Michigan Real Estate News

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Mall Properties Transition to the Untraditional

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With mall vacancy rate across the U.S. setting new records, it’s no surprise that malls are standing empty or being repurposed. Two new occupants of the Lakeview Mall in Battle Creek are doing just that. A climate-controlled self-storage developer bought the former Macy’s and plans to rent storage units, reachable by an indoor drive-through, and Horrocks Farm Market will move from downtown Battle Creek into the former JC Penney store. This represents the current trend for mall properties. Development experts look toward transitioning these large retail properties into housing, entertainment venues, medical facilities and other non-traditional mall tenants.

 

 

Century-Old 1031 Exchange Tax Break Is On The Chopping Block

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Thanks to a 100-year-old provision in the tax code, real estate investors have been able to roll earnings from the sale of one property into the purchase of another to avoid paying taxes on the gains from the properties they sold. Section 1031 covers a transaction that is commonly called a like-kind exchange and provides a tax deferral on the financial gain of a sale if the proceeds are directly rolled into a similar investment property within 180 days. The Biden administration is taking aim at the tax code in the interest of financial equity. The current administration’s efforts would generate $19.5 billion in tax revenue over 10 years.

Wholesaling Middlemen Descend on Neighborhoods

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States and cities in the U.S. are cracking down on a niche in house-flipping known as wholesaling. The wholesalers do not typically hold real-estate licenses which makes regulation difficult. Wholesalers negotiate with homeowners and then put the homes under contract and sell those contracts to home-flippers. A home that just needs a little upgrade is long gone in today’s market. Instead, wholesalers are targeting homes that aren’t on listing services and need major overhauls. Most are in poorer neighborhoods. There are allegations that some wholesalers mislead struggling homeowners about the value of their property and take advantage of the situation.