News Type: Roundtable Weekly

Roundtable Schedules Town Hall Next Week on Ukraine Conflict; Zelensky Addresses Joint Session of Congress

Posted on by Trey Jackson

Vindman testifying

The Real Estate Roundtable will hold a virtual “town hall” on Friday, March 25 with Lieutenant Colonel (USA, Ret.) Alexander Vindman, former National Security Council Director for Eastern Europe during the Trump Administration, to discuss Russia’s war against Ukraine. 

Ukraine Support 

  • The Roundtable’s town hall with Vindman will address Ukrainian President Volodymyr Zelensky’s speech to Congress on Wednesday and the U.S. response thus far to the brutal Russian invasion. Zelensky’s appeal galvanized the Biden administration to release additional aid to Ukraine. (President Biden video, transcript and Axios, March 16)
  • Roundtable President and CEO Jeffrey DeBoer stated, “The Roundtable fully supports the billions in federal aid to Ukraine as its citizens continue to bravely stand up against Russian aggression. As we bear witness to the tragic violence of the invasion, The Roundtable encourages its members and all industry stakeholders to contribute to charities involved in Ukrainian humanitarian relief,” DeBoer added. (VetVoice Foundation)

Map of Ukraine

  • The Ukrainian war has compelled hundreds of American companies with business in Russia to either withdraw completely, suspend or scale back operations, or delay investments, according to the Yale’s Chief Executive Leadership Institute.
  • Hilton President and Chief Executive Officer Christopher Nassetta (Roundtable Chairman 2006-2009) announced on March 9 the company’s actions in response to the crisis in Ukraine, including:
    • Closure of Hilton’s corporate office in Moscow;  
    • Suspension all new development activity in Russia;  
    • Donation of any Hilton profits from business operations in Russia to the humanitarian relief efforts for Ukraine, and;  
    • Donation of up to 1 million room nights to support Ukrainian refugees and humanitarian relief efforts across Europe, in partnership with American Express, #HospitalityHelps.

  • Marriott International also recently announced the closure of their corporate office in Moscow, along with a suspension in opening upcoming hotels and all future hotel development and investment in Russia. (Marriott statement, March 10) 

Reviving Climate Negotiations 

Capitol Hill night mirror image

  • Separately, House Democrats this week urged the White House to revive negotiations on climate measures that were part of the moribund Build Back Better (BBB) Act. (Business Insider, March 8)
  • A group of 89 House Democrats on March 14 wrote to President Biden stating, “The more than $555 billion in climate investments in the House-passed Build Back Better Act can serve as the building block to restart negotiations.”  (House Democrats’ letter)
  • The Roundtable sent a letter to Congressional tax writers last fall detailing recommendations to improve the BBB Act’s green energy tax provisions. (Roundtable letter, Nov. 16) 

The BBB bill passed the House in November, but stalled in the Senate amid disagreements with key Democratic Senators Joe Manchin (WV) and Kyrsten Sinema (AZ). (Roundtable Weekly, Nov. 19, 2021 and Jan. 21, 2022). It remains uncertain if any revised deal will garner their support. (CNBC, March15) 

#   #   #

Roundtable and Coalition Weigh In on Sweeping SEC Proposals Impacting Private Fund Investors

Posted on by Trey Jackson

logo - U.S. Securities and Exchange Commission

The Real Estate Roundtable and 12 trade organizations recently responded to a set of sweeping, proposed Securities and Exchange Commission (SEC) rules that would significantly increase the compliance obligations of advisers to “private funds.” (Coalition letter, March 1)

Time Extension Request

  • The coalition letter detailed why time extensions are needed for comprehensive responses to two recently introduced SEC NPRMs (“Notice of Proposed Rulemaking”), which include more than 800 questions and an extensive expansion of cost-benefit analysis requests. The SEC provided a tight deadline for stakeholders to respond to the proposed rules.
  • The SEC issued two NPRMs on Jan. 26 and Feb. 9 that would significantly change how private funds are regulated. If approved, the proposed rules would require private-equity and hedge-fund managers to provide new statements on fund performance, compensation, fees and expenses. The NPRMs passed the Commission on a 3-1 party-line vote, with one dissenting Republican. (Wall Street Journal and PoliticoPro, Feb. 9)

