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.
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.
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.
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.
ATLANTA (Sept. 23, 2024) - Peachtree Group (“Peachtree”), a leading commercial real estate investment firm with a multi-billion-dollar portfolio of equity and debt investments, has announced the launch of its fifth hotel property structured as a Delaware Statutory Trust (DST) following the completed acquisition of the 128-key Residence Inn Tampa Wesley Chapel in the greater Tampa, Fla., area. This follows Peachtree’s successful closing of its Home2Suites by Hilton Atlanta Sugarloaf DST in August.
Peachtree’s DST acquisitions present a compelling opportunity for 1031 exchange investors seeking to reinvest proceeds from the sale of appreciated real estate while enjoying tax deferral benefits and maintaining a strong allocation within the thriving hotel sector.
The Residence Inn Tampa Wesley Chapel is situated in Pasco County, a rapidly growing suburban community approximately 20 miles from downtown Tampa. According to industry sources, the county's population grew by nearly 9% from 2020 to 2023, making it one of the fastest-growing counties in Florida, driven by both residential and commercial development.
“The hotel’s prime location in the Wiregrass Ranch master-planned community, combined with its proximity to the Wiregrass Ranch Sports Campus, makes it a valuable addition to our growing portfolio of DST properties,” said Tim Witt, president of 1031 Exchange/DST Products at Peachtree. “With activities and tournaments at the 98,000-square-foot sports complex boosting weekend business for the hotel and Pasco County’s investment in expanding the facility, we anticipate strong demand from both leisure and business travelers.
“Further bolstering our off-market acquisition is the fact that it was recently appraised for nearly $900,000 above our purchase price,” Witt said.
Peachtree's five DST acquisitions, including the 130-key Home2 Suites by Hilton Atlanta Sugarloaf, 100-key Courtyard by Marriott Atlanta Kennesaw, 126-key Home2 Suites by Hilton Chandler in the Phoenix MSA, 98-key Hilton Garden Inn in Jackson, Tenn., and the recently acquired Residence Inn Tampa Wesley Chapel, total over $150 million in debt-free real estate transactions.
These acquisitions align with Peachtree’s core DST investment strategy, which focuses on recognized hotel brands in high-growth markets, value-add opportunities and properties managed by experienced hotel management teams, ensuring strong potential for long-term success.
“Positive secular trends in travel are fueling long-term growth in the hospitality industry. The rising middle class, a focus on experiential travel and the expansion of the work-from-anywhere culture are driving demand for unique and extended stays. These factors create a strong foundation for sustained growth and stability in the hotel sector, making it an attractive investment for the future,” Witt said.
Peachtree underscores its commitment to innovation and investor satisfaction, aligning with the core principles of the 1031 exchange and offering investors a seamless avenue to transition capital gains into a new passive investment.
About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, the company manages billions in capital across acquisitions, development and lending, augmented by services designed to protect, support and grow its investments. For more information, visit www.peachtreegroup.com.
