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With the first public draft of the Republican plan for tax reform having dropped hours before the meeting, the Commercial Real Estate Legislation & Regulatory Advisory Board was buzzing with members eager to hear NAR's take. 2017 Chair Michael Schoonover, ALC, GREEN, and Vice Chair K. Teya Moore, CCIM, discussed the uncertain state of 1031 Exchanges, which are not covered specifically in the plan for tax reform, highlighting the importance of RPAC in continuing to advocate for their preservation.
Featured speaker Jeff Carter, Founding Partner of West Loop Ventures, shared his perspective on commercial real estate investment trends and the future of commercial tech. Carter argued the conventional wisdom around technology as a risky investment is misguided. He feels investment in early-stage commercial real estate technology is very rewarding, claiming investors should bet on the jockey and not the horse: the people with ideas will produce the tech and “you can always change jockeys later.”
Evan Liddiard, NAR Senior Policy Representative, delivered his take on the tax reform plan, noting many details will change and pointing out there were, nonetheless, larger outcomes that could manifest should the plan pass.
Two potential positive outcomes of the proposal are: a cut in the tax rate for business income including pass-through entities; immediate expensing of equipment and buildings which can be deducted the first year they are in service. Negative outcomes are: limitations on deductibility of interest expense; the possible elimination or repeal of 1031.
“I walked away with more information about the commercial legislative process, and more importantly insightful analysis on how it would affect my business and clients.” –Chad Gleason, CCIM
Jeff Carter's Top 5 Investment Trends:
1. Software is eating the world.
2. Everything will be unbundled.
3. Network beats hierarchy → If there are a thousand guys like me then we can crush Goldman and we have.
4. Everyone is a node on a network → Everyone is an opt in node or an opt out node. I tweet and I generate content for Twitter and it creates content for me.
5. Government cannot keep up.
Jeff Carter's Themes for Future Investment:
1. BlockChain is a trust network.
2. Keeping security is critical.
3. Using public data from databases and sensors.
4. Machines and robots with AI will proliferate
5. Artificial Intelligence will do tasks.
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