SEC building

  • Currently, under most conditions, private companies are exempt from registration requirements put forth by the SEC, above – instead, they are regulated at the state level, where registration and disclosure requirements vary by state. The proposed rules would increase the compliance burden for private fund advisers, potentially impeding capital formation. (SEC resources: Jan. 26 News Release | Fact Sheet | Proposed Rule and Feb. 9 News Release | Fact Sheet | Proposed Rule)
  • The coalition response provided context to the NPRM requests, noting the deluge of recent SEC regulatory initiatives. The coalition letter stated, “We and our members will need simultaneously to analyze and prepare comments for these proposals as well as other significant proposals on short-selling (with the related re-opened proposal on securities lending), shortening the securities transaction settlement cycle, beneficial ownership reporting, security-based swap position reporting, and cybersecurity risk management (collectively representing more than 1,000 additional pages of text and thousands of additional individual questions from the Commission).”

A “LawFlash” report on the proposed SEC rules is available from Morgan Lewis. The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) will continue to respond to the SEC’s various proposed regulatory initiatives with its industry and coalition partners.

#  #  # 

Roundtable Convenes “Workplace Return” Town Hall Next Week with U.S. Labor Secretary; Industry Coalition Urges Full Capitol Hill Reopening

Posted on by Trey Jackson

Labor Secretary Martin Walsh

U.S. Department of Labor Secretary Martin Walsh will address back-to-the-workplace issues in a March 18 virtual town hall with Roundtable members. Participants will also include Roundtable Chair John Fish (Chairman and CEO, Suffolk); Beacon Capital Partners President and CEO Fred Seigel; Boston Properties CEO Owen Thomas; and Roundtable President and CEO Jeffrey DeBoer. Roundtable members were sent an exclusive registration invitation this week via email. (Roundtable Meetings contact) 

Reopening Momentum 

  • “Americans have learned to deal and cope and live with the coronavirus,” Secretary Walsh recently told Insider (March 4). More employees coming back to the office can “add to job creation and job growth” he explained, as restaurants, retail shops, and other small businesses cater to returning workers.
     
  • The reopening theme was also the focus of a March 9 letter to Senate and House leaders signed by over 200 organizations and companies, including The Real Estate Roundtable. The coalition urged lawmakers to fully reopen Capitol Hill buildings by July 11 “in a way that is safe for all with security measures already being used in many state legislatures.” (Coalition letter, March 9)
     
  • In addition to The Roundtable, other real estate organizations signing the letter to re-open Capitol Hill included the American Hotel & Lodging Association; American Resort Development Association; Building Owners and Managers Association; CRE Finance Council; ICSC; NAIOP, Commercial Real Estate Development Association; and the National Apartment Association. 

2022 Roundtable Policy Agenda 

Virtual SOI 2022 DeBoer and Fish

  • Reopening businesses and the country is an important priority noted in The Roundtable’s 2022 Policy Agenda: “Connection, Commitment, and Collaboration – Supporting Federal Policy Through Experience and Innovation in 2022” sent this week to Roundtable members.
  • In the policy agenda’s introduction, John Fish, above right, and Jeffrey DeBoer, above left, emphasize the national need for a safe and successful return to the physical workplace.
  • “Our state and local economies—as well as our long-term global competitiveness—depend heavily on the innovation, collaboration, and productivity fostered by an in-person work environment,” Fish and DeBoer stated.
  • The Roundtable’s policy agenda states that the nation’s long-term health, economic growth, and strength of small businesses and local governmental budgets all require safe back-to-workplace encouragement. 

