You’re probably wondering, why does this broker keep tweeting about the unemployment rate every month, whats it got to do with commercial real estate? Well, the answer (to your question) is simple. The answer to obtaining favorable unemployment numbers in order to get the economy back on a healthy track and moving forward, not so much. If someone has a job, they’re more likely to go out and rent or buy a larger piece of real estate than move back in with their parents. Companies that grow, tend to hire more employees and seek to increase their office or retail space. So, how do we create jobs? Well, one way towards job creation is to lower taxes. Any tax implementation or the fear of a higher tax implementation will stun job growth. This ultimately will result in some companies downsizing the number of employees and the square footage used by said company.
Our current commercial real estate market fundamentals are threatened. There is uncertainty in the marketplace today due to many reasons. Hence, the shortage of supply of real estate in the market today. One reason for uncertainty in the current marketplace is the message the Obama Administration is conveying that capital gains tax rates will not remain the same(15%) and will go up to at least 23.8% beginning on January 1, 2013. Some sources say that the capital gains tax will go up to at least 33.8%. One way to spur the economy and job growth is to cut taxes. The Obama Administration can create jobs by rebuilding infrastructure throughout New York City. The bridges, tunnels, and roads can use some major updating or rebuilding along with the creation of more bridges, tunnels, and roads which would ease traffic due to the increase in New York Citys’ population. The building and rebuilding of infrastructure would put thousands to work for the next few years. Job creation always results in consumer spending. Let’s hope that the Obama Administration acts wisely and helps bring certainty back to the real estate market in a timely fashion.
Alex S. Isak
Director of Sales | Upper West Side
Goldenwood Property Advisors, Inc.