The enemy of long-term planning for businesses is uncertainty. Election years are always a challenge, but the year 2020 seems to be fraught with great peril for businesses both small and large alike.
The pace of new regulations coming out of Trenton is truly remarkable, and the impacts are having a real effect on companies as they scramble to adjust. Trenton seems to have announced a new war against independent contractors, which will likely dampen the growth of new small businesses. On the large corporate level, new reporting requirements for overtime, vacations and expenses of every kind are causing real pain and companies are scrambling to keep up with the myriad of edicts.
With the Nation so divided politically, we here in New Jersey have real concerns. For example, the new federal tax laws are just starting to have a real impact on personal income taxes for 2019, the impact of which is just starting to be felt in 2020. The reduction in State Income Tax deductions is has clearly devastated the high-end real estate market.
As Federal regulations go in one direction, many of those coming from Trenton are moving in the opposite direction. Take for example the removal of penalties for the personal Federal Health Insurance mandate. What Washington removes Trenton reinstates. While there is no longer a Federal penalty for not having health insurance, there is now a new State penalty here in New Jersey.
So how is all of this going to impact New Jersey businesses? I find that many business owners are having a really difficult time making long-term decisions, and office leasing is one of the biggest long-term decisions with which a business owner must come to grips.
Office leases typically run for three or five years. When an office lease expires, the business owner must now make the decision to renew the lease or to consider relocating. Landlords like stability and reward companies making long term (five year) leases with their best rental rates.
What can a business owner do when faced with making a five-year leasing decision when the owner has no idea what the company is going to look like in five years? The answer is to work with a real estate advisor who can show you effective strategies to negotiate flexible leasing terms. If this sounds like a concern to you, give us a call and find out why, at Dickstein Real Estate Services, “OUR DIFFERENCE IS YOUR ADVANTAGE®”.
Categorised in: Planning