Tag: Roundtable Weekly

U.S. Labor Department Adopts “Joint Employer” Rule, Returns to “Direct and Immediate Control” Standard

Posted on by Trey Jackson

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The Labor Department on Jan. 12 released its final “joint employer” rule, returning to a standard where businesses can only be held responsible for workplace violations and collective bargaining obligations regarding workers over which they have “direct and immediate” control.  (Final Rule, Federal Register and Fact Sheet, Dept. of Labor).

  • This week’s rule takes effect on March 16.  It upholds a federal labor standard that was in effect for more than thirty years, before it was upended by a National Labor Relations Board (NLRB) decision in 2015. 
  • That 2015 NLRB decision instituted an expansive interpretation of workplace relationships, where employees hired by a local franchise operator (or subcontractor) could also be considered an employee of the “parent” company (or general contractor) that had no role in hiring decisions.  The new regulation revives the long-standing rule that two separate employers are considered “joint employers” only where they both have “direct and immediate control” over hiring standards, employment terms and working conditions. 

  • In practical terms, the Jan. 12 rule means that a local franchisee remains obligated to sit down and negotiate with unionized employees – but the remote franchisor company that never hired the workers has no collective bargaining responsibilities to them.  Similarly, a subcontractor that commits workplace safety violations is responsible to its laborers, but a general contractor is not similarly responsible unless it has “direct and immediate” control over job site conditions.

  • Advocacy over the joint employer rule has spanned the Obama and Trump Administrations.  For example, as part of a broad multi-industry coalition, The Roundtable wrote to congressional leaders back in 2017 about the harm to businesses caused by the NLRB’s Obama-era position, essentially advocating for the Labor Department’s rule handed down this week. (See past Roundtable Weekly stories – March 2, 2018 / Dec. 15, 2017 / Nov. 10, 2017 / Sept. 11, 2015)

  •  On Jan. 12, DOL Secretary Eugene Scalia and White House Chief of Staff Mick Mulvaney wrote in the Wall Street Journal about the new joint employer rule.

“The new rule also gives companies in traditional contracting and franchising relationships confidence that they can demand certain basic standards from suppliers or franchisees—like effective antiharassment policies and compliance with employment laws—without themselves being deemed the employer of the other company’s workers. That will help companies promote fair working conditions without facing unwarranted regulatory costs,” according to the two Trump Administration officials. (Wall Street Journal, Jan. 12)

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Treasury Issues Final Regulations Affecting National Security Concerns Over Foreign Investment, Including Real Estate Transactions

Posted on by Trey Jackson

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The Treasury Department on Jan. 13 issued two final regulations that increase the U.S. executive branch’s ability to address national security concerns arising from certain foreign investments, including real estate transactions.  (Treasury’s full text of the final regulations & related resources)

  • The new rules, which go into effect Feb. 13, will comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).  The Act authorizes the Committee on Foreign Investment in the United States (CFIUS) to review certain transactions involving foreign investment to determine potential effects on U.S. national security.
  • FIRRMA, enacted with bipartisan support in August 2018, established CFIUS’ jurisdiction over certain real estate transactions.  It also broadened CFIUS’ jurisdiction over certain non-controlling investments into certain U.S. businesses involved in critical technology, critical infrastructure, or sensitive personal data.
  • The new regulations were released in two parts: Provisions Pertaining to Certain Investments in the United States by Foreign Persons (31 C.F.R. part 800); and Provisions Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States (31 C.F.R. part 802).  (Skadden, Jan. 16 – “CFIUS’ Final Rules: Broader Reach, Narrow Exceptions and Foretelling Future Change“)
  • “These regulations strengthen our national security and modernize the investment review process,” said Treasury Secretary Steven T. Mnuchin. “They also maintain our nation’s open investment policy by encouraging investment in American businesses and workers, and by providing clarity and certainty regarding the types of transactions that are covered.”  (Treasury statement, Jan. 13)
  • The new rules create exemptions to CFIUS jurisdiction for so-called “excepted foreign states” that include nationals, entities, and governments of certain countries.  The current list of eligible foreign states includes Australia, Canada and the United Kingdom, but may expand to include other nations in the future.
  • The Real Estate Roundtable submitted comments to Treasury last year about the original, proposed CFIUS rules and requested clarifications about how investments in commercial real estate would be affected.  (Roundtable Weekly, Sept. 20, 2019 and Roundtable Letter, Oct. 17, 2019)
  • FIRRMA expands the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities.  Responding to concerns raised by The Roundtable and other industry groups, language is included in the rules that exempts real estate located in an ‘urbanized area’ from the criteria of a covered transaction.  The Census defines an urbanized area as one comprising more than 50,000 people.
  • The new rules include other modifications to the proposed rules affecting real estate transactions.  The final rules lower the threshold for investors to qualify as “excepted investors.”  A foreign person who now qualifies as an excepted investor will not be subject to CFIUS’ jurisdiction for non-controlling investments regarding real estate transactions.  (Law 360, Jan. 15)
  • A Ropes & Gray Jan. 15 summary – “CFIUS Issues Final Rules Implementing FIRRMA: Key Changes and Developments” – reports that an entity may be deemed an “excepted investor” if, among other requirements:
    • 75 percent or more of the members and 75 percent or more of the observers of the board of directors (or comparable body) are citizens of either the United States or an excepted foreign state – instead of the 100 percent requirement articulated in the Proposed Rules, and
    • All investors that hold a 10 percent or greater equity interest are citizens of either the United States or an excepted foreign state – instead of the 5 percent or greater requirement set forth in the Proposed Rules.

