Four Things to Know Before Investing in Hotels

Four Things to Know Before Investing in Hotels

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Investors often overlook hospitality as an asset class for their investment portfolios. Why? The drivers in typical residential or commercial real estate may not always apply in hospitality. However, the hospitality industry is approaching nearly ten years of consecutive growth. From 2009 to 2017, US hotel gross bookings grew from $116 billion to $185 billion (Deloitte). The potential for robust growth, steady cash flow, and upside for appreciation make hospitality an asset class that you should consider for your investment portfolio. Before “checking in” to your new hotel investment, here are four points to consider.  1. Review demand drivers  2. Make sure the brand is the right fit  3. Evaluate the hotel’s management  4. Consider potential cash flow and tax benefits  Review demand drivers  Investors should consider the risks associated…
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Delaware Statutory Trusts 101

Delaware Statutory Trusts 101

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Investors looking to reinvest profits from the sale of an asset know that it’s a delicate process. After all, they don’t want to expose their earnings to capital gains taxes if they are planning to reinvest the money quickly. However, investors often find themselves switching strategies or opting to invest in other classes of real estate. That’s where 1031 exchanges, so named for the section of the tax code that enables them, enter the picture. This strategy allows investors to defer capital gains taxes, provided they use the money from the sale of a property to invest in another. In the early 2000s, a legal structure, known as “tenancy in common,” or TIC, was a leading investment vehicle for 1031 exchanges into commercial real estate projects. When investors are tenants…
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The Rules of a 1031 Exchange

The Rules of a 1031 Exchange

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Generally, profits earned on the sale of property are subject to capital gains tax. A common strategy for deferring capital gains is to complete a section 1031 exchange. The term “1031 exchange” refers to section 1031 of the Internal Revenue Code, which allows investors to defer paying capital gains taxes on an investment property following a sale. To defer capital gains, the investor must purchase, or roll into, another “like-kind” property with sale proceeds from the initial investment.  If you are considering utilizing a 1031 exchange in the sale of an investment property (the “relinquished property”) and purchase of another (the “replacement property”), there are important rules you must follow to ensure that the transaction is eligible. These include:  Generally, the properties exchanged must be real estate, even if they…
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Virtua Partners Finalizes Purchase of Courtyard by Marriott in Winston-Salem, NC; Strategic partnership with Hotel Equities promotes continued growth through new development and acquisitions

Virtua Partners Finalizes Purchase of Courtyard by Marriott in Winston-Salem, NC; Strategic partnership with Hotel Equities promotes continued growth through new development and acquisitions

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SCOTTSDALE, AZ and ATLANTA, GA - (August 22, 2019) – Virtua Partners announced the purchase of a 126-room Courtyard by Marriott under construction in Winston-Salem, North Carolina. Hotel Equities will manage the Marriott hotel in downtown Winston-Salem when it opens in Q1 2020. Hotel Equities and Virtua Partners joined forces last year to expand upon their current hospitality portfolio through new development and acquisition opportunities. Hotel Equities is providing development services for the Courtyard through the construction process and will see it through completion. Located at 640 W. 4th Street in the heart of Winston-Salem, the Courtyard will feature a rooftop bar with views of the surrounding downtown area.  As the home of Wake Forest University and numerous corporate headquarters including banking firm BB&T, Winston-Salem enjoys its status as both a…
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The Capital Gains Tax ‘Opportunity’ of a Lifetime

The Capital Gains Tax ‘Opportunity’ of a Lifetime

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A little-known provision within the Tax Cuts and Jobs Act of 2017 provides investors with a chance to earn returns on attractive investments, receive remarkable decreases to their capital gains taxes and make an impact on local communities. They are called Opportunity Zones. To better understand this exciting program, wealth managers and accredited investors should learn about the tax benefits available. Opportunity Zones were established by Congress to promote long-term economic stimulus through investments in low-income community census tracts in all 50 U.S. states, six U.S. territories and the District of Columbia. Investors are able to roll over their capital gains of any investment into a Qualified Opportunity Fund (QOF).  QOFs steer money into qualified projects to ensure investors capture the associated tax breaks while meeting other fund-specific requirements and…
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