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Making a Market that Works for Everyone

PeerStreet’s “two-sided marketplace” wins across the board. By Carole VanSickle Ellis When PeerStreet co-founders Brew Johnson and Brett Crosby started PeerStreet in 2013, the industry lacked the vocabulary to even describe the innovative online marketplace they had created. Although “two-sided marketplaces” did already exist (think: Amazon, Uber and Airbnb), the real estate industry had a notable lack of them. The new company’s aim was to change this and, in the process, create a completely unprecedented environment where real estate entrepreneurs, accredited investors and private lenders could conduct successful transactions in exponentially growing volumes. PeerStreet is the industry’s first two-sided marketplace for investing in real estate debt with investors on the one side and lenders on the other, Johnson and Crosby explained. “While a one-sided marketplace builds one business, a two-sided marketplace scales thousands of businesses,” COO Crosby said. “This creates a social-impact element in two-sided marketplaces that is one of PeerStreet’s defining advantages.” That advantage has served to make the fintech platform one of the most attractive in an increasingly crowded field thanks to the transparency and market access the entire company—now more  than 200 strong—holds  in such high regard. “It’s a $3.5-$4 trillion equity value market,” said Johnson, PeerStreet’s CEO. “There are about $150 billion in transactions and acquisitions that take place [in the broader real estate market] from investors buying investment properties every year. Only about 30% of the acquisitions have financing attached to them.” PeerStreet believes it holds the answer to resolving that fragmentation and creating a positive, productive environment as part of the solution. Hyper-Fragmentation Leads to a Growth Explosion Solving the inherent problems associated with fragmentation was a top priority in 2013 when Johnson and Crosby first started the PeerStreet project. By 2015, when the company opened its doors to the general public, they believed they were well on their way. “We had to level the playing field between Wall Street and Main Street,” said Jason Harris, PeerStreet’s director of strategic sales. The fragmentation in the real estate lending market means that the local borrowers in the space frequently cannot access adequate capital. The local lenders in these instances have never had access to this kind of secondary market. Access to such a market, via the PeerStreet platform, provides new levels of liquidity, stability, technological capabilities and affordability in the mortgage market for private money lenders. It was clear early on that the key to providing this kind of access is PeerStreet’s innovative two-sided marketplace. The platform exemplifies the fintech- enabled marketplace model, offering a combination of financial services, software engineering and market opportunity. “PeerStreet serves to bridge the gap between lenders and capital markets by offering a secondary market beyond the traditional securitization market,” said Johnson. “Accredited investors can make more informed decisions and diversify their portfolios with unprecedented levels of data and transparency into their investment options. Private lenders can access myriad diverse capital sources and technology to make lending more efficient. Of course, key to all this are the real estate entrepreneurs who are borrowing capital, then going out and purchasing and enhancing more investment properties.” Scaling Up Across the Spectrum In an industry where investment capital can be difficult to access and retain, PeerStreet’s success and subsequent expansion is certainly due to its transparent, outwardly focused company culture. The entire team receives training on and participates in ongoing discussions on major performance metrics and corporate transparency. The company is also dedicated to employee growth, offering regular opportunities for leadership, growth and new challenges. “This is a company that is built on the fundamental values of openness, transparency and unlocking value for our customers rather than trying to extract value from them,” said Crosby. “Part of that process involves cultivating a work environment that encourages a hardworking, talented team to continue to transform the way the lending industry does business.” Harris added, “If we continue to execute that vision, we will continue to create and expand on  a unique, self-sustaining  market with limitless potential.” Part of that potential exists in its most basic form in smaller-scale investors, who often struggle to find their footing in today’s highly competitive real estate markets. On the other side of the equation, many new investors are nervous about making large capital investments at the outset. PeerStreet offers initial investments as low as $1,000 and automated reinvesting for $100. “That ability to invest in a fractional piece of an individual loan is crucial,” said Johnson. “It gives every investor a shot at diversification.” This scalability and accessibility generally did not exist before PeerStreet’s dual marketplace platform. A combination of legal innovation and technological development made the entire multilayered process possible. “We’re investing tens of millions of dollars into technology to create value for investors so they can save money and time,” said Crosby. The Technology of Underwriting PeerStreet’s underwriting engine is another example of the massive returns the company reaps from its investments in technological advancement. The platform’s automated underwriting engine works