Author: Trey Jackson

Roundtable, Coalition Partners Urge FIRPTA Reform as House Tax-Writers Seek Multi-Year Infrastructure Funding Solutions

Posted on by Trey Jackson

(WASHINGTON, D.C.) — In conjunction with a House Ways & Means Committee hearing today exploring long-term funding solutions for the Highway Trust Fund (HTF) — whose latest funding “patch” expires July 31 — The Real Estate Roundtable and a coalition of business and labor organizations urged reform of the Foreign Investment in Real Property Tax Act (FIRPTA) as a “simple, cost-effective” way to “galvanize billions in new private capital for investment in U.S. transportation and infrastructure.”

In a letter submitted for the hearing record, the coalition said the 1980 law “is a major hurdle for the foreign investor seeking to invest in US infrastructure projects.” It also characterized FIRPTA as a “punitive,” “anti-competitive” law that “subjects foreign investment in U.S. real estate or infrastructure to a much higher tax burden than applies to a foreign investor purchasing a U.S. stock or bond, or an investment in any other asset class.”  In some cases, the FIRPTA tax burden is as high as 54.5 percent. [A similar letter is being submitted to Senate tax-writers in conjunction with their scheduled HTF hearing tomorrow.]

In the view of The Roundtable and its coalition partners, any long-term HTF funding bill should include FIRPTA reforms such as those in H.R. 2128 — legislation introduced by Ways and Means Committee members Kevin Brady (R-TX) and Joseph Crowley (D-NY). The “Real Estate Investment and Jobs Act of 2015” would increase (from 5 percent to 10 percent) the ownership stake that a foreign investor can have in a U.S. publicly traded REIT without triggering FIRPTA liability (extending this provision to certain collective investment vehicles); and exempt foreign tax-exempt pension funds from FIRPTA altogether. 

“By providing relief from FIRPTA, the Brady-Crowley bill will spur domestic real estate investment, create jobs and help provide the capital we need to rebuild the nation’s crumbling infrastructure,” said Roundtable President and CEO Jeffrey D. DeBoer. Since the bill’s re-introduction in April, 31 (of 39) Ways & Means Committee members have signed on as co-sponsors.

Earlier this year, the Senate Finance Committee unanimously passed legislation (S. 915) that contains a significant part of what The Roundtable and its coalition partners are seeking, in terms of FIRPTA reform. Also illustrating the strong bipartisan support for FIRPTA reform, the full House cleared similar legislation in 2010 by a vote of 402-11. 

Because of the close connection between FIRPTA and infrastructure investment, the Administration included a FIRPTA reform proposal in its 2013 Rebuild America infrastructure initiative, and in its last three budget submissions to Congress. 

Real Estate Roundtable Applauds House Vote on Bill to Spur Energy Efficiency in Leased Commercial Space

Posted on by Trey Jackson
(WASHINGTON, D.C.) — The Real Estate Roundtable commends today’s House passage of “Tenant Star” legislation that will foster energy efficiency in leased commercial space, thus addressing a critical piece of the energy efficiency equation in commercial buildings, and helping to curb greenhouse gases while boosting innovation and the U.S. economy.

With Tenant Star already cleared by the Senate on March 27, the legislation can now be sent to the White House for President Obama’s anticipated signature.

     The bill authorizes the U.S. Environmental Protection Agency (EPA) and Department of Energy (DOE) to create a voluntary “Tenant Star” program modeled after the highly successful, market-based ENERGY STAR program. Once it is signed into law — and implementing guidelines are written — “Tenant Star” will provide national branding recognition to property owners and tenant teams that design, construct and operate highly energy efficient spaces within commercial buildings.

     The House-passed bill tracks legislation long championed by Senators Rob Portman (R-OH), Jeanne Shaheen (D-NH), Kelly Ayotte (R-NH) and Michael Bennet (D-CO)  in the upper chamber (“Tenant Star” also cleared the Senate as an amendment to Keystone XL pipeline legislation earlier this year).  The key House sponsors, Reps. David McKinley (R-WV) and Peter Welch (D-VT), previously won overwhelming House passage (375-36) in March 2014 and pursued approval again today to ensure that both sides of Capitol Hill passed “Tenant Star” in the same congressional session.

     Empire State Realty Trust (NYSE: ESRT) Chairman, President and CEO Anthony E. Malkin, who chairs The Roundtable’s Sustainability Policy Advisory Committee (SPAC), said, “Tenant Star is a voluntary program — with no federal mandate or cost — that will encourage commercial tenants and landlords to design and construct leased spaces in office buildings to achieve high levels of energy performance.”

     With office tenants often accounting for over 50 percent of the energy consumed in an office building, he explained, “Tenant Star will encourage office tenants to incorporate into the construction of their leased premises common sense, cost-effective measures that yield excellent returns on investment over short pay-back periods.” 

     Added Malkin, “Tenants will favor landlords whose buildings can support such installations. Broad adoption will save businesses billions of dollars on energy costs in the coming years. The reduced consumption will afford savings in future capital outlays for energy generation and related infrastructure.”

     Real Estate Roundtable President and CEO Jeffrey D. DeBoer said, “‘Tenant Star’ is a ‘triple win’ that will spur the economy by creating jobs, enhancing energy security, and preserving our environment by cutting greenhouse gases. It will boost innovation in the real estate sector and go a long way toward ensuring that our country’s commercial and multifamily stock — and the separate spaces leased within them — are at the vanguard of advances in technology and energy conservation. The ‘Tenant Star’ program will allow building owners to attract financiers, investors, and tenants in the increasingly competitive national and global markets for real estate.”

 

     The Real Estate Roundtable supports legislation that encourages energy efficiency and energy production as components of an “all of the above” national energy policy.

“We look forward to our continued work with Congress and the Obama Administration to ultimately sign ‘Tenant Star’ into law,” DeBoer said. “Meanwhile, we continue working to advance broadly supported measures that  strive to balance economic growth with complementary polices to foster environmental stewardship.” 

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About The Real Estate Roundtable: The Real Estate Roundtable brings together leaders of the nation’s publicly-held and privately owned real estate ownership, development, lending and management firms with the leaders of national real estate trade associations to jointly address key national policy issues relating to real estate and the overall economy. Collectively, Roundtable members’ portfolios contain over 12 billion square feet of office, retail and industrial properties valued at more than $1 trillion; over 1.5 million apartment units; and in excess of 2.5 million hotel rooms.  Participating trade associations represent more than 1.5 million people involved in virtually every aspect of the real estate business.
 
About Empire State Realty Trust:  Empire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous office building. Headquartered in New York City, the company’s office and retail portfolio covers 10.0 million rentable square feet, as of Dec. 31, 2014, consisting of 9.3 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Conn., and two in Westchester County, N.Y.; and approximately 728,000 rentable square feet in the retail portfolio.