Policy Agenda Issues 

RER 2022 Policy Agenda Cover

The Roundtable encourages our members and partner organizations to share the content from our policy agenda on your social media channels or websites by using our communications toolkit.  You may also follow us on social media for RER updates and the latest developments in DC via LinkedIn or Twitter:  

LinkedIn

Twitter

#  #  #

Long Overdue EB-5 Regional Center Reforms Included in Omnibus

Posted on by Trey Jackson

EB-5 and passport

A reinstatement and major overhaul of the EB-5 investment visa program passed Congress this week as part of the omnibus package that will fund the federal government through Sept 30. President Biden is expected to sign the omni today. (Roundtable news release and EB-5 Fact Sheet)

 EB-5 Reinstatement

  • The EB-5 Reform and Integrity Act is the first significant update to the “regional center” program since its creation by Congress in the early 1990s. The EB-5 language can be found in the Division BB section of the 2022 omnibus appropriations bill.
  • The Act reauthorizes regional centers for five years, which expired on June 30, 2021. The EB-5 program reforms are the culmination of years of hard work by a bipartisan group of Senators and Representatives who negotiated a pragmatic solution to modernize the investment visa program.
  • After President Biden signs the omni, the U.S. Citizenship and Immigration Services (USCIS) can re-start its procedures to review the petitions of tens of thousands of overseas investors who have been in limbo on their green card applications since last July.
  • The Act also sets new program requirements to safeguard national security, deter fraud, and promote urban and rural development with EB-5 financing provided by overseas investors. [Roundtable EB-5 Fact Sheet]

Roundtable Commends Reforms 

John Fish Suffolk CRE background

  • “The EB-5 Reform and Integrity Act gives our country a competitive edge in the global marketplace for foreign capital and it will attract investments from abroad to create jobs here at home,” said Real Estate Roundtable Chair, John Fish [Chairman and CEO, Suffolk], above, “American workers in low-income neighborhoods, downtown business districts and rural markets will benefit from EB-5 modernization because it will bring critical financing to support infrastructure and other economic development projects throughout the country.” (Roundtable news release, March 11)
  • “The Roundtable has advocated for years to clean up the regional center program and we applaud congressional passage of the EB-5 Reform and Integrity Act,” said Roundtable President and CEO, Jeffrey D. DeBoer. “The Act strikes a bipartisan compromise to get the program back on track – and reduces the litigation risk from existing investors who have been waiting in limbo on their visa applications since the program expired last July.”

“We thank House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Charles Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), and House Minority Leader Kevin McCarthy (R-CA) for their bipartisan, bicameral agreement to include comprehensive EB-5 reform in the omnibus appropriations package,” DeBoer continued. “We commend the authors of the EB-5 Reform and Integrity Act, Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA), for their work in crafting a product that has the support from a diverse stakeholder coalition.” 

#  #  # 

Congress Passes $1.5 Trillion Omnibus Funding Package With EB-5 and LIBOR Legislation

Posted on by Trey Jackson

Capitol stormy sky

Congress this week passed a $1.5 trillion “omnibus” spending package that would fund government programs through September and provide $13.6 billion for emergency Ukraine assistance. The omni also includes Roundtable-supported language to address the transition away from the London Interbank Offered Rate (LIBOR) and reform the EB-5 Regional Center Program. (See separate Roundtable Weekly story below on EB-5)

Omni Funding & Ukraine

Map of Ukraine

  • The omni passed the House on a bipartisan basis on Wednesday and the Senate last night after months of negotiations. President Biden is expected to sign the 2,741-page omnibus spending package (H.R. 2471) today to avoid a government shutdown, since previously allocated funding expires at midnight. (Wall Street Journal, March 9 and March 10)
     
  • Roundtable President and CEO Jeffrey DeBoer said, “The Roundtable applauds these bipartisan actions by lawmakers to shore up funding for government operations, and pass positive changes impacting EB-5 and LIBOR. We look forward to Congress turning its focus to other essential issues facing American businesses, workers, local communities and CRE, as outlined in our recently released 2022 Policy Agenda.
  • “The Roundtable also fully supports the billions in federal aid to Ukraine as its citizens continue to bravely stand up against Russian aggression. As we bear witness to the tragic violence of the invasion, The Roundtable encourages its members and all industry stakeholders to contribute to charities involved in Ukrainian humanitarian relief,” DeBoer added. (VetVoice Foundation)
  • The Roundtable on March 25 will hold an open Zoom discussion on the situation in Ukraine with Lieutenant Colonel (USA, Ret.) Alexander Vindman, a Senior Advisor at VoteVets and the VetVoice Foundation. More details will be forthcoming on how to register.