in tandem with traditional analyst review to create a fine-tuned loan review system with predictability and peace of mind a top priority. “Between the loan originator’s credit evaluation, the underwriting engine’s investment criteria overlay and traditional analyst review, there are multiple layers of diligence that underlie every loan,” Johnson said. That scrutiny of each potential investment from multiple angles could keep both the platform and the PeerStreet product in demand regardless of where the economy  falls in its cycle. When  real estate markets are heated, PeerStreet can enable active, experienced, high-volume investors to either leverage some of their returns into private loans or, through its loan-purchasing system, access return on capital more quickly and cycle that capital back into the system. At the same time, the ease of access to the platform and relatively low barrier to entry may keep newer and lower-volume investors in the equation and participating in both housing growth and economic expansion. When markets cool and conventional financing becomes harder to come by, investors focused on acquisition can use the

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Northeastern States See Recent Changes in Lien Status Priority and Legislation

Regulators, lenders and servicers must keep a keen eye on developments. By Ralph Stebenne Recent legislative enactments and judicial rulings have lenders and their servicers paying close attention to unpaid homeowner and condominium assessments. New Jersey and New York have introduced newly crafted legislation that will require increasing surveillance and expenses in the servicing of loans from these Eastern Seaboard states. The District of Columbia has issued a recent judicial ruling that may allow an association’s lien to have priority over a mortgagee’s first lien.  What’s Happening in New York? New York passed Bill A1800, an additional chapter to their Vacant Property Registration Act. This additional legislation demands extreme diligence in the servicing of at-risk borrowers. Bill A1800 puts added stress on servicers and their vendors to determine if a property is vacant in a timeframe that many servicers will find impossible to meet. The bill also carries extreme liabilities  if followed to the letter of the law. To wit, a seven-day contact period to determine vacancy sets in motion a call for a series of drastic responses, including rekeying, winterizing, and boarding  up doors and windows, where applicable. Condominiums and co-ops can be extremely difficult to contact and gaining entrance can be impossible. These issues alone are alarming, but what looks to be a last-second addition to the bill, Section K, states that the servicer “… pay homeowners’ association or cooperative fees as needed to maintain the property.” Servicers and lenders may be required to pay all fees as they come due before foreclosure in order to “maintain” the asset. This is a vague requirement and will likely need to be further legislated. Codification of this law will put even more liability on the lender and servicer, as it is evident what direction these laws are taking. And in New Jersey . . . New Jersey has broadened the super priority umbrella to include all associations and has extended the lien timeline to five years with proper filing of paperwork. New Jersey had instituted a six-month lookback for condominium associations, which has now been extended to include all associations. Bill A5002/S3414 also includes a renewable priority lien that can be carried back for five years. This bill overrides existing association governing documents. Servicers and their default servicing teams will have to pay close attention to all foreclosure and lien notification documents to accurately total liabilities that are now incurred in association foreclosures in the state of New Jersey. DC Developments The District of Columbia’s Court of Appeals issued opinion No. 16-CV-977 in September 2018. Here they reviewed the decision on LIU vs U.S. Bank Nat’l Ass’n, 179 A.3d 871, which concerned a foreclosure sale initiated by the association for unpaid dues and other fees. The association’s Notice of Foreclosure Sale advertised the sale of the unit subject to the first deed of trust. The sale took place in January 2013, with the successful bidder buying the unit for $11,000. In January 2015, Capital One filed to foreclose the unit, to which the buyer counterclaimed to quiet title. The initial trial court required the buyer to abide by the foreclosure sale agreement: that the purchase was subject to the original mortgage. The Court of Appeals reviewed the case and vacated the decision, forcing the buyer to abide by the initial agreement. The case was remanded to be reheard by the lower court, with the future decision reviewable by the Court of Appeals. It is the Court of Appeals’ opinion that the association’s enforcement of its super priority lien by foreclosure resulted in the “extinguishment” of the first mortgage, an outcome we had not seen in the District of Columbia. Several states have given lien priority to associations’ claims, allowing the foreclosure of the first lien, and the District of Columbia may be the next to join that group. It will be imperative for servicers to begin reviewing their portfolios and their District of Columbia loans for accuracy and completeness. This case, as well as developments in other legislative and judicial proceedings, needs to be carefully monitored. Servicing and foreclosure strategies need to be altered to meet these new developments. It is evident that there is a push to add more states to the super lien group and to expand the powers of associations.

