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Federal Tax Reform Package to Provide Boost in California
The recently-enacted federal Tax Cuts and Jobs Act reform legislation is expected to drive interest in knowledge-center markets, spur investment in multifamily assets, and ramp up office leasing across a variety of sectors, even in states such as California and New York with high state and local taxes. Those were among the key findings of Cushman & Wakefield’s Local Tax Spotlight report.
The legislation will reduce taxes even in those states and markets with the highest state and local taxes, like the San Francisco Bay Area and New York City Metro. Taxes will fall even more in lower-tax markets like Texas and Florida. The report predicts it will drive up office rents, particularly in the tech and financial services industries, and will prompt further investment in knowledge-center markets like the Bay Area, Seattle, Boston and Raleigh-Durham, NC.
In California, Cushman & Wakefield predicts the Bay Area economy and office market will benefit from increased investment following repatriation of tech companies’ cash hoards, but they caution that rising housing costs and traffic congestion may make burgeoning secondary tech markets more attractive to occupiers.
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