CREJ

December 2020 — Office & Industrial Quarterly — Page 17 www.crej.com proposed tax overhaul suggests: • Elimination of 1031 exchanges, which would be detrimental; • Elimination of currently favorable capital gains treatment; and • Elimination of “step up in basis” for inheritors. If the two Georgia Senate runoff elections in January go to Democrats, then the House, Senate and executive branch are all in control of Democrats. There’s a tradition, an unwritten rule, that any major legislation is subject to a Senate filibuster requiring 60% of the Senate to approve. Would this tradition protect passing of the presi- dent-elect’s legislation? Probably not. There’s a sense that the filibuster rule of 60% of the Senate needing to approve any major legislation will stop a Biden tax plan from passing, but the “budget reconciliation pro- cess” prevents filibusters on tax and spending bills. If the Georgia Senate runoffs do not result in at least one Senate seat going to a Republican, then there’s a significant chance that the Biden tax plan will become law, negatively impacting suburban office sales in the Denver market. One might hope that there would be a strong commercial real estate lobbying effort, or enough pro-commercial real estate Democrat- ic senators to stave off the possibility of a Biden tax plan passing, but if not, Denver suburban office building mar- ket will suffer. It seems the stock market has priced in the divided government of a Democratic president and House and a Republican Senate, with recent increases seen. This would be the best scenario for the Denver subur- ban office building value stability as it would reduce the chances that the tax plan would become law. Doing our share to end the pan- demic is important. Normally uncon- troversial practices like social distanc- ing and wearing a mask have become politicized, but this does not have to be the case. I have printed bandan- nas with multiple politician’s names on them so people can support their favorite politician and mask up too. If we can limit the spread of the virus with these measures, as well as get vaccinated as soon as possible, the suburban Denver office investment market will be back, stronger than ever. Investment sales of suburban Den- ver office buildings built before 2000 have seen a downturn in deal size and sales velocities for the second and third quarters compared to the same period last year. The health situation has contributed, as has the resultant recession of last spring, but there are opportunities for improvement via health practices, monetary, fiscal and tax policies, which will show us a revi- talized market in 2021. s J.Becker Continued from Page 8 The suburban Denver office investment market has held up in terms of valuations as shown by flat cap rates and increased prices per square foot from last spring/summer to this spring/summer. According to CoStar, it's taking longer for sales to be completed. This year, the average has been 274 days. Last year, the average was 235 days.