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Warehousing Some Respect

Greg Rand watched his mother work hard to build her real estate business, even though realtors often didn’t get much appreciation. He was determined to change that image. By Greg Rand My earliest business memories are related to real estate because my mom, Marsha Rand, launched her real estate career when I was in elementary school. She went from a rookie agent to a top producer, to a branch manager and finally the owner of her own firm. Century 21 Rand was a startup that had culture as its foundational value proposition. It was quintessential Century 21—a rowdy band of women who sported gold jackets and took on the town. Entrepreneurial Foundation I learned three key things about the business from watching this all unfold. First, entrepreneurship in real estate works. Second, family is the most important thing, unless an agent is having a problem, and then solving their problem is the most important thing. And third, the public didn’t appreciate real estate agents enough. Every time a real estate agent was depicted on TV or in movies, they were lampooned. That was my mom! I still remember how it bothered me as a kid. I worked in my mom’s  company in many mission- critical capacities: licking envelopes, answering the phone, sticking photos into photo books…. I graduated to taking pictures and having them developed at a 24-hour photo. I observed that something important was taking place in that office. People would come out of conference rooms elated. “They just bought their first house,” someone would tell me. Or they would come out looking horrified. “They just bought their first house!” The range of emotions told me something weighty was going down. It didn’t make sense to me that a profession in which something so important was being handled was also made fun of. The Dawn of Data One day when I was answering the phone on the weekend, I had a revelation. I had been trained not to give out the price of the house until I got the caller’s phone number. Hmm. The caller wanted information, and we weren’t providing it. I filed that impression away for a few years until I learned about the coming “information superhighway.” I read a speech from NAR president Bill Chee in which he characterized the situation as a bunch of hungry lions coming over the hill while a few chihuahuas fought over a piece of meat. Those little dogs were about to be devoured. The chihuahuas were realtors, the lions were the consumer public and the meat was housing data. They wanted it. We were hoarding it. And the internet was going to blow us to smithereens. The customer wanted information, and we were intentionally getting in the way. At the time, I was 24 and making six figures as a mortgage sales guy. I quit that job to start a company based on “public access to MLS.” Mike Toner, a college buddy and I launched RealtyVision, one of the first two companies in the country to display interior tours of houses on computer. This was pre-internet. The computers were encased in kiosks in public places. Our business model was fatally flawed due to lack of distribution. If we had held out a couple of years, RealtyVision would have been a website and I would have retired by 30. But we didn’t hold out. We ran out of money and got jobs. HFS, Inc., the company now known as Realogy, had hired Bob Pittman as the new CEO of Century 21. Bob was one of the founders of MTV, so he was a whiz kid CEO. I pitched RealtyVision to Bob’s team, and they said “no.” Instead, they offered me a job to do half-day technology seminars for their agents. This was 1996. I did 70 cities in 18 months. We showed audiences ranging from 20 to 400 real estate agents that technology was not their enemy. I have some priceless memories of the first time my audience saw things like email attachments. As the Technology Evangelist, I got to work on the IT team that deployed the first Century21.com, which was also one of the first real estate websites with MLS data. Public access to the MLS was a huge success, and I believe it’s the reason the industry has thrived for so long. The customer wanted access, and we gave it to them. You can make fun of realtors all you want, but they stared down those lions and made friends. If they had held out and fought the release of MLS data, there is no doubt they would have gone extinct. All in the Family That was a wild ride that allowed me to make a minor impact on a large part of the country. Then my mom pitched my brother Matt and me to join her in the family business. My dad wanted to retire, and she wanted to begin a transition. I jumped at the chance to have a deeper impact, if on a smaller geographic scale. It was an honor to be asked. I had spent almost a decade in the real estate tech space. Now it was my