Category: News Release

The Real Estate Roundtable Stands in Solidarity Against Racism and Injustice

Posted on by Trey Jackson

Statement from Real Estate Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.)  and Roundtable President and CEO Jeffrey DeBoer:

Systemic racism and injustice is a pandemic that has plagued our nation for far too long. 

The real estate industry must help to eliminate at its core this scourge in our society and economy.  

Our industry must prioritize efforts to mitigate racism’s impact with nothing less than the ultimate goal to eradicate it.  

We must be persistent with these efforts long after we recover from the coronavirus in the coming months.        

The killings of George Floyd and Breonna Taylor reflect deep systemic racism and injustice in America. These crimes are horrific but they are not isolated incidents.

As leaders in the real estate industry, and as citizens of our great nation, of course we must condemn overt forms of racism. Insidious forms of discrimination embedded in our governmental and economic systems must be as loudly denounced.

The Real Estate Roundtable must work harder than ever to reform our institutions so they empower folks with equal opportunities to thrive at home, at work, at school, and to rise out of poverty. Vandalism is not the answer, and innocent business owners should not be collateral damage particularly as they are trying to re-hire their workers after being shuttered for weeks.  “Certain conditions continue to exist in our society which must be condemned as vigorously as we condemn riots,” Dr. King preached – words that resonate profoundly during these turbulent times as they did in 1967.  We should all pause and continually study his “The Other America” speech.

Without significant, measurable actions that make deliberate progress to halt abuse and inequality, our nation is destined to repeat again and again the failures of the past. 

We must do our part to set the country on a new path. Black people, brown people, poor people, indigenous people, disabled people, LGBTQ people — the American people — must all be able to take it on faith that they are fully and equally protected under our laws and that hard work, education, and determination can take you where you want to go in life.

The moment for leadership is now. The Real Estate Roundtable commits to motivate meaningful and lasting change within our spheres of influence.

These are not hollow words.  We consider it a moral and economic imperative for our industry and organization to take immediate and concrete actions that stand against racism and for inclusion.

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Commercial Real Estate Executives Report Stable Market Conditions for Q3

Posted on by Trey Jackson

Despite Positive Sentiment About Q3 and Future Market Conditions, Industry Remains Cautious

(WASHINGTON, D.C.) — Commercial real estate industry leaders continue to see balanced and stable economic market conditions, according to The Real Estate Roundtable’s 2019 Q3 Sentiment Index released today. 

“As our Q3 Index shows, industry executives are entering the second half of the year with confidence in stable market fundamentals, supported by a solid economy with low employment,” said Real Estate Roundtable President and CEO Jeffrey DeBoer. “Although there is political uncertainty and the economic recovery is historical in length, commercial real estate market dynamics remain sound, with balanced supply and demand in most markets, and debt and equity readily available, particularly for high grade investments,” DeBoer added.

The Roundtable’s Q3 2019 Sentiment Index’s registered a score of 50 — a one point decrease from the previous quarter. [The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.]  Both the Current-Conditions Index of 53 and Future-Conditions Index of 48 for this quarter remained the same from the previous quarter, reflecting the stabilized real estate market conditions and the overall economy.

The report’s Topline Findings include:

  • The Real Estate Roundtable Q3 2019 Sentiment Index registered a score of 50 – a one point decrease from the previous quarter. Survey participants are confident in today’s market dynamics. However, many respondents feel the US real estate market has become fragmented during this cycle and is more accurately examined as a group of separate but correlated markets distinguished by geographic location and property type.
  • Many respondents feel a change in the market is imminent, but are unable to identify a definitive potential cause for a decline as they recognize economic fundamentals appear strong. Nearly half of respondents suggested market conditions one year from now would be similar to the prevailing conditions today.
  • Asset prices remain high for the best assets in the best locations. Many question whether the real estate cycle may be nearing an end and prices could decline in the near future. Sixty percent of respondents believe real estate asset values will be the same one year from now.
  • Availability of debt and equity capital remains strong for high grade investments. Respondents identified a trend of renewed construction financing availability from financial institutions which had previously pulled back from the market.

While 50% of survey participants reported Q3 asset values today are “about the same” compared to this time last year, 60% of respondents believe that one year from now, values will be “about the same” suggesting real estate asset pricing will remain steady through the remainder of the year. Some respondents believe there is still opportunity for growth for high quality assets in certain markets. 

Data for the Q3 survey was gathered in July by Chicago-based FPL Associates on The Roundtable’s behalf. 

