Tax-deferred exchanges, which accounted for nearly 30 percent of investment sales during the industry’s boom years, slowed to a trickle at the lows of the recession. Today—fueled by a renewed availability of capital—those deals are reemerging.
In 2007, perhaps the frothiest year of the boom, $4.1 billion in tax-deferred exchanges were executed on 765 transactions nationwide. That velocity proved to be short-lived.
The subprime lending crisis led to a full-blown credit crunch that began to rear its ugly head during the first quarter of 2008. As a result, banks, conduits and other institutions shut off the capital spigot for all types of investments. Most significant was the near shutdown of the CMBS market, which accounted for almost half of all commercial lending during the first half of 2007.
Bill Rose
As a result, a high-leverage, speculative investment climate was replaced by a renewed focus on operations underwriting. Of the retail transactions that managed to secure financing and close during the global economic crisis, the majority were ...
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