Leverage is an important instrument for real estate owners and investors. Utilizing leverage appropriately can help enhance returns, build a diversified portfolio, strategically enter the market, and provide tax benefits. As the capital markets have become increasingly challenging, many lenders are requiring guarantees by the mortgagors. The use of a guarantee can drive surprising tax results. This article will concentrate on how mortgage debt affects the tax basis of acquired property, as well as the investment basis of real estate owners and investors in partnerships (note that real property held in different types of entities may yield varied outcomes).
In our continuing effort to study New Jersey’s major cities and their rates of revitalization, we are going to examine New Jersey’s most outstanding urban restoration story — New Brunswick — thanks to the diligent work of key developers and anchor institutions in health care, education and government. You will hear from these vital players themselves that have put this spectacular redevelopment program together, including not only Chris Paladino of New Brunswick Development Corp., but also Tony Coscia, his lawyer and adviser, who together have formulated the creative financing deals necessary to achieve $5 billion worth of development over the last 20 years. In addition, we will hear from other critical players who have participated in this revitalization and made New Brunswick the outstanding success story that it is, including Wasseem Boraie of Boraie Development, Mayor Jim Cahill, Tim Sullivan of the Economic Development Authority, Mark Manigan of RWJBarnabas Health and Tony Calcado of Rutgers University.