View Full Report

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Real Estate Roundtable Re-Elects Ventas’ Debra A. Cafaro as Chair; Installs Three New Members to Board

Posted on by Trey Jackson

FY2020 Roundtable Board of Directors Effective July 1

(WASHINGTON, D.C.) — As The Real Estate Roundtable marks its 20th anniversary, its members have re-elected Debra A. Cafaro (Chairman and Chief Executive Officer, Ventas, Inc.) as Chair, while approving its Board of Directors for the 2020 fiscal year (July 1, 2019 – June 30, 2020).

The election results were announced in June by Roundtable President and CEO Jeffrey DeBoer during the organization’s Annual Meeting in Washington.  The Roundtable’s FY2019 Annual Report – Building Strong Public Policy: Now and For the Future – was also released during the June meeting.

The 23-member FY2020 Board is elected from the membership and includes four elected leaders of national real estate trade organizations from The Roundtable’s 17 partner associations.  Three new Roundtable members join the FY2020 Board.

Cafaro, whose three-year term as chair began July 1, 2018, said, “We welcome our three new industry leaders to the Board and express gratitude for the service of our three outgoing members, who contributed greatly to The Roundtable’s success in the past year.  With such deep expertise among our membership, we will develop practical solutions to the pressing policy challenges ahead that not only affect our industry, but provide a positive impact to communities throughout the nation.”

DeBoer stated, “As we move beyond our first two decades of advocacy work in Washington, The Real Estate Roundtable will continue to bring together the top leaders in commercial real estate with our partner real estate organizations.  Our mutual goal remains consistent – provide policymakers with fact-based analysis that supports responsible economic growth policies, creates sustainable jobs and increases the quality of life for working Americans.”

Joining The Roundtable’s Board of Directors as of July 1 are:

  • Scott Jones, Principal, Jacobs, Inc. and Chairman of Building Owners and Managers Association (BOMA) International
  • Amy Rose, President & CEO, Rose Associates
  • Robert Spottswood, President of Spottswood Companies and Chair of the American Resort Development Association (ARDA)

See the complete list of the FY2020 Roundtable’s Board of Directors here.

Stepping down from The Roundtable Board as of July 1 are:

  • Tom Baltimore, Jr., Chairman, President & CEO of Park Hotels & Resorts, and Immediate Past Chair of Nareit
  • Steve Hason, Managing Director and Head of Americas Real Estate & Infrastructure with APG Asset Management US and Immediate Past Chair of PREA
  • David Neithercut, former President & CEO of Equity Residential

Collectively, Real Estate Roundtable members’ portfolios contain over 12 billion square feet of office, retail and industrial properties valued at nearly $3 trillion; over 2 million apartment units; and in excess of 3 million hotel rooms. Participating trade associations represent more than 2 million people involved in virtually every aspect of the real estate business.

 

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The Real Estate Roundtable Calls On Congress to Reform and Reauthorize EB-5 Investment Program by Sept. 30

Posted on by Trey Jackson
(Washington, D.C.) – Real Estate Roundtable President and CEO Jeffrey DeBoer today said congressional reauthorization of EB-5 “regional centers” needs to pass before the investment program expires on Sept. 30, and that the reauthorization should include measures to improve the program’s transparency and accountability along the lines of reforms outlined in an August 12 report by the U.S. Government Accountability Office:
 
“The Real Estate Roundtable strongly supports the EB-5 program. It provides unique gap financing for large and small projects across the nation and creates American jobs at no cost to taxpayers.  Congress should extend EB-5 regional centers before they expire on September 30, 2015, and at the same time make needed reforms to improve the integrity, administration and transparency of the program.  
 
“The August 12 Government Accountability Office report provides a blueprint to rally Congress into action after Labor Day.  The report outlines reforms to improve the decades-old EB-5 program that will continue to meet the overriding objectives of job creation and economic growth. This GAO report responds to bipartisan congressional requests to review and comment on the program. The report focuses on measures to safeguard national security, deter evolving risks of investor fraud, and clarify accepted government methodologies to show job creation.  Its findings are commendable and pending bipartisan bills presently address these identified concerns. This report can now be the catalyst that points the way toward reform and multi-year reauthorization by Congress.
  
“An estimated 136,000 American jobs – and nearly $7 billion in foreign investment dollars – could be forfeited if Congress fails to act.  Since the early 1990s, these regional centers have directed capital to help finance development projects and have always been reauthorized by wide bipartisan margins.  From 2005-2013, EB-5 brought in a minimum of $5.2 billion in private investment to the U.S. – with a minimum of $1.6 billion in 2013 alone.  
    
