SVN Miller Commercial Real Estate Forum March 23, 2018

The Essence of Commercial Real Estate

The SVN Miller Commercial Real Estate Forum has taken place each year at Salisbury University since 2009. Each year people from around the Eastern Shore in the industry come to Salisbury for this one of a kind event. The point of this conference is to meet people in the local real estate industry, mastermind on how to grow the community, and listen to the economic trends of the Eastern Shore, State of Maryland, and the Country.

Major Topics of Conversation

Keynote Speech – Mayor Jacob R. Day

The keynote speaker was the Mayor Jacob Day of the City of Salisbury. The summary of the Mayor’s speech is that, he has confidence in the local economy. The current demographic trends show an average age in the City of Salisbury decreasing. This is due to an influx of college students staying the area after graduating from Salisbury University. This is beneficial for business growth in the local economy and signifies retention of young talent.

What is Salisbury Missing? – Anirban Basu, Sage Policy Group, Inc.

For the big firms, investment in a place like Salisbury isn’t possible because it’s in Maryland.  Companies don’t choose Maryland first because of corporate tax rates. They would rather do large term capital investments in other states.

Opportunity Zones – Where does the Opportunity Lie?

In the 2017 tax reform deal, the Opportunity Zone Funds were created as a new class of investment vehicle. These funds aim to responsibly drive capital into rural and low-income urban communities. Opportunity Zones will be designated areas throughout the country. The program will allow investors in the United States to receive temporary tax deferral when unrealized capital gains are reinvested into Opportunity Zone Funds for no less than five (5) years. An example of this is to cash out of the stock market, instead of paying capital gains on your profit, you could purchase an apartment complex and defer your tax liability. For more information on this speak to your accountant.

Confidence in the Market

Most people are very confident in the market right now. For example, lodging construction is up 67% in the last three (3) years. After listening to the thoughts of Anirban Basu, the featured speaker, and meditating on this phenomenon I came to understand that demand in big cities throughout the US is in hot demand of foreign investors. The amount of construction activity is directly correlated to the massive increase in expected returns of real estate developers. Right now commercial real estate is selling very fast at low cap rates. This is a signifier of a seller’s market.

Infrastructure Investment – Public Private Partnerships

Public-Private Partnerships can be a big influence for infrastructure improvement. Corporations have a huge amount of money and the public has benefits to complement the businesses. Since the public tends to use money less effectively than businesses, they both have something to contribute. Private companies could profit from infrastructure improvement by return on equity investment or through consulting agreements. There is a lack of infrastructure development in Maryland and other states.

All in All

            When you have the opportunity to learn from others, take it. When you have the opportunity to teach others, give it. Learning from other people and creating relationships is the cornerstone of a community. The real estate industry on the Eastern Shore is welcoming, growing, and community oriented. Not only are we a good place to invest, but we’re a good place to meet quality people that love their community.

Read More on SVN Miller’s website https://svnmiller.com/cre-forum/

Watch SVN’s CRE Form Video Here! https://youtu.be/r6VWoT4Efb8

 

By Ryan Daniher

Development Associate at Green Street Housing LLC

Member of Salisbury Sustainability Advisory Committee

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