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Tax Reform Creates Investment Opportunities in Vancouver, BC
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(Posted on Oct 29, 2018 at 03:43PM by Danielle Smyth)
New tax rules have created huge opportunities for investors and companies who work with commercial real estate companies like Marcus & Millichap. It used to be the case that it was ideal for a business entity to own the property where they operated. In many cases, the interest they paid on the location was often tax deductible. Now, however, it’s only possible to deduct interest or loans up to 30 percent of your earnings before taxes, depreciation, and amortization.This means that many companies are now finding it’s more favorable to sell their properties to investment companies and then lease it back over the long term. Generally, a lease is fully deductible over the life of the business arrangement. This will particularly benefit single-tenant retail companies like pharmacies, banks, and restaurants.
There is a lot of opportunity for the industrial sector, too. Thanks in part to the popularity of online sales, many companies are seeking larger industrial production facilities. This can be hugely beneficial for investors. Of course, yields on assets for investors vary widely, and they depend on location and tenant creditworthiness.
If you’re interested in learning more about opportunities for investment throughout Canada, get in touch with Marcus & Millichap's Vancouver office. One of our experienced commercial real estate advisors will be happy to assist you!Â
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