According to a Jan. 16 JD Supra report — “Key Takeaways from CFIUS Final Rules Implementing FIRRMA  — the final rules also broaden the covered real estate exception for retail trade, accommodation, and food service stores.  The new rules apply the exception to leases and concessions of real estate that are “used only for the purpose of engaging in the retail sale of consumer goods or services to the public.”

CFIUS also intends to make a web-based tool available in the near term to assist the public with assessing what qualify as “covered real estate transactions” that are potentially subject to CFIUS review.

With these final rules, investors and companies now face a more complicated CFIUS framework that accounts for evolving national security risks involving foreign investments and real estate transactions.   

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) and Homeland Security Task Force (HSTF) plan to study the 132-page rule (part 802) affecting foreign transactions in U.S. real estate for more insight into how the new rules may impact commercial real estate investment.

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Seven-Year TRIA Reauthorization Passed as Part of $1.4 Trillion Spending Bill

Posted on by Trey Jackson

A seven-year reauthorization of the Terrorism Risk Insurance Act (TRIA) was approved this week by the House and Senate as part of a year-end funding bill (H.R. 1865).  The provision reauthorizes TRIA through 2027, a year ahead of its slated sunset date of Dec. 31, 2020. (TRIA provisions on pages 1233–1236 of the year-end funding legislation). 

The measure is part of a massive $1.4 trillion congressional spending deal to fund the government until the end of the fiscal year – Sept. 20, 2020.  President Trump is expected to sign two separate funding bills to keep the government open past midnight tonight. 

Roundtable Chair Debra Cafaro (Ventas, Inc.) stated, “The Real Estate Roundtable is pleased that TRIA will be extended until 2027.  This federal terrorism insurance backstop was enacted following 9-11 and has been extended and reformed several times since. We cannot overstate the valuable safety and liquidity that the program brings to the US economy, businesses of all manner and commercial real estate markets.”

A long-term, “clean” reauthorization of TRIA, well in advance of its expiration, has been a top policy goal of The Roundtable.  This was achieved a full year ahead of schedule.  (Roundtable background on TRIA)

In addition to TRIA, the omnibus appropriations bill (H.R. 1865) contains several other positive measures affecting real estate.  The tax and funding extensions include: 

  • The EB-5 Regional Center Program, which provides visas to foreign nationals who pool their investments in regional centers to finance U.S. economic development projects.  The program would be extended until Sept. 2020.  Department of Homeland Security (DHS) regulations that took effect in November presently govern key elements of the EB-5 program regarding investment levels and Targeted Employment Area (TEA) definitions.   
  • The National Flood Insurance Program.  Without the extension, the program’s borrowing authority would have been reduced from $30.4 billion to $1 billion. The program would also be extended until Sept. 2020.   (BGov and CQ, Dec. 20)
  • Tax measures would be extended through the end of 2020.  They include (1) the section 179D tax deduction for energy efficient commercial building property; (2) the section 25C tax credit for energy efficient improvements to principal residences; (3) the section 45L tax credit for construction of new energy efficient homes; (4) the tax exclusion for home mortgage debt forgiveness; (5) the tax deduction for mortgage insurance premiums; and (6) the New Markets Tax Credit;
  • The Brand USA program would be extended through fiscal year 2027.  Brand USA promotes travel to the U.S. through a public-private partnership that is funded through private-sector donations and funds collected from foreign visitors to the U.S.