Omni & CRE

Chicago CRE

  • Infrastructure
    The omnibus package would also release an additional $197 billion to be spent over 10 years for energy, transportation, and other programs that were part of last year’s bipartisan infrastructure bill. (Roundtable Weekly, Feb. 11)

Reference: Appropriations bills | Ukraine Supplemental | One-page fact sheet

#  #  #

2022 Policy Agenda

Posted on by Trey Jackson

2022 Policy Agenda (entire agenda)

Intro

Tax Policy 

Capital & Credit

Energy & Climate

Homeland Security

Infrastructure & Housing

 

Russian Aggression Raises Cybersecurity Concerns for CRE

Posted on by Trey Jackson

Russia map cyber image

Russian aggression against Ukraine has included cyberattacks that could potentially spillover to U.S. networks that serve commercial real estate. (GlobeSt, March 2) 

Spillover or Direct Threats 

  • Since the imposition of American sanctions, direct Russian retaliation to U.S. networks could include malware, supply chain disruption and cyberattacks on critical infrastructure. (The Hill, March 3)
  • Senate Intelligence Committee Chairman Mark Warner (D-VA) recently told Axios that Russian cyber weapons inside Ukraine could spread to NATO member states. In 2017, Russia’s NotPetya malware was unleashed in Ukraine, causing billions of dollars in damage to companies worldwide. (Axios, Feb. 23)
  • “If you’re suddenly having 190,000 troops attack Ukraine, chances are that the cyberattack will not be a single piece of malware,” Warner told Axios. “The chances of that staying within the Ukrainian geographic border is quite small. It could spread to America, could spread to the U.K., but the more likely effect will be spreading to adjacent geographic territory [such as] Poland.” (Axios, Feb. 23)
  • GlobeSt on March 2 addressed potential cyber threats to CRE. “The largest vulnerabilities for real estate companies are systems such as HVAC, elevators, lighting, metering, parking, and physical access control,” according to Tom Shircliff of Intelligent Buildings.
  • Homeland Security Today also reported in January about a cyberattack on a German engineering firm’s building automation system that locked the owners out of the system and rendered three-quarters of several hundred devices in the building nonoperational. 

CRE’s Response 

REISAC logo x475

  • The RE-ISAC has also worked with InfraGard National Capital Region (InfraGardNCR) to establish the Commercial Facilities Cyber Working Group (CCWG), a virtual effort to share cyber threat intelligence. The group shares threat reports, ransomware victim examples, and other information on a regular basis. 
  • RE-ISAC Managing Director Andy Jabbour interviewed James Whalen, Boston Properties’ SVP, Chief Information & Technology Officer on the steps commercial real estate companies are takings to meet cybersecurity threats. (Gate 15, March 23, 2021 and Blended Threats: Holding Buildings Hostage)

FBI Recommendations 

cyber security control room

This week, the FBI recommended organizations take the following steps:

  1. Review recent cybersecurity advisories, such as the Department of Homeland Security’s recent “Shields Up” warning that urged “all organizations – regardless of size – adopt a heightened posture when it comes to cybersecurity and protecting their most critical assets.” (TechCrunch, March 2)
  2. Know your networks; especially if you have even a tangential relationship with Russia and surrounding countries.
  3. Know your Cyber Incident Response plan. If you don’t have one, you should. Make sure the FBI and info sharing are embedded in that plan. Lower your thresholds for reporting.
  4. Report mis, dis, mal information, a tried-and-true tactic of the Russian government, including on your social media.
  5. In the event of a compromise, call the FBI.

The Real Estate Roundtable’s Homeland Security Task Force continues to work with key law enforcement, intelligence agencies and the RE-ISAC on protective measures that businesses can take to create infrastructure resistant to physical damage and cyber breaches. (Information on joining the RE-ISAC)   

#  #  # 

Roundtable Recognized as Energy Department “Ally” in Better Climate Challenge

Posted on by Trey Jackson

DOE BCC

The U.S. Department of Energy (DOE) recognized The Real Estate Roundtable this week as an inaugural “ally” of the Better Climate Challenge (BCC), a voluntary program to encourage private and government owners of buildings and industrial plants to cut their GHG emissions in half. (Climate Challenge Factsheet | FAQs | BCC Launch video, Feb. 28)  

