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For certain like-kind exchanges (e.g., "safe-harbor" exchanges), we act as the required Accommodation Titleholder whereby we establish an entity to take the title, on a temporary basis, to real estate that is being purchased (or sometimes sold) in order to facilitate the exchange transaction. These independent accommodator entities are established solely for the purpose of holding real estate for a specific individual client and transaction. As is the case with all of our SPEs, there is no comingling of entities among or between clients.
BUSINESS STRATEGY & ANALYSIS
There are many ways of Integrating the SPE strategy into business plans and transaction scenarios to produce a competitive advantage or increase profitability. We have several tools and models available to analyze the potential benefits of utilizing an independent SPE - we always welcome the opportunity to assist in evaluating the benefits of SPE strategy for both our existing and our potential clients.
Using an SPE for leasing business real estate and assets can yield not only cash flow and cost benefits but also financial statement presentation and tax advantages. For instance, the tax deductibility of lease payments made to an SPE is not limited to debt interest payments; this can produce significant benefits for the client.
Commonly, investors value increased flexibility for the timing of their sales and purchases or in separating the various components of complex transactions - many times for like-kind exchange and other tax-related purposes. The recent tax-law changes are producing new opportunities in this evolving area of opportunity. Also, we are frequently able to, through our market contacts, assist our clients in identifying investment opportunities.
Segregating risk and potential liability may be a motivation for using the SPE strategy.