Raleigh April 2021 – Key Take Aways
• Deb Walker of Cherry Bekaert discussed the Employee Retention Credit (ERC), a refundable payroll tax credit that is heftier in 2021 than 2020; she explained how much the credit is, how Eligible Employers are identified, what’s included in the credit and how the credit is received. Employers can now do both PPP and ERC. Cherry Bekaert helps clients with this process.
• Ron Wainwright of Cherry Bekaert reviewed the Biden Tax Impact on CRE. He discussed an increase in tax rates, significant changes for business owners, changes to estate tax, real estate transactions under scrutiny (including 1031, characterization of carried interest, and capital gains), and changes in environmental regulations and opportunity zones. He suggested monitoring the American Jobs Plan Act and the American Family Act.
• Hunter Stewart of Lee & Associates signed a lease with Publix at Ellis Crossings, mixed-use development at intersection of 147/Ellis Rd in Durham, delivering Q4 2022. Scott Hadley says developers are interested in land along I-95; he sees an increase in townhome construction in the Triangle and surrounding areas due to affordability. Marlene Spritzer is busy with Life Sciences. Demand outpaces product; TI, lease terms are complex due to the cost and specialization of labs.
• Kirk Bradley of Lee-Moore Capital Company noted the Triangle’s land rush. Chatham Park and MOSAIC have met with 110 brokers; Lee & Associates is handling MOSAIC’s office/retail leasing and Northwood Landing’s land brokerage. Lease rates increased to $30 for retail plus TICAM, $30 for office for full-service. NW Landing outparcels are $1M per acre for graded pads. Kevin Scanlon received good term sheets for multi-family, harder to secure financing for residential condos.
• David Koehler of Wells Fargo sees strong refinancing activity, pick-up in acquisitions, and supply chain issues impacting clients. Rich Walters sees an uptick in activity across RE asset classes.
• Beth Harrelson of First Horizon is working mostly on older retail properties; borrowers are trying to fix rates long-term before a run-up on rates. Beth sees a lender preference for established retail over new. Spencer Wilson did loan for recent Trinity Place trade; he noted rates have moved up.
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