Dan Wagner told REALTOR® association leaders on Monday how important it is for Congress not to repeal Section 1031 like-kind exchanges.
Wagner, president-elect of the Chicago Association of REALTORS® and a member of the IAR board of directors, appeared on a real estate economic update panel with NAR First Vice President Bill Brown and NAR Chief Economist Lawrence Yun. The panel was held at the NAR Leadership Summit for incoming association leaders.
Wagner, who is Senior Vice President Government Relations for the Inland Real Estate Group of Companies, Inc., has been actively involved in pushing for congressional support of the 1031 Exchange legislation.
Wagner said the 1031 exchange is an important tool for commercial property owners. Through 1031 Exchange rules, companies are better able to create jobs by putting money into renovating properties, making them more energy efficient and following green initiatives, Wagner said.
1031 Exchanges are tax code provisions which allow investors to defer capital gains taxes when they sell a property and purchase another similar property. Inland Real Estate Group deals extensively in commercial office and retail properties, and has frequently used the 1031 Exchange rules.
During their discussion, Wagner and Yun touched upon the subject of rising interest rates and their effect on capitalization rates. Wagner noted that while suburban office buildings, unanchored strip centers and interior malls are suffering from vacancies and decreasing rents, other retail establishments and apartment rentals seem to be very profitable.