This week also saw the House pass legislation (H.R. 5377) that would temporarily raise and then eliminate for two years the $10,000 cap on state and local tax (SALT) deductions, which would be paid for by permanently raising the top individual tax rate to 39.6%.  This “messaging” bill is unlikely to be taken up in the GOP-controlled Senate and President Trump has also threatened to veto it.

After a flurry of year-end policymaking amid impeachment proceedings, both chambers of Congress recessed today and will return in early January.

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Roundtable President and CEO Jeffrey DeBoer Recognized Among “The Hill’s Top Lobbyists 2019”

Posted on by Trey Jackson

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The Washington, DC policy news publication The Hill on Dec. 12 released its annual Top Lobbyists list, whioh includes The Real Estate Roundtable’s President and CEO, Jeffrey DeBoer.

  • The list recognizes several Washington industry representatives for their 2019 advocacy efforts and recognizes “the people who wielded their clout and knowledge most effectively on behalf of their clients,” according to the publication.
  • The Hill  list also notes, “The ranks of Washington’s policy experts and influencers run deep, but these are the players who stand out for delivering results for their clients in the halls of Congress and the administration.”
  • The Roundtable’s DeBoer commented, “I am proud to work for an organization of industry leaders and with a staff of effective advocacy professionals who are all committed to a fact-based, non-partisan approach to economic growth policies – an approach that benefits the country, its communities and commercial real estate markets.  This recognition by The Hill is appreciated and is a compliment to all those who work with The Real Estate Roundtable.”
  • DeBoer was also quoted Dec. 12 in Bisnow on “5 Policy Issues That Could Affect Commercial Real Estate In 2020.”
  • During a whirlwind policy month in DC that saw the passage of a $1.4 trillion spending deal with many positive policies affecting CRE – and the United-States-Mexico-Canada Agreement – DeBoer participated in a discussion that addressed the USMCA and other national issues.
  • On the USMCA, DeBoer noted, “If you’re in the real estate business, you want the underlying economy to be as healthy as possible, and the lack of an agreement here had been a drag on overall economic activity in the country.”  He added. “This agreement will both be a direct benefit in terms of the trading of materials that are used to construct assets, but also an indirect benefit because the underlying economy and businesses that trade goods will benefit from this.”
  • DeBoer also addressed the issue of affordable housing and GSE reform in the upcoming year.  He stated, “We want to see a positive debate where people talk about the real problems of housing availability in America, which has to do with the permitting process, the ability to develop dense properties, the ability to use the Section 8 and the Low Income Housing Tax Credit programs, and maybe those things should be expanded.” DeBoer also said, “”GSE reform is not going to solve the housing problems, but it’s going to be an aspect of housing reform in the country along with a variety of other things that need to be done.”

These policy issues and others that will comprise The Roundtable’s 2020 National Policy Agenda will be discussed during the organization’s State of the Industry Meeting on Jan. 28-29 in Washington, DC.

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Bipartisan Senate Letter Urges Treasury to Withdraw IRS Notice Hindering Foreign Investment in U.S. Real Estate

Posted on by Trey Jackson

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This week, 11 Senators sent a bipartisan letter urging Treasury Secretary Steven Mnuchin to withdrawal section 2 of IRS Notice 2007-55, which applies U.S. capital gains tax to certain types of inbound real estate investment transactions that were previously treated as nontaxable under the Foreign Investment in Real Property Tax Act (FIRPTA).  (Roundtable background on FIRPTA)

