand the five significant economic and demographic trends driving the market. Let’s consider the following five trends:

1. Rise in Interest Rates...

2. Millennial Homebuyers Enter The Market...

3. Growth Of Secondary Cities...

4. Housing Affordability...

5. Impact of Opportunity Zone Funds...

According to the 2017 Distressed Communities Index by the Economic Innovation Group, one in six Americans, approximately 17 percent of the population, live in economically-distressed communities, and the average state has 15.2 percent of its population living in these struggling areas.

The new Opportunity Zone (OZ) tax incentive was created as part of the 2017 Tax Cuts and Jobs Act to encourage investment in low- to moderate-income communities across the country through tax benefits, such as deferring tax on capital gains by making an investment in any of the designated zones. So far, 8,761 communities covering all 50 states, including the five U.S. territories, have been designated as opportunity zones, and they will keep this status for 10 years....

A RealCrowd audiocast

Listen to the audiocast

The 2017 Tax Cuts and Jobs Act created a new investment vehicle intended to stimulate economic growth in distressed communities. Qualified opportunity zones (QOZs) are pre-selected areas around the United States where investors can hold capital gains for preferential tax treatment while struggling communities can benefit from an influx of development and funding.

There was more to 2018 than Amazon ... sort of.

A big chunk of Bisnow`s most-clicked stories of 2018 were related to HQ2, but our readers were also particularly interested in open offices, housing affordability, Chick-fil-A and lawsuits. Check out the 20 stories that most resonated with Bisnow readers this year.

20) Cushman & Wakefield Reportedly Fired Peter Hennessy Over Angry Email He Wrote To Regional CEO

19) Fired Colliers Broker Says Mattress Firm Execs `Weaponized` Real Estate, Encouraged Insider Deals

18) Hotels And Retailers Hit Hard By California Housing Crisis` Ripple Effect

17) CoStar Starts Going After Password-Sharing Users In Latest Legal Blitz

16) Fed Up With Vacant Storefronts, Residents Force Cities To Punish Retail Landlords

15) Former CBRE Executive Accused Of Stealing Trade Secrets To Start Competing Firm

14) Things To Know About The New Opportunity Zone Guidelines

13) 10 Markets That Will Be Flooded With New Apartment Supply In 2018

12) Middle-Class Misery: Housing Crisis Hitting Cities, Working Americans Harder Than Ever Before

11) REPORT: Amazon Is Splitting HQ2 Between 2 East Coast Cities

10) Bay Area Real Estate Leaders Among 5 Killed In Santa Ana Plane Crash

9) Cushman & Wakefield Embroiled In Two Lawsuits Involving Former High-Ranking Execs

8) What Happens When A Whole Foods Closes? A D.C. Neighborhood Is Painfully Finding Out

7) `Everybody Wants Chick-fil-A`: Why The Chicken Chain Is Dominating Fast Food

6) Amazon Job Posting In D.C. A Potential HQ2 Signal

5) Final Verdict: Workers Hate Open Offices And They Reduce Productivity

4) Starwood CEO Barry Sternlicht: `The Endgame For Amazon Is To Wipe Out Main Streets Of America`

3) LOIS WEISS: The HQ2 Search Is A Sham. Jeff Bezos Already Knows The Winner.

2) The Real Estate Rankings Of Amazon’s 19 U.S. HQ2 Finalists

1) JLL Managing Director Loses Job After Arrest For Assault, Burglary

See Also: Editors` Choice: The Very Best Bisnow Stories Of 2018

It goes without saying that not all opportunity zones are created equal or present the same investment opportunities.

As the Qualified Opportunity Zone tax program gains national attention from investors looking to deploy billions in capital gains into those areas, sources tell Bisnow the designated areas stand to benefit greatly from opportunity zone-friendly policies enacted at the federal, state and municipal level to further lure investment where it is most needed...

As high-net-worth (HNW) investors zone in on commercial real estate opportunities for 2019, Opportunity Zones, multifamily, marijuana, retail and industrial are emerging as some of the key areas to watch.

Real estate investments made next year by HNW investors should be weighed against rising interest rates and the prolonged economic expansion, according to Doug Brien, co-founder and CEO of Oakland, Calif.-based Mynd Property Management, which specializes in multifamily assets.

“For deals to make sense, investors will need to make sure cap rates remain high enough to balance out rising interest rates,” Brien says. “In my opinion, a long-time horizon should be incorporated into any investor’s strategy if they’re acquiring properties at such a late stage in this rising interest rate environment.”...

Commercial real estate owners, developers, brokers and investment managers have a variety of concerns about the new Opportunity Zone program that gives a tax break to investors who invest through an opportunity fund into a designated opportunity zone. More than 200 of them shared those concerns in Bisnow`s recent survey about the program.

One survey participant called the program “gentrification on steroids.” 

Another respondent said the nuances of the program — even with a new round of guidance from the U.S. Department of the Treasury — are still confusing and may turn off investors...

Private investment into economically disadvantaged “Opportunity Zones” could be the key to new growth in Greater Madison.

The program, part of the Tax Cuts and Jobs Act President Donald Trump signed into law in December, gives large tax breaks to investors who place capital gains into funds that invest in opportunity zones, a set of largely low-income areas across the country. Local governments nominated their opportunity zone census tracts in April, and in recent months, several funds have been set up specifically targeting opportunity zones...

The Tax Cuts and Jobs Act of 2017 (TCJA) includes a new tax incentive designed to steer long-term capital investments into economically distressed communities. Investments in these areas, called Opportunity Zones, are eligible for the temporary deferral and potential exclusion of capital gains.

Tax benefits of investing in an Opportunity Zone

The TCJA authorizes each state to nominate up to 25 percent of its low-income communities as qualified Opportunity Zones. The final list of designated census tracts was released by the U.S. Department of Treasury on June 14, 2018.

Temporary deferral of gain...

Permanent exclusion of gain...