“Smart government policies are critical to enable America to compete in the global marketplace to attract foreign investment dollars – and put Americans to work – in rebuilding infrastructure, modernizing buildings, and developing resilient 21st century communities where we live, work, and play.  Businesses, local economic development agencies, and other key stakeholders should not wait.  They should now urge their Senators and Representatives to act swiftly
 
 

Commercial Real Estate Executives Report Positive Q1 Market Conditions

Posted on by Trey Jackson

Sentiment Future Clouded By Uncertainty of Economy’s Historic 10-Year
Expansion Cycle 

(WASHINGTON, D.C.) — The Real Estate Roundtable’s 2019 Q1 Sentiment Index released today reveals confidence from commercial real estate industry executives that today’s fundamentally sound CRE markets will prove resilient when the decade-long expansion of the U.S. economy inevitably slows down.  The historically long economic expansion, stable interest rates and demand driven supply have sustained the current healthy real estate market conditions.  Unpredictability about the future longevity of the economic expansion tempers the forward looking industry outlook.     

“The unsettling year-end capital market turbulence caused a degree of early 2019 industry concern.  However, as the first quarter moved forward, the equity markets strengthened and positive job creation continued to fuel steady economic growth.  These conditions bolstered the already well-balanced commercial real estate markets in Q1,” said Roundtable CEO and President Jeffrey D. DeBoer.  “Looking ahead, our CRE executive survey reveals the timing of a natural economic cycle slowdown is concerning, but that is moderated by fundamentally sound commercial real estate markets,” DeBoer added.

The Roundtable’s Q1 2019 Sentiment Index registered at 45 – a five point drop from the previous quarter.  [The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.]  This quarter’s Current-Conditions Index of 47 decreased six points from the previous quarter, while this quarter’s Future-Conditions Index of 42 came in at five points lower compared to Q4 2018.

The report’s Topline Findings include:

  • CRE executives recognize that a historic decade of U.S. economic expansion has benefited today’s healthy commercial real estate markets.  Q1 survey respondents feel a cyclical slowdown for the U.S. economy could be on the horizon.  Respondents also note that a possible decrease in economic growth may not significantly adversely affect well-balanced, fundamentally-sound CRE markets. The Roundtable’s Q1 Economic Sentiment Index registered 45, a five-point drop from the previous quarter.  
  • Survey participants were quick to identify the economy’s current, strong fundamentals as a significant influence on healthy Q1 real estate market conditions.  Many respondents also suggest they have diversified their investment focus and are placing capital into less traditional real estate property types.
  • Respondents pointed to examples of increasing asset prices in certain markets and many suggested they view the pricing environment to be reaching, or in some cases, at peak. Multiple survey participants suggested some markets have plateaued.
  • Debt and equity remain plentiful for the best assets in the best markets, but is becoming challenging for secondary or tertiary market investments. Respondents also reported increased competition among lenders for business.

While 46% of survey participants reported Q1 asset values today are “about the same” compared to this time last year, 40% of respondents believe that one year from now, values will be “about the same.”  Many respondents noted asset values in some markets may have reached a plateau.

DeBoer noted, “Over the last decade, the commercial real estate industry has not overbuilt or over-leveraged, resulting in disciplined markets that could act as a resilient buffer to any potential slowdown in the U.S. economy.  Our Q1 survey shows industry executives have concerns over unpredictable influences on the economy, such as the recent government shutdown and uncertain outcome of ongoing international trade talks.  Policymakers need to focus on bipartisan pro-growth policies designed to encourage further investment, spur job creation and propel the economy forward for all.” 

Data for the Q1 survey was gathered in January by Chicago-based FPL Associates on The Roundtable’s behalf.  Full survey report.

 

 

 

The Real Estate Roundtable Elects New Leadership

Posted on by Trey Jackson

Ventas’ Debra A. Cafaro is New Chair of FY2019 Roundtable Board of Directors

(WASHINGTON, D.C.) — The Real Estate Roundtable has elected Debra A. Cafaro (Chairman and Chief Executive Officer, Ventas, Inc.) as its new Chair for a three-year term starting July 1, 2018.  She succeeds William C. Rudin (Co-Chairman and CEO, Rudin Management Company, Inc.).  The Roundtable’s membership also approved a 23-member Board of Directors for its 2019 fiscal year (July 1, 2018 – June 30, 2019).

