All Forum Posts by: Peter Lee

Wondering if capital gains from a sale (and capital gains only) could be taken and rolled into a different property via 1031 exchange to avoid the tax hit.  Or does one have to take all the proceeds and roll them into a property(s)?

Thanks

Anyone else have thoughts here?

 That's what I'm curious about whether this fee could turn into a special allocation.  The short term capital loss is from stocks and hoping to offset that with this gain from the restructured acquisition fee.

 200k.  I have some short term capital losses I'd like to offset and the taxes on this amount as ordinary income in my bracket will be hefty.

What do you think if this acquisition fee was restructured to be more like a capital gain, i.e. I sell some portion of the property to the LP instead?

I am in escrow on a commercial building for a value-add deal I am developing and will get an acquisition fee from the LP I am partnering with.  How is this acquisition fee classified tax-wise?  Is it ordinary income?  Or can it be classified as short term capital gains as I have not been in escrow for more than a year.

Any thoughts appreciated.

Thanks guys,

I guess just going to go with 10% discount rate for now and see what happens.  The project is in a good area of Los Angeles, not top tier but neighboring some very expensive real estate so perhaps the discount rate could drop to 8% considering the stronger market. High traffic intersection also.  

Just for clarification, my query isn't about the cash flows, just the discount rate.  

And Bill maybe I'll try the darts method too to mix things up lol

Hi Bill,

Just trying to calculate the NPV of the future cash flows to landlord btw a few LOI's we have, one of which is from Walgreen's. Depending on the discount rate, in some cases, Walgreen's comes out ahead, in other it doesn't.

Our cost of money is a tricky question since there are multiple shareholders with a pretty wide range of equity return expectations.  Very minimal debt on the property.

Hi Joel,

Thanks for responding. I am looking to compare a few leases and see which one works best for us. Depending on how we discount the NOI over a long duration, say 30-40 yrs, we get slightly different results. Just curious as to what people might think of our situation.

I guess one way is to plug in WACC but wondering if there would be ballpark numbers other might work with.

Anyone have opinions on what would be an appropriate discount rate to apply to a lease valuation?

Subject lease is a new, 30 year lease for a 15,000 sf building with Walgreen's as a tenant.

Comments appreciated.