Better Climate Challenge & CRE 

Real Estate Roundtable Chair John Fish

  • “The Real Estate Roundtable is proud to partner with the Department of Energy as an ‘ally’ in the Better Climate Challenge,“ said Roundtable Chair John Fish, above, (Chairman and CEO, Suffolk). “As leaders in the CRE industry, our members welcome opportunities to innovate with DOE and other federal agencies to reimagine how our nation’s buildings can optimize efficiency, slash GHG emissions, and draw electricity from a cleaner grid.
  • “Partnerships with DOE offer significant opportunities to focus on retrofitting older buildings,” Fish continued. “Seventy-five percent of U.S. buildings were constructed in the last century. The greatest and most positive impact our industry can have on the climate crisis is to make smart investments that modernize the apartments, office buildings, and other structures where our communities live, work, learn, and socialize.”
  • The BCC to date has received commitments from more than 90 organizations from various industries, including six companies represented by Roundtable members – Empire State Realty Trust, Hilton, Jamestown LP, LaSalle Investment Management, Lendlease, and MetLife Investment Management.
  • Other real estate industry trade groups who are designated “allies” of the BCC include the Building Owners and Managers Association International (BOMA) and the American Hotel & Lodging Association (AHLA). 

Program Requirements 

DOE's Better Climate Challenge launch

  • DOE Secretary Granholm, top left, officially launched the BCC on Feb. 28 during an executive discussion with White House National Climate Advisor Gina McCarthy, middle left, Housing and Urban Development Secretary Marcia Fudge and committed partner organizations.
  • The key element of DOE’s voluntary challenge is for companies to commit to reduce direct emissions (“scope 1”), and emissions from electricity purchases (“scope 2”), by 50% over 10 years. There is no requirement to quantify or reduce indirect “scope 3” emissions.
  • The 10-year window is measured from a baseline of up to five years before a company joins the program.

  • Commitments to reduce emissions must be across a building portfolio. DOE explained that to reach the 50% emissions reduction target, companies can tally their long-term clean power purchase agreements (PPA) and associated renewable energy certificates (RECs). PPAs and RECs are increasingly common strategies used by CRE and other sectors to help deliver more renewable energy to the electricity grid. (Roundtable Weekly, November 5, 2021)
  • Participating companies must also pursue an efficiency target, to prioritize energy savings that will contribute toward the 50% reduction in portfolio-wide emissions over a decade.
  • Companies joining the program must pledge to share energy and emissions data for 10 years through EPA’s Portfolio Manager, publicly report on progress, participate in peer-to-peer exchanges, and help develop industry best practices.

Businesses who want to pursue “partnership agreement” – or trade organizations who want to participate as an “ally” – with DOE’s national leadership initiative on climate can consult with BCC online.

#  #  #

White House Requests Billions for Ukraine and Pandemic Response as Congress Rushes to Pass Omnibus Funding

Posted on by Trey Jackson

The White House with Washington Monument

Congressional appropriators received an emergency request yesterday from the White House for an additional $10 billion for Ukraine assistance and $22.5 billion for pandemic response funding. The request may complicate lawmakers’ efforts to pass an “omnibus” spending package by March 11, when current government funding expires. (Punchbowl News, March 3) 

Omni Funding 

  • Congressional appropriators may release the text of an omni bill within days, as House Democrats hope to pass a potential $1.5 trillion spending package early next week for the Senate to consider before the March 11 funding deadline. (Politico, March 3)
  • A deal on an omni package would fund the government though Sept. 30, consolidate 12 separate spending bills and release additional funds for infrastructure. (Tax Notes, Feb. 18 and Roundtable Weekly, Feb. 11)
  • Reauthorization and reform of the EB-5 visa investment program is one of the many issues being negotiated for possible inclusion in the omni funding bill.
  • If efforts to pass an omnibus deal fail, Congress could pass yet another Continuing Resolution to fund the government at current levels – while considering separate bills to fund aid for Ukraine or the U.S. response to COVID-19. 

