question

If approved, what impact will President George W. Bush's $1.6 trillion tax cut have on the real estate industry?

heard on the street

“Bush's proposed tax cut, as planned and as structured currently, will be mildly stimulative. As structured, the lion's share of the tax cut will go to high-income individuals and less to low-and moderate-income individuals. Whatever the monetary benefits are, they will mostly go into real estate securities as opposed to direct investments. It may be beneficial for REITs.”
— Quinton E. Primo III, CEO, Capri/Capital Advisors, Chicago



“As currently proposed, the tax cut's biggest beneficiaries will be high-end consumers; so there will not be much of a trickle-down effect on commercial real estate. Fancy resorts and builders of expensive homes might get a bit of a boost, though the tax cuts won't compensate for recent stock market declines.”
— M. Leanne Lachman, Principal, Real Estate Strategies, Lend Lease Real Estate Investments Inc., New York



“It won't have very much impact at all in the short term. It might impact the willingness of individuals to sell properties. Some may be more inclined to hold them for future generations. We don't think this tax cut is God's gift to save the real estate business.
— Peter Pattison, Principal, Peter Pattison Ltd., New York



‘Quotable’

“It's a slow period of time this year, but not a bad period of time. The housing market has already stabilized. A lot of the things you see in a recessionary environment, you don't see now. I don't expect that we'll see a serious correction at all.”
— Donald Ratajczak, CEO, Brainworks Ventures Inc., Atlanta, speaking at the 13th Annual Hotel Investment Conference in Atlanta



“Most of the world recognizes the economy of building retail on the first floor with housing above. But in the United States, because of the way the secondary mortgage markets are dominated by Fannie Mae and FHA, it's hard to get the financing. FHA and Fannie Mae basically have set up a secondary mortgage market for the single-family suburban home. When you're doing mixed-use, the mortgage market gets all nervous. FHA and Fannie Mae aren't set up to handle it. The government programs very subtly, but heavily, subsidize sprawl.”
— John O. Norquist Mayor of Milwaukee



“A year ago, venture capitalists, ourselves included, told people to spend money like drunken sailors. Today, that's reverted to ‘keep it simple, stupid.’”
— Jeffrey Kaplan, Managing Principal, Europe, at Boston-based Westbrook Partners, commenting on the Internet and the high-tech environment at MIPIM 2001 in Cannes, France



e-mail voices to mvalley@intertec.com