time to work on the other side of my theory—that real estate is too expensive to take lightly. Real estate is a financial service. This was late 1997. We switched from Century 21 Rand to Prudential Rand. Flying the flag of a financial services powerhouse was perfect for where we wanted to take the company. We grew from $7 million in revenue to over $50 million within 10 years. We layered in mortgage, insurance and title businesses. We did our best to present a “business suit” version of real estate sales. We were a top-quality firm, but we were still essentially doing it the same way as everyone else. In 2008, we switched to Better Homes and Gardens and took on a much softer brand, which has worked like a charm. Launching a Dream I

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Demystifying Property Analysis

Understanding property analysis can be the difference  between a big profit and losing everything. By Scott Fahl Property analysis has long been a subjective practice, with as many different opinions on best practices as there are properties. Getting it right can mean the difference between a big profit and losing everything. Why is it so difficult to get an accurate property value? Surely with all the billions that have been thrown at the  problem, there must  be someone with a solution. Right? For decades, companies and individuals have been working to create the Holy Grail for accurately appraising properties using Automated Valuation Models (AVMs). Automated Valuation Models The AVM model uses mathematical modeling combined with databases to attempt to predict a property’s value at a certain point in time. In a nutshell, the model is trying to pull accurate comps. The more precise the comps, the more accurately they can predict the property’s value. The AVM model sounds good on paper. But it falls apart rather quickly when you realize finding accurate comps is much more complicated than the price per square foot, selling price and proximity to subject property. To lay it out for you, mathematical models can’t tell you that Property A was well taken care of by one owner who is a carpenter by trade and pulled permits for all the work he’s done and that Property B’s owner isn’t a carpenter, pulled zero permits and may or may not have redone the electrical. The AVM models are getting better because they have much more access today to data. But, unless you can get homeowners to willingly provide data about their property on a regular basis, AVM models will always have a margin of error and in some cases a large margin of error. Investor Success Model Now, move the conversation to investment properties and everything changes. Owner-occupants are looking for things like demographics, noise, schools, traffic, walk-score, number of restaurants, grocery stores, dog parks, bus routes, biking trails, crime, etc., etc., etc. For investors, it’s simple: They are looking for one thing—profits! You can make an argument that investors  should also be looking  at the list of what owner-occupants want since it’s the owner-occupants who will be purchasing or renting the investment properties. Good point. But today’s real estate investment tech companies argue that you are overcomplicating things. They claim they can cut out 95% of the confusion most investors face when analyzing a property’s investment potential by changing the conversation from demographics and AVMs to focusing on what other investors are having success with. Looking at where investors are buying, what they are paying, what they are doing to properties (construction levels) and what they are selling or renting them for gives you just about all the information you need. A key piece to understand is this: When investors set the tone for an area (investment strategy, purchase price, rental rates, remodel levels, selling price, etc.), it gives you a near-exact game plan for what works and what doesn’t, virtually eliminating the need for inaccurate AVMs and demographics analysis. The reason this works so well is the investors are creating comparable consistency. Example: Investors A, B, and C all bought in the same area, around the same time, around the same price, added similar upgrades with similar finishes and sold near the same prices. If you find a similar home in the same area, in a similar condition and a similar price point to A, B and C, how long should it take you to decipher that it’s a good investment? The answer? Minutes! With this model, you know the best investment strategy for the area, what to pay, what level of construction is appropriate and what you can sell the property for. This level of comparable consistency removes the variables and equations that cause inaccuracies. If all comps are created equal, then AVM models would be extremely accurate. The problem for owner-occupant