Industrial Spotlight May 2018

New Tax Rules and Elevated Industrial Property Values
Accentuate Benefits of Sale-Leaseback For Many Companies

Sale-leaseback’s are on the rise as businesses that operate out of property they own consider the implications of the new tax law. Tax reform restricts owner-user companies’ ability to deduct mortgage interest, making leases more favorable from a tax perspective. Owners also have the opportunity to capitalize on the currently elevated property performance and asset values, unlocking capital to fund expansion.

Key Findings:

  • Industrial property fundamentals have strengthened significantly, with vacancy and rents expected to reach record levels in 2018, despite heightened construction.
  • Under the new tax rules companies with gross receipts over $25 million can only deduct total net interest costs up to 30% of earnings before interest, taxes, depreciation and amortization.
  • Smaller assets in the $1 million to $5 million range are particularly popular among local private investors.


DOWNLOAD FULL REPORT: Industrial Spotlight Report May 2018