The Real Estate Roundtable is comprised of industry leaders from the nation’s top publicly-held and privately-owned real estate ownership, development, lending and management firms.  Roundtable members focus on office, multifamily, retail, industrial, hospitality and other product types.  The FY2019 Board is elected from the membership and includes four elected leaders of national real estate trade organizations from The Roundtable’s 17 partner associations.

Ms. Cafaro leads Ventas, Inc., an S&P 500 company and real estate investment trust with a portfolio of more than 1,200 seniors housing, healthcare and research properties in the United States, Canada and the United Kingdom. 

“For two decades, The Real Estate Roundtable has taken a non-partisan approach aimed at providing practical policy solutions to lawmakers in DC,” Cafaro said.  “I intend to carry this approach forward, by continuing to shape and articulate a unified real estate industry perspective for policymakers, and as the first woman elected to this role, to showcase the diversity of our highly respected membership on national public policies.”

Cafaro added, “Above all, we must uphold our independent and respected position on Capitol Hill, emphasizing the industry’s economic role as a job creator; cornerstone for retirement savings; and a significant source of state and local budget revenue that in turn funds essential services, including police and fire protection.”

Ms. Cafaro joined The Real Estate Roundtable’s Board of Directors in 2011, served as Board Secretary in 2015 and was elected Chair-Elect and Secretary in 2017.

The Roundtable’s Immediate Past Chair William Rudin noted, ““I was honored to serve as the Roundtable Chair the past three years and pleased that Debra will succeed me.  She has an incredibly successful background, a sterling reputation, and the positive skills and qualities needed to successfully prioritize and advance the real estate industry’s policy agenda in Washington.”

Roundtable President and CEO Jeffrey D. DeBoer said, “The Roundtable now begins our 20th year of bringing together the leaders in our industry with the major industry trade associations to work positively with national lawmakers on policy issues related to our industry and the overall economy.  Our past success has been directly related to our high quality membership, our fact-based, nonpartisan problem-solving approach to policy issues, and the collective work with the overall industry .  We look forward to Deb Cafaro as our new Chair, not only to carry on our traditional approach to Washington, but also to lead The Roundtable to a new, enhanced level of effectiveness.”

Cafaro has received multiple professional recognitions, including one of the World’s 100 Most Powerful Women (Forbes Magazine), and one of the 50 Best-Performing CEOs in the World for four consecutive years (Harvard Business Review).  She is also a member of the Business Council; serves on the board of PNC Financial Services Group Inc; and is an owner and member of the Management Committee of the National Hockey League’s Pittsburgh Penguins.

Also joining The Roundtable’s Board of Directors as of July 1 are: Thomas J. Baltimore, Jr., Chairman, President and CEO of Park Hotels & Resorts and Chair, Nareit®; Tray E. Bates, CCIM SIOR CIPS, Principal, Bates Commercial LLC and Former Commercial Committee Chair, National Association of Realtors®; Steven Hason, Managing Director and Head, Americas Real Estate & Infrastructure, APG Asset Management US Inc. and Chairman, Pension Real Estate Association; Kathleen McCarthy, Global Co-Head of Blackstone Real Estate, Blackstone; and Tara L. Piurko, Partner, Miller Thomson LLP and President, CREW Network.  See the complete list of the FY2019 Roundtable’s Board of Directors here.

Stepping down from The Roundtable Board as of July 1 are: Kenneth F. Bernstein, President & Chief Executive Officer, Acadia Realty Trust and Immediate Past Chairman, International Council of Shopping Centers; Kevin Faxon, Managing Director – Head of Real Estate, Americas, J.P. Morgan Asset Management and Immediate Past Chairman, Pension Real Estate Association; Timothy J. Naughton, Chairman, CEO and President, AvalonBay Communities, Inc and Immediate Past Chair, Nareit®; and Robert S. Taubman, Chairman, President & CEO, Taubman Centers, Inc., and Chair Emeritus, The Real Estate Roundtable.

The Roundtable’s business and trade association leaders seek to ensure a cohesive industry voice is heard by government officials and the public about real estate and its important role in the global 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.

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Real Estate Roundtable Commends Supreme Court Decision to End Tax Discrimination Against Main Street Retailers

Posted on by Trey Jackson

(WASHINGTON, D.C.) — Real Estate Roundtable President and Chief Executive Officer Jeffrey DeBoer released the following statement on today’s Supreme Court decision  (5-4) in South Dakota v. Wayfair expanding States’ authority to collect sales and use taxes on Internet consumer purchases from retailers who do not have a physical presence in a state.