AVMs is when you add years of wear and tear, upgrades, additions, lifestyles, pets, etc., it becomes very difficult to determine how closely owner-occupant comps are to one another. Without going inside each property, you’re left to make assumptions that dramatically increase your investment risk—and at some point, that is going to bite you. When using consistent comparables, you can make confident, low-risk, data-driven, educated decisions in minutes. Tracking Consistent Comparables This model of using consistent comparables is achieved by using sophisticated and proprietary algorithms and substantial data sets. The results go way beyond valuing a single property and can go as far as assessing the investment potential of an entire nation—in seconds! Tracking investment activity on a national level can currently be done. But it’s mostly left to the behemoth data aggregators and delivered in the form of monthly, quarterly or yearly reports to the public or more detailed reports to institutions. These reports will tell you things like foreclosures are on the rise. Or, the fix-and-flip market is up 10% in Dallas/Fort Worth. Or, rental rates are increasing in Denver. This sort of data has its usefulness. But it’s not much help to those in the trenches practicing investment real estate every day (investors, realtors, appraisers, hard money lenders, etc.). It’s simply too vague. Today new technologies are filling in the gap by providing real time investment market analysis for the entire nation as well as down to the street level with the click of a button. It starts with bigger, better, more accurate data sources and is taken to next-level usefulness by cutting-edge technology companies who specialize in creating user-friendly software tools that solve widespread industry problems. These tools are not simply regurgitating their findings but have opened the door to allow users to create their own findings by entering their individual needs and parameters. An example of this  could be: Show me every property in Chicago that was flipped in the last six months and was originally purchased for 60% of the after-repair-value (ARV). Show me the

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The Hard-Money Mindset that is Weakening Your Portfolio

With hard money so cheap, more investors should be using it. By Charles Sells The real estate industry stigmatizes hard money and private money lenders. Unfortunately, that is preventing thousands of investors from generating the wealth and returns they are fully capable of creating. Although private money was once (justifiably) considered expensive and sometimes predatory, those days are long gone. Before you lose one more cent, isn’t it time to change your mindset? What if you were told that it is you preventing yourself from really experiencing growth in your real estate portfolio and business? You would probably be annoyed and shocked. However, the odds are good that some long-held misconceptions about private money are creating barriers between you and the success that today’s real estate market holds. Getting Beyond the Misconceptions Here are three mindsets about hard money that are just plain wrong in today’s lending environment. If you believe any of these, take a minute to adjust your thinking and get ready for some serious growth in your portfolio.  1. Using hard money means giving up returns. So many investors think about hard money this way: “Why give up 8-10 points (or more) if I have my own capital?” But, why wouldn’t you do that? Consider this example: Investor Bob took $500,000 and invested it into five different opportunities at $100,000 each. Each deal was worth far more than $100,000, but Bob was able to spread his money out and dramatically multiply his returns by using leverage to make up the difference on each deal. Investor Bailey, on the other hand, took $500,000 and invested it in just one deal equivalent to any one of the five Bob invested in. Both investors made money, but Bob’s buying power and returns were nearly five times greater—even after he paid back the loans. 