Commercial real estate investors have taken a financial hit recently due to higher borrowing costs. It's left some wondering whether their next development is affordable.
Thankfully, options are available to make your next commercial property development economically viable. The state has several programs with some attractive incentives. Here are three available to commercial property owners in New Jersey.
1. The ERG Program
One of the best commercial property tips is to use state funding incentives. And that's the first option on our list. The ERG (Economic, Redevelopment, and Growth) Program is a financial incentive program funded by the state of New Jersey.
That funding comes from the NJEDA (New Jersey Economic Development Authority), which has developed this program to stimulate economic growth in the region.
The program gives property developers tax credits. To qualify, you must meet two criteria:
- You must demonstrate a funding gap in your development project
- The development must be in a designated redevelopment area
- You must meet the investment spending threshold for that area
In some zones where developers offer to redevelop an empty commercial property, bonuses of up to 20% of the project costs are available. So, the financial incentives are attractive and generous. Plus, it's a great way to revitalize communities, attracting new businesses and further investment.
2. The Grow New Jersey Assistance Program
The state created the Grow New Jersey Assistance Program to boost the economy, and it offers several opportunities for commercial property investors.
The program provides tax credits to investors. Like the ERG program, you must be able to demonstrate that you are investing in a designated redevelopment area. That includes places like:
- Urban areas in major cities like Newark
- Designated Garden State growth zones like Atlantic City and Camden
- Areas with nearby transportation links, like Elizabeth
- Some suburban regions like Burlington
To get the tax credits available, you'll need to show how you can contribute to this economic growth by providing evidence of job creation. However, it's a great way to use your capital to invest in commercial centers that are seeing a surge in redevelopment from other sources.
3. Historic Preservation Tax Credits
Perhaps you are interested in historical buildings as a commercial property investor, in which case the Historic Preservation Tax Credits program might offer you some assistance.
It supports the redevelopment of historic properties in the state to help preserve their unique architecture and links to cultural heritage.
When you invest in this type of property, you can get a tax credit that covers some of the money you spent redeveloping it. It's the state's way of attracting investment in buildings that might otherwise not be financially viable.
If you want to use these tax credits, your commercial property must be on the New Jersey Registers of Historic Places.
Making Development More Affordable for Commercial Property Owners
Commercial property investment might be more affordable than you realize. If you want to invest your money, see if you qualify for one of these three real estate incentives available for commercial property owners.
PMI Property Service's tax and accounting background makes us uniquely placed in the world of real estate in South New Jersey. We can help you make the most of your commercial investments, and you can discover more about the property owner benefits using our services here.