“The Real Estate Roundtable commends the Supreme Court for their decision today that ends tax discrimination against Main Street retailers by expanding States’ authority to collect sales taxes on e-commerce purchases. 

Today’s ruling is long overdue and rejects an antiquated “physical presence” standard.  That test exempted on-line retailers from collecting sales and use taxes – yet imposed those obligations on traditional “brick-and-mortar” retailers. 

The ruling will enable states to collect much-needed revenue to provide public services and invest in local infrastructure projects.  Research data from The National Conference of State Legislatures and International Council of Shopping Centers shows that nearly 26 billion dollars in state and local sales taxes from online sales went uncollected in 2015. 

Many issues remain for Congress to craft a uniform, efficient system. We stand ready to assist policymakers should they respond to today’s decision with legislation that provides our nation’s businesses with  fair standards to collect the tax that is owed on online sales.”

The Roundtable on March 5, 2018 joined The International Council of Shopping Centers, Investment Program Association, Nareit®, the National Association of REALTORS® , the National Multifamily Housing Council, NAIOP, the American Farm Bureau Federation and the South Dakota Farm Bureau Federation in filing an amicus curiae brief.  

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.

Passage of Dodd-Frank Reform Encourages Investment, Economic Growth in Local Communities

Posted on by Trey Jackson

Roundtable-Supported Measure Will Promote Job-Creating Projects by Clarifying CRE Acquisition, Development and Construction (ADC) Regulations

(WASHINGTON, D.C.) — Financial deregulation legislation (S. 2155 ) passed today by the House of Representatives (258-159) includes significant reforms to the Basel III High Volatility Commercial Real Estate (HVCRE) Rule that will lower financing barriers for job-creating projects that bring positive investment to local communities throughout the country.

Today’s Dodd-Frank reform legislation, previously passed by the Senate in March, is expected to be signed by President Trump this week. Real Estate Roundtable President and CEO Jeffrey DeBoer noted the years of legislative effort to pass the Economic Growth, Regulatory Relief, and Consumer Protection Act.  “The HVCRE reforms included in this bill will help ensure that important real estate construction activities are funded, which is positive for local job creation and economic growth,” DeBoer said.

He added, “The Roundtable recognizes the diligent efforts of policymakers who worked to eliminate the needless regulatory confusion and increased borrowing costs that impeded Acquisition, Development and Construction (ADC) lending. We recognize the dedication of congressional leadership in the Senate and House, including Senate Banking Committee Chairman Mike Crapo (R-ID) and House Financial Services Committee Chairman Jeb Hensarling (R-TX), for their work to pass S. 2155 – and we look forward to President Trump’s signature on this important legislation,” DeBoer said.

The bipartisan HVCRE measure originally was co-sponsored by House Financial Services Committee members Robert Pittenger (R-NC) and David Scott (D-GA) as the Clarifying Commercial Real Estate Loans bill (H.R. 2148) – and passed the House by voice vote in November of last year.  The Senate Banking Committee then took up an identical HVCRE bill (S. 2405) co-sponsored by Senators Tom Cotton (R-AR) and Doug Jones (D-AL), which passed in March as part of the Senate’s broader Dodd-Frank reform legislation (S. 2155).   Today’s passage by the House of S. 2155 / H.R. ?? includes the same language and clarifications to the Basel III High Volatility Commercial Real Estate (HVCRE) Rule.

The new measure addresses key deficiencies in the agencies’ current and proposed regulations by providing the following modifications and clarifications to either an HVCRE or High Volatility Acquisition, Development or Construction (HVADC) loan:

  • Commercial borrowers will be able to satisfy the 15% equity requirement through the appreciated value of contributed land/property – versus the cost basis under the current rule.  
  • A new exemption would be added to the HVCRE rule covering acquisition/refinancing loans for performing income producing properties.   It clarifies that loans made to acquire existing property with rental income and/or do cosmetic upgrades and other improvements don’t trigger the capital penalty.
  • Allows borrowers to use internally generated capital in the project and, once the development/construction risk period has passed, outside the project, rather than forcing them to refinance the loan (possibly away from the original lender).
  • All ADC loans made prior to January 2015 would be grandfathered and do not have to satisfy current HVCRE exemption criteria.
  • Banks would able to withdraw HVCRE status prior to the end of an ADC loan’s term.

