September 2022 Lookback
Early September is the time when I look back at the months prior and focus on the push to year end. Below are a few trends we are seeing; I would enjoy discussing these with you:
SPACs: The SEC has proposed historic changes to its regulations. The result for our specialists – a great increase in Independent Fairness Opinions for de-SPAC transactions.
Private Equity: Regulators continue to emphasize independent valuations for funds; we continue to service their financial reporting needs with regular/quarterly fair value analyses of debt and equity investments and instruments.
Independent Fairness Opinions are being recommended by the SEC for Advisor-Lead Secondary Transactions. M&A has been strong since 2020 leading to domestic and international purchase price allocation work for us. Recent economic volatility and uncertainty should result in more Impairment Testing for Q4.
Healthcare: Rollups in dialysis centers, physician practices, and others continue through good times and bad, so does regulatory oversight – our Healthcare specialists are assisting with both.
Energy & Infrastructure: Project development has been delayed in 2022 for many sponsors due to supply chain, labor and tariff challenges … then the Inflation Reduction Act (“IRA”) passed last month – a positive for the industry, but it has changed the way project development will proceed for some sponsors.
Project finance valuations remain our most popular service, but transaction advisory and financial reporting continues to grow as M&A and investment sources increase. The number of Wind Farm Repowering assignments are up again and will continue to increase. Offshore wind farm development will have a huge positive impact on both coasts – we are
proud to say we have experience with these.
Real Estate: The Multifamily and Industrial property segments continue to be strong; Hospitality and Retail have bounced back from their Covid doldrums. The Office market, particularly CBD locations, have some challenging times ahead. Financial reporting assignments for fund clients are increasing, financing valuations continue to be active, and
restructuring valuations may be just around the corner.
Wealth Transfer: Gifting should increase again since the current generous lifetime gift exemption (>$12MM) is scheduled to reduce by half after 2025.
Cost Segregation: Cost Segregation (actually “MACRS”) has been part of the federal tax code since 1986 but there are still investors unaware of the “gift” of accelerated depreciation. We expect another busy Q4 – Q1 2023, but it should be even busier with Bonus Depreciation decreasing in 2023.
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