Private Equity Real Estate Investments

“Benefits of private equity real estate investments include owners’ ability to obtain diversification benefits, to earn current income, and to achieve tax benefits.”

How does private real estate beenfit from tax perspective or from diversification perspective?

BUMP. Anyone?

Diversification results from private real estate being less correlated with the overall market. I believe the tax benefits come from recognizing depreciation over shorter time periods as compared to actual life of the property/building (so your depreciation expense is higher and you pay less taxes).

REITs (but not REOCs) are exempt from corporate taxation.

I agree, in some countries (I think, for example, in the US it is the case), the depreciable life of RE is shorter than the actual life) resulting in lower taxable income.

If I remember :slight_smile: they have to distribute the profits in order to be tax exempt the us case. In view that they have to have to distribute their earnings to be tax exempt they are more cautious where to invest …

anyone ?