The Real Estate Roundtable’s HVCRE Working Group, co-chaired by Sullivan and Worcester Partner Joseph Forte, and PNC Real Estate Senior Vice President William Lashbrook, played a key role in advancing these reforms since 2015. 

Forte said, “This legislative action is a welcome solution to a poorly designed regulatory capital scheme that was not matched with risk. This caused an unnecessary cost burden to all commercial banks and their real estate development customers.  In addition, it restores to borrowers the ability to offer appreciated land value as equity to banks, when validated through appraisal practices established in earlier statutes.  In clearly defining HVCRE exposures, this legislative solution halts the regulatory experimentation in creating pools of commercial real estate development risk, including last year’s HVADC trial balloon of a use of proceeds test on unsecured transactions, requiring capital support where it did not exist. ”  

The Roundtable and twelve other real estate organizations on March 2, 2018 sent a comment letter detailing the industry’s HVCRE policy positions and urging inclusion of the HVCRE reforms in a broader Dodd-Frank reform package (S. 2155).

Passage of Tax Legislation Will Boost Capital Investment and Job Creation

Posted on by Trey Jackson

Taxation of Commercial Real Estate Development and Ownership
Will Continue on Economic Basis


(WASHINGTON, D.C.) – Real Estate Roundtable President and Chief Executive Officer Jeffrey DeBoer today applauded congressional policymakers on passage of the most significant tax legislation in more than three decades (H.R. 1).  DeBoer stated:

“By reducing barriers to private sector capital formation and business investment, the tax overhaul legislation passed by the House and Senate this week will boost economic demand and job growth.

As this landmark tax bill heads to President Trump for his signature, The Real Estate Roundtable recognizes the diligent efforts of policymakers on Capitol Hill and in the White House to see this legislation through to the finish line.

Enactment of the bill will ensure that U.S. commercial real estate development and ownership will continue to be in line with the  underlying economics of real estate assets and transactions, thereby avoiding economic distortions. 

By strengthening the overall economy and spurring broad-based growth, this tax bill will allow commercial real estate to continue its role as a principal driver of economic growth and job creation.  The legislation will also allow our industry to put more people to work modernizing and improving existing properties such as office buildings, shopping centers, apartments and industrial properties. These investments will in turn support the industry’s efforts to meet the changing and growing needs of American businesses and consumers.

H.R. 1 also decreases the tax burden on all job-creating business entities, not only C corporations.  By promoting entrepreneurship and productive risk-taking at all business levels, these legislative changes will help accelerate economic growth, lift wages and create jobs.

The Roundtable plans to monitor the economic consequences of this historic tax legislation and provide industry metrics to relevant government agencies as they draft interpretative regulations in 2018.”

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House Passage of Tax Reform First Step to Encouraging Greater Job Creation and Economic Growth

Posted on by Trey Jackson

(WASHINGTON, D.C.) – Real Estate Roundtable President and Chief Executive Officer Jeffrey DeBoer released the following statement on the Tax Cuts and Jobs Act passed today by the U.S. House of Representatives.

“The Real Estate Roundtable strongly supports the House of Representatives’ effort to kick-start economic growth and job creation through the Tax Cuts and Jobs Act.  Today, outdated and overly complicated tax laws are a drag on the broader U.S. economy.  By reducing barriers to private sector capital formation and business investment, tax reforms in the House bill would boost economic demand and job growth.

The Tax Cuts and Jobs Act would reduce the tax burden on all job-creating businesses.  By spurring the overall economy, the legislation would allow the commercial real estate industry to put more people to work modernizing and improving existing properties — office buildings, shopping centers, apartments, industrial properties — to meet the changing and growing needs of American businesses and consumers.

The Act would also ensure that real estate continues to be taxed on an economic basis — avoiding excessive incentives or disincentives that distort markets and economic activity. 

By creating a new 25 percent tax rate for the owners of pass-through businesses — partnerships, LLCs, S corporations, and REITs — the Act would lower the cost of capital and stimulate entrepreneurial activity and business expansion.  Today, pass-through businesses earn over 60 percent of business income in the economy, and over the last 25 years, they are responsible for more than 60 percent of net new jobs in the country.

The reduced pass-through tax rate, as structured in the House legislation, is a powerful provision that should serve as a cornerstone of the final tax bill.” 

As the Senate debate on its own tax reform legislation proceeds, The Roundtable will continue to work with policymakers in anticipation of a final tax reform bill that strengthens the American economy, jobs and future investment.