SOTU & Climate Measures 

State of the Union 2022

  • Yesterday’s White House emergency request comes after President Joe Biden’s March 1 State of the Union address, where he sought to rebrand the multitrillion Build Back Better (BBB) spending package into a pared-down proposal called “Building a Better America.” (BGov, March 2)
  • The moribund BBB legislation stalled at $1.7 trillion, which included $555 billion in climate-related incentives. (Roundtable Weekly, Jan. 21)
  • President Biden’s address on Tuesday also touched on climate measures such as tax credits for electric vehicles, energy efficiency improvements, and clean energy production. (White House Fact Sheets on Clean Energy and Infrastructure, Feb. 28)
  • “Let’s provide investment tax credits to weatherize your home and your business to be energy efficient and get a tax credit for it; double America’s clean energy production in solar, wind, and so much more,” Biden stated.
  • The Real Estate Roundtable on Nov. 16, 2021 supported the BBB Act’s climate measures in a letter to congressional tax writers. The letter also detailed five Roundtable recommendations aimed at improving certain green energy tax provisions affecting real estate. (Roundtable letter, Nov. 16)   

Key Senate Votes 

Sens. Sinema and Manchin

  • Key Sen. Joe Manchin (D-WV), right, chair of the Senate Energy and Natural Resources Committee, has signaled his support for climate measures in a revised BBB package. (Roundtable Weekly, Feb. 18)
  • Manchin on Wednesday responded to the State of the Union, saying he could support a smaller spending package that would split revenue between deficit reduction and new spending. Manchin said, “If you do that, the revenue producing [measures] would be taxes and [prescription] drugs. The spending is going to be climate.” (Politico, March 2 and E&E News, March 3)
  • However, another key vote in the 50-50 upper chamber – Sen. Kyrsten Sinema (D-AZ), left – has voiced opposition to raising taxes. (BGov, March 2)

As Congress continues to work on the current fiscal year budget, President Biden will release a non-binding budget for the 2023 fiscal year that will outline his administration’s major economic, tax and climate policy priorities. The Treasury Department will also release its “Greenbook,” which will detail proposed tax cuts and revenue raisers that could fund the White House’s budget initiatives.    

#  #  # 

The Roundtable and Business Continuity Coalition Call for Public-Private Pandemic Risk Insurance Backstop

Posted on by Trey Jackson

Rep. French Hill

Rep. French Hill (R-AR), above, – Ranking Member of the House Financial Services Subcommittee on Housing, Community Development and Insurance – led a Feb. 23 discussion on the widening gaps in pandemic-related coverage in commercial insurance markets with policyholders and insurance industry officials. 

Pandemic Risk Insurance Solution 

  • Additionally, members of the multi-industry Business Continuity Coalition (BCC), which includes The Real Estate Roundtable, on Feb. 23 urged policymakers to enact a public-private pandemic risk insurance backstop program. The BCC’s Feb. 23 statement emphasizes that such a program would protect the economy from future government-ordered shutdowns while enabling employers to keep payrolls and supply chains intact.  
  • The BCC is comprised of over 50 business organizations and companies representing approximately 70 million workers in the hospitality, retail, real estate, communications, broadcasting, nonprofit association, entertainment, restaurant, gaming and professional sports industries. (BCC statement, Feb. 23) 

Jeffrey DeBoer, Real Estate Roundtable President and CEO

  • Real Estate Roundtable President and CEO Jeffrey DeBoer, above, said, “Pandemic risk is one of the largest unhedged risk exposure in the U.S. economy today. It is important to have an economic mechanism in place to protect jobs and the economy from future government mandated shutdowns.”
  • DeBoer added, “The Real Estate Roundtable and its Business Continuity Coalition partners encourage policymakers to prepare the economy for future risks by enacting a program that provides the coverages that American businesses need.”
  • The BCC offered a detailed proposal last March to establish a federal pandemic insurance program, and endorsed the Pandemic Risk Insurance Act (H.R. 5823) last November, while policymakers continue to deliberate on how to design such a program. (Roundtable Weekly, Nov. 5, 2021) 

The coalition noted that the design of any pandemic risk insurance program should adhere to certain principles, which are outlined in the Feb. 23 statement. 

#  #  #