Hello!
Welcome to 2021! I believe this year will be full of opportunity, but only if you're actively looking for it. I'm working to bring you deals that fit your requirements regularly, keep an eye out for them.
Have a project you're kicking off in the new year? Reach out and let's see how I can help.
Overall Market
- National uncertainty is keeping many investors and property owners from making decisions this month. On the flip side, others are looking at the strategic long-term, sticking to a 5+ year plan and moving projects forward.
- Capital gains tax proposals at both the national and WA state level, if passed, mean gains could be taxed all the way up to 48.6%. That makes the current 15-20% look good, right? In addition, national proposed changes could eliminate the step-up in basis, impacting the ability to pass real estate to heirs without tax. Two key takeaways:
- Now is a great time to sell your highly appreciated asset and enjoy the gains you’ve accumulated over the years. Maybe it's time to take the 15-20% capital gains hit?
- If a change like this was passed into law, it will negatively impact deal flow, so be prepared for this moving forward. Deals are already hard to come by, and some experts are saying it could get worse.
- The TriCity Association of Realtors published their year-over-year housing report here. Since 2015, average home sale prices have grown +9% each year. How does this impact commercial real estate? As home prices climb to record highs, more people will look to renting instead of buying. This is a good sign for developers and landlords at the top end of the rental market.
My Listings
- 707 Parkway. Prime location downtown Richland. Fit for multiple uses. (CBA #, PACMLS #)
- Upcoming: multi-family ranging from 4 to 13 units throughout the Columbia Basin.
- Want to be the first to get a direct look at these opportunities? Reply to this email and tell me what you’re looking for: number of units, maximum acquisition price, your return metric and hurdles, business plan and location. Or give me a call to discuss.
Multi-family
- In November 2020 the owners I spoke with reported very little impact to rent payments. In the last 3 months, that has taken a turn for the worse. Property owners are seeing dips in payments and have been forced to provide rent workouts during the eviction moratorium. This is in line with national trends reported by NMHC.
- Do you have non-paying tenants today? This article provides potential solutions and ideas for workarounds. One that stood out to me: ask your tenant to voluntary relocate to one of your less expensive properties. Make sure you know all your options if a tenant stops paying rent.
- Regardless of national volatility, Eastern WA is a hot market for small multi-family. Many investors are looking to place capital and I’m not certain how long this trend will last. Some 1970’s-built 4-plexes are selling for more than $500k. Want to know what your property is worth? Reply to this email for a free property analysis and valuation.
- In a year where you may not budget any rent increases, your property may be in need of improvements. Delaying these projects because you can’t push rents can pose larger issues in the years to come. Instead, focus on improvements that decrease expenses and look to your neighbors for inspiration. Want to know the top 4 improvements multi-family owners are making in the Tri-Cities? Read more in this article I wrote on Paragon's blog.
- Similar to the above CapEx projects, now is a good time to think about how you can increase operational efficiency and increase collections on paying tenants. This article from Motley Fool does a great job of highlighting a few opportunities to leverage new tech to help on management efficiency. One that stood out to me: rent payment rewards programs. What better time than now to provide extra incentive for tenants to pay rent?
Industrial
- Did you know there is 93M SF of industrial space across just 333 properties in the Tri-Cities? That high SF is driven by the food processing industry in town. I recently completed an overview of Tri-Cities industrial market. Want a copy? Reply to this email and I’ll send it your way.
- Even at a total market of 93M SF, only 16.5k SF is in construction. Interested in developing projects to fill that small pipeline? You know the drill, reply and we will kick off the process of identifying a great site for your next development.
Development
- The WA Department of Natural Resources made official announcement that they are going to sell and lease 300+ acres of raw land in Richland. The lots include high-density residential for sale and commercial for ground lease. I've been talking to the project coordinator regularly about these parcels. Reach out to learn more.
Ready to move past the national news to market fundamentals and start a new project here in the Tri-Cities? Email me today about your property needs so we can get to work.
Best,
Mason Fiascone
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