Monday, November 23, 2009

Last week we discussed financing real estate. During the class lecture we learned about accelerated depreciation. Looking back it all seems very logical. Today buildings are built with cheaper materials that don't last as long. The buildings seem to depreciate quicker and aren't worth as much. The theory behind this seems to be that if you can accelerate the process then you can reinvest into a new building. The drawback is that we are now stuck with too many buildings and buildings just don't go away.

One solution, as we saw during our site visit to the Alley, is to renovate existing spaces. The idea has obviously taken off in downtown Montgomery. The new urban style is very appealing and has really helped to bring more people to an area of town that has been neglected for quite some time.

Happy Thanksgiving!

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