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In the latest episode of Peachtree Point of View, CEO Greg Friedman sits down with Tim Witt, a seasoned expert with over 30 years’ experience, to explore tax-efficient investment strategies in commercial real estate. This insightful discussion explores various strategies that can potentially help investors preserve and grow their wealth while minimizing tax exposure.

Tim, who leads Peachtree's DST (Delaware Statutory Trust) strategy, brings a wealth of knowledge from his background as a Wall Street Journal All-Star Analyst and his extensive experience with alternative investments. During the conversation, he breaks down complex investment structures into digestible insights that investors will find valuable.

The episode covers three major tax-advantaged investment strategies:

Delaware Statutory Trusts (DST)
Tim explains how DSTs work as a powerful tool for commercial real estate investors looking to transition from active to passive ownership while deferring capital gains taxes through 1031 exchanges. He shares real examples of how investors can potentially maintain their wealth-building momentum and reduce the impact of taxes, which can otherwise take 30-40% of their proceeds upon property sale.

Opportunity Zones
The opportunity zone program was created by the Tax Cuts and Jobs Act of 2017. Greg and Tim explore how these investments may offer both tax deferral and tax-free appreciation when held for ten years. They share Peachtree's success story of developing a hotel in downtown Phoenix and discuss their current project in Maui, highlighting how they first identified opportunities that make sense regardless of potential tax benefits.

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Bonus Depreciation
Finally, they examine bonus depreciation strategies and their potential revival with upcoming tax legislation, offering insights into how different types of investors might benefit from these programs. 

Perhaps most valuable is their candid discussion about the pitfalls of tax-driven investment decisions. Both experts emphasize the importance of evaluating investments on their fundamental merits first, with tax benefits serving as an enhancement rather than the primary motivation.

For investors looking to optimize their real estate investment strategy while managing tax exposure, this episode provides actionable insights from two industry veterans. Whether you're considering a transition from active to passive real estate ownership, exploring Opportunity Zone investments, or simply seeking to better understand tax-efficient investment strategies, this conversation offers valuable perspective and practical advice. 

Listen to the full episode of Peachtree Point of View to dive deeper into these strategies and learn how they might fit into your investment portfolio. Available now on your favorite podcast platform.

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_{Please note that this podcast does not provide legal or tax advice. Before investing in any tax-advantaged program, consult with your CPA or a tax attorney to ensure you are eligible to benefit from the program's tax advantages.}

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In this episode of Peachtree's Point of View, Greg Friedman welcomes David Bitner, Global Head of Research and Executive Managing Director at Newmark, for an in-depth discussion on the commercial real estate landscape. They cover key economic and market trends, including the impact of sustained higher interest rates, the evolving debt market, and investment opportunities in a rapidly shifting environment. A major theme of the discussion is how higher interest rates continue to reshape commercial real estate valuations.

Commercial real estate investors and operators are facing a fundamental shift in market dynamics, with the era of ultra-low interest rates firmly in the rearview mirror. In a revealing conversation with Greg Friedman, David Bitner, Global Head of Research at Newmark, emphasizes that this change isn't temporary – it's a permanent feature of the investment landscape that requires a complete recalibration of expectations and strategies.

Looking ahead this year, Bitner anticipates continued volatility in interest rates, with the 10-year Treasury likely to run between 3.8% and the mid-5% range. This volatility, coupled with ongoing economic uncertainty, will significantly impact transaction activity and asset valuations across all property types.

Despite these challenges, there are bright spots emerging. Office markets showed their first positive net absorption in 18 quarters during Q4 2023, suggesting a potential turning point. The industrial sector is poised for recovery, particularly in secondary and tertiary markets, driven by near shoring trends and over $530 billion in planned manufacturing investments. Multifamily properties, especially new construction, show attractive pricing dynamics relative to existing stock.

For investors looking to deploy capital, David suggests a balanced approach with a significant allocation to debt investments, where spreads appear more attractive than equity returns. He particularly highlights opportunities in direct lending and mezzanine debt, where returns can reach 14%. On the equity side, he points to value-add opportunities in trophy office conversions, though emphasizing the critical importance of submarket selection.

The wall of debt maturities remains a significant concern, with approximately $2 trillion in commercial real estate loans maturing over the next couple of years. While banks have largely employed an "extend and pretend" strategy thus far, David suggests regulatory pressure and dwindling extension options could force more resolutions in 2025, leading to increased transaction activity and price discovery.

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The podcast also touches on potential policy impacts from the new administration, including proposed tariffs and deregulation efforts, which could create both challenges and opportunities for commercial real estate markets.

For investors and operators in commercial real estate, 2025 promises to be a year of continued adaptation to new market realities. Success will require embracing volatility, adjusting return expectations, and taking amore targeted approach to investments across both debt and equity opportunities.

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Peachtree Point of View explores today’s complex investment landscape, offering expert insights and actionable strategies to navigate dislocated markets and capitalize on mispriced risk. Each  episode dives deep into market dynamics, equipping you with the knowledge to better understand and navigate the ever-changing financial world. Whether you're looking to invest, raise capital, or partner, we’ll reveal the tools and strategies needed to generate superior risk-adjusted returns.

Don’t miss an episode—catch up on past discussions and stay ahead of the curve. [Listen Now]

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In the latest episode of Peachtree Point of View, host Greg Friedman delves into the world of private credit lending with Daniel Siegel, head of Peachtree Group's commercial real estate lending platform. Together, they unpack how today's evolving market landscape is opening doors to compelling private credit investments.

Market Dynamics and Opportunities

The market is at an inflection point, with treasury yields north of 4.5% and nearly $2 trillion in commercial real estate loans maturing over the next 24 months. Siegel observes, "If you bought in 2020-2022, there's a good chance you've experienced some value deterioration." This trend has pressured multifamily valuations, which have dropped by 20-25%, yet fundamentals remain solid, with properties continuing to maintain healthy occupancy.

The discussion highlights an intriguing paradox: while many assets face valuation challenges, they continue to perform well operationally. This disconnect is creating opportunities for sophisticated investors, particularly as banks contend with increasing regulatory pressure to reduce their commercial real estate exposure. Siegel shares an interesting case study of a Massachusetts multifamily project where his team stepped in to provide a creative financing solution that benefited both the original lender and the borrower.

Property Sector Analysis

The episode also offers nuanced insights into various property sectors. As mentioned, multifamily, while grappling with near-term pricing pressure, holds strong long-term fundamentals. Hospitality demonstrates remarkable resilience, leveraging its daily pricing power. Retail has emerged stronger after years of supply rationalization. Conversely, office assets present a mixed picture—Class A properties maintain performance, while secondary assets face substantial challenges.

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Strategic Advice for Borrowers

For investors exploring private credit opportunities, Siegel emphasizes the importance of working with experienced managers equipped with the infrastructure for loan servicing and workouts. "It's easy to write loans," he notes. "It's the infrastructure needed to work them out that matters."

Drawing on Peachtree Group's 17-year track record and over $11 billion in commercial real estate investments, the discussion underscores the firm's ability to provide creative financing solutions while maintaining conservative underwriting (typically 65-70% LTV).This approach has helped the firm to capitalize on market dislocations while effectively managing risk.

With its seasoned expertise and innovative strategies, Peachtree Group continues to lead the way in delivering strong risk-adjusted returns on its investments. This episode is filled with actionable insights and strategic guidance for navigating today's complex market environment.

Listen to the full episode to hear detailed discussions on:

• Current market dynamics and opportunities
• Property sector analysis and outlook
• Keys to selecting private credit managers
• Strategic advice for borrowers in today's market

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