Thoughts on how benefits of the new tax law are likely to increase local demand for industrial space across all size ranges.
While the anticipation of tax reform was on everyone’s radar last year, few predicted the intense and immediate response to the new law by America’s biggest corporations once it became a reality.
Within days of the new package being signed into law, announcements of employee wage hikes and bonuses came pouring in, as did the unveiling of major plans for capital equipment purchases and new facilities across multiple business sectors. Literally, hundreds of major companies have taken action and the list gets longer each day.
Citing lower tax rates, generous new expensing rules in combination with fewer federal regulations, CEO’s around the country touted the new law as a game-changer that could unlock the potential of American businesses and make their products and services more competitive around the globe.
While announcements by the likes of Apple, AT&T and Exxon capture the headlines, the rules apply to all businesses, large and small. Based on the feedback we are starting to get from our own clients, we believe the benefits of the new law are very likely to increase local demand for industrial space across all size ranges.
Virtually any capital expenditure with a designated economic life of 15 years or less can be fully and immediately expensed using new bonus depreciation rules.
The new rules apply to the acquisition of used as well as new capital equipment, which is expected to provide an added boost to capital spending. One of our clients, who was just about to place an order for 20 new forklifts, decided to buy a mix of new and refurbished equipment, which will reduce acquisition cost without losing the bonus depreciation benefit.
Need to upgrade your fleet of service trucks, buy a new racking system to store more inventory or build out more office space to accommodate new employees? If so, it’s time for a serious sit-down with your accounting professional to learn how you can take full advantage of the new expensing guidelines, which, by the way, are retroactive to September 30, 2017. So, your savings may have already begun!
Yes, things have really changed and you owe it to yourself to find out just what the new tax law offers you and your business. The changes are so profound that almost any spending decision you make will be kinder and gentler to your bottom line.
While the new tax package is intended to stimulate business growth, the supply of industrial space throughout Southern California remain very tight, and an increase in demand as a result of the new tax law could tighten things further. But, you don’t have to move to take advantage of the law.
It could just be that re-investing in your existing space could increase efficiency enough to delay your next move. No matter how long you have left on your lease or how long you have owned your building, you can take advantage of the biggest change in the tax law since 1986. Your accountant can crunch the numbers for you, but we are here to connect you with contractors, suppliers and service providers who can help you optimize your strategy for growth.
Just give us a call to get started.