The new tax reform act provides for a new and novel way to depreciate new capital investment—plant, equipment and buildings. In theory, the positive impact could be significant. In the current context, however, expensing raises some concerns.
In multifamily investment, a market’s supply pipeline is a critical factor in site selection. A looming supply overhang can raise vacancy and slow or invert rent growth, hurting revenue. Units under construction are the primary measure of supply risk, but it’s important to consider the risk posed by planned units as well.