The Future of Commercial Real Estate

Although grim supply-demand unevenness have continued to pestilence real estate markets into the 2000s in many areas, the mobility of capital in existing stylish financial markets is heartening to real estate developers. During the early years of the Reagan administration, deregulation of financial institutions increased the supply accessibility of funds, and thrifts added their funds to an already increasing cadre of lenders. At the same time, the Economic Recovery and Tax Act of 1981 (ERTA) gave investors increased tax “write-off” through accelerated depreciation, reduced capital gains taxes to 20 percent, and allowed other income to be wrapped in cotton wool with real estate “losses.” In short, more fairness and debt backing was available for real estate speculation than ever before.