2. Private lenders want me to fail. Probably one of the biggest hurdles you will face in terms of accessing hard money is experience. If you don’t have it, you may have trouble getting a loan. But that is precisely because your private lender does not want you to fail. Furthermore, if it appears likely you will fail, a private lender probably will not want to be part of that process. When you work with legitimate private lenders, they will likely know even more about your investment area than you do. They will request appraisals (which they will expect you to provide at your expense). They will demand that plenty of equity remain in the deal after financing, and they will require you to prove real estate is not just some new hobby you picked up last week. In fact, if your private money lender pitches you on taking out a loan using verbiage resembling this familiar refrain, “Invest today, using other people’s money, in your spare time,” then run! With an experienced, reputable hard-money lender, your loan rate will often depend on your ability to prove you have experience in successful investing and liquidating. In most cases, three successful deals will get you in the door with a pretty good rate. Does this mean less experienced investors are out of luck? Not necessarily, but usually you will need to partner up with a more experienced party or work with a third-party servicer who has already established relationships with hard-money lenders. 3. My market’s hard-money lenders are too picky. I’ve tried to finance dozens of wholesale deals and they won’t bite. One thing that will stop investors in their tracks is trying to finance wholesale deals. If you have been finding yourself against a brick wall as you attempt to finance one wholesale deal after another that you found in your meetup, then the problem is likely that you are trying to convince your lender to fund a deal that isn’t worth doing. The heart of your problem is likely your source of inventory: wholesalers. Now, novice investors, pay close attention: There is a type of investor called a wholesaler, but you will probably never meet a truly legitimate one. In the past two years, the concept has invaded our industry that absolutely anyone can be a wholesaler and make a fortune at double-closings. Most wholesalers have no legal right to offer, list, sell or negotiate on behalf of the legal owner of the deals they are trying to do. What that means is the contracts on these deals are so convoluted and have been assigned so many times that often neither the wholesaler nor the seller has any idea which way is up anymore. Good news: A private lender is not going to want any part of that “ghost inventory.” Private-money lenders seldom loan on wholesale deals, but that does not mean those lenders are unreasonable. They could be saving your skin. Where Viable Deals are Located and How to Acquire Them Inventory is a hot topic these days because it is very tight in many markets. How can you achieve consistently high margins on investments? Stay off the beaten path. Keeping clear of the latest, greatest investing fad will give you the best odds of finding good deals and gaining high returns. Here are three “Inventory Truths” to follow to ensure that you’re spending your time looking for leads in markets that will work for you and your investors. 1. Being the big fish in a small fund is better than the alternative. You will hear a lot of investors say they like to operate in really big hot markets because there is more success in the market and they feel that increases their odds of being successful. The idea is not without merit; you’ve probably heard the saying, “A rising tide lifts all boats.” We have different rules in real estate. For nearly all investors, the best option if you want to be in the business of flipping is to get out of your own backyard. Choose your market based on metrics rather than on geography. As you consider a market, make sure

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Georgia on My Mind

The Real Estate Investor’s Ongoing Love Affair with Atlanta Housing By Carole VanSickle Ellis It had been more than three years since Atlanta, Georgia, had posted a double-digit temperature, but it did so this past June when the heat index hit 100. It’s also been about three years since the city’s housing market posted double-digit gains in value, but that doesn’t really worry local investors, local businesses or even local developers. Across nearly all real estate sectors, investors still believe in Atlanta. “Unlike some other hot-but-higher-priced housing markets, there is not much evidence yet that the Atlanta housing market has overheated,” said Daren Blomquist, vice president of market economics at Auction.com. “There is evidence of a recent slowdown in the number of sales, and the rate of home price appreciation is calming down a bit, but Atlanta is performing better than the nation on both of these metrics.” However, Blomquist and other local investors, such as Robert “RJ” Palano and Sanjay Raghavaraju, warn that a rising volume of available inventory could compel investors to accept shrinking profit margins in 2020 and beyond. Palano serves as acquisitions director for real estate investing company Buy Cash Flow Properties. He has been acquiring properties in Atlanta for decades. He describes the market as “frothy,” although he emphasized “there are always ways to find opportunities.” Raghavaraju, CEO and founder of 33 Holdings, a private equity real estate firm based in Atlanta and serving investors in North American and Asia, agreed. “We currently see a great deal of opportunity in value-add investments in single-family, office, retail and mixed-use asset classes,” he said, “but we are currently cautious at this point in time as e-commerce pushes these assets through a dramatic change. We want to see how we can be at the forefront of the changes as they happen.” 33 Holdings’ portfolio includes residential and commercial assets and development projects. Atlanta appears likely to be among the final major metropolitan areas standing as the scale begins to tip from a seller’s market to a buyer’s market in primary markets around the country. Although Atlanta, like most other 24-hour cities, has seen a certain degree of stagnation in sales volume in recent months, home prices have continued to rise. In July, the Atlanta Realtors Association (ARA) reported home sales prices were up 7.3% over the same time a year prior at a median value of $295,000. July sales also held steady in volume with July 2018, although a month prior, in June, sales volume was down nearly 13% year-over-year. The volume volatility is a result of a “mismatch between potential buyers and sellers,” ARA analysts said. They noted the prices of most homes in the area listed for sale in June were “substantially higher” than what most would-be buyers can afford. The total housing inventory in the city is just over three months’ worth, however, indicating demand is still high and the inventory is on the tight side of healthy. Residential Affordability Is Relative Fortunately for Atlanta-area real estate investors, the affordability factor in Atlanta is largely relative. While a median home price near $300,000 is certainly nothing to sneeze at, the cost of living in San Francisco, California, for example, is 96% higher. Brooklyn, New York, boasts a cost of living 82% higher. And, notably, those values come before considerations such as room to build (which concerns developers) the cost of acquiring land and materials for building new housing, or the cost of renovation. Compared to other gateway cities like Chicago, Illinois, and Washington, D.C., Atlanta’s metro rents are comparable but still favorable. Average Chicago rent in April 2019 was $1,511 each month, while D.C. posted $1,773. Atlanta rents were firmly below $1,300, at $1,272. As a result, many businesses are choosing to expand into the southeast with new regional hubs, or they are transplanting existing operations to Atlanta from other, more expensive areas. This keeps demand for real estate across sectors strong, despite the rising market heat. “As long as we stay within our operating parameters, our ‘box,’ so to speak, we are still acquiring properties, adding value, creating income-producing assets, then refinancing or reselling when the opportunity presents,” Raghavaraju said. “I doubt there is going to be a heavy slowdown in the Atlanta real estate market at this point because of how many of the fundamentals in the [national market] were corrected after the last crash.” Georgia’s business-friendly tax environment and willingness to aggressively court major corporations for headquarters and satellite offices in the state is aided by Atlanta’s relatively affordable housing when compared to other markets of similar sizes and resources. This not only brings in new commercial development and new tenants for existing commercial buildings, it also creates an ongoing demand for new residential developments as the population continues to grow and employees follow employers to the area. In January 2019, the state of Georgia lowered the corporate tax rate from 6% to 5.75%. It also added its own incentives to existing Opportunity Zone program incentives, offering new and existing businesses creating jobs in qualified opportunity zones (QOZs) the chance to qualify for tax credits of up to $3,500 per job. The city recently inked a deal with Starbucks to provide a $250,000 Economic Opportunity Fund grant to the company to support the creation of a new satellite office in the area. “The entire state has a long history of policies focusing on bringing in companies to insulate and build up the economy, and Atlanta reaps the vast majority of the benefits of those policies,” said Harding Easley, an account executive with Yardi Matrix. Easley noted that in 2019 alone, Atlanta was the recipient of 850 new jobs from Norfolk Southern (and associated new office space development), 1,000 potential “career opportunities” sourced from the BlackRock’s newest “innovation hub” (iHub) and 600 new jobs from Salesforce, which is already invested in the city and will take over the remainder of its existing building, renaming it Salesforce Tower Atlanta. Additionally, Pullman Yard Development

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