  • Specifically, prior to the Notice, a domestically controlled REIT could sell its assets and liquidate, and the liquidation would be treated as a sale of stock (and a foreign investor in the REIT would not owe U.S. capital gains tax).  This “sale of stock” treatment is consistent with how corporate liquidations are regularly taxed.  The IRS Notice reversed the longstanding tax treatment of these transactions and took the position that a liquidating distribution of a domestically controlled REIT is a taxable sale of the underlying real estate assets.
  • The letter, led by Sens. Johnny Isakson (R-GA) and Robert Menendez (D-NJ), notes, “This unintended tax burden discourages foreign investors from putting capital to work to create jobs and improve our communities.”
  • The group of Senators, which includes Senate Banking Committee Chairman Mike Crapo (R-ID) and the Democratic co-chair of the Senate Real Estate Caucus, Senator Ben Cardin (D-MD), requests that Treasury restore Congress’s intended treatment of liquidating REIT distributions, encourage increased foreign investment in U.S. real estate, and further spur job creation in the United States by reversing the IRS Notice.  According to the Senators, “trillions of dollars in global capital are estimated to be available that could be invested in the U.S. real estate market.  Our tax policies should welcome such investment, not discourage it.” (Senators’ letter, Dec. 18)
  • In addition to Senators Isakson, Menendez, Crapo, and Cardin, the signatories included: Sen. Pat Roberts (R-KS), Sen. John Thune (R-SD), Sen. Debbie Stabenow (D-MI), Sen. Rob Portman (R-OH), Sen. Steve Daines (R-MT), Sen. Tom Carper (D-DE), and Sen. Tim Scott (R-SC).  All eleven signatories are members of the Senate Finance Committee.  A similar letter was sent in October 2017 by 32 Members of the House Ways and Means Committee.
  • The Roundtable’s Tax Policy Advisory Committee (TPAC) Chairman Frank Creamer Jr. (FGC Advisors, L.L.C.), said, “The efforts of Senators Isakson, Menendez and the nine other signatories demonstrates the strong, bipartisan support for reducing the burden of FIRPTA on real estate jobs and investment.”  Creamer added, “FIRPTA is an outdated law that imposes a discriminatory capital gains tax on foreign investors in U.S. real estate and infrastructure.  It does not apply to any other asset class.  Outside of complete FIRPTA repeal, Treasury could take a meaningful regulatory step and repeal IRS Notice 2007-55.”
  • In April 2019, Representatives John Larson (D-CT) and Kenny Marchant (R-TX) introduced the Invest in America Act (H.R. 2210), a bill to repeal FIRPTA altogether.  The Roundtable and 19 national trade organizations – representing every aspect of constructing, developing, financing, owning, and managing real estate and infrastructure in the United States – wrote to Ways and Means Committee Members and other key House lawmakers urging them to support the legislation. (Comment Letter, March 28).

President Trump in early 2017 directed the Treasury Department to review existing tax regulations to identify rules that are unnecessarily burdensome.  Repeal of IRS Notice 2007-55 would represent another significant step toward reforming FIRPTA by reducing a tax regulatory burden.

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Congress Reaches Spending Deal to Avert Shutdown; Roundtable and Business Coalition Urge Year-End TRIA Reauthorization

Posted on by Trey Jackson

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A bipartisan spending deal to fund the government before a Dec. 20 deadline has been agreed to in principle, with details and a vote expected next week, according to top congressional lawmakers.  During the year-end policy rush to attach other legislation to the must-pass spending bill, The Roundtable and a diverse business coalition on Dec. 11 urged Congress to extend the Terrorism Risk Insurance Act (TRIA) for 7 years by passing S. 2877.

  • After rounds of funding negotiations between leaders of Senate and House appropriators this week, House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin, House Appropriations Chairwoman Nita Lowey (D-NY) on Thursday reported, “There’s a meeting of the minds.”  (Wall Street Journal, Dec. 12 and The Hill)
  • “Let me say in no uncertain terms, nobody wants to have a government shutdown,” said Sec. Mnuchin.  (Bloomberg Tax, Dec. 12)
  • Funding for the National Flood Insurance and EB-5 investor programs are currently operating under a four-week spending bill signed by President Trump on Nov. 21.  If a new round of funding is not agreed to by policymakers, the programs will shutdown on Dec. 21. (Roundtable Weekly, Nov. 22)
  • The spending agreement would avert a shutdown by spreading nearly $1.4 trillion in discretionary government spending over a dozen appropriations bills for FY2020, which ends Sept. 30, 2020.  The specific bills are likely to be unveiled Monday. (BGov, Dec. 13)
  • The contentious issue of funding for border wall along the Mexican border, which led to a 35-day government shutdown last year, is reportedly part of an agreement on immigration issues. The spending deal would provide the same funding for the border wall that Congress offered for fiscal year 2019 – $1.375 billion, instead of $5 billion requested by the White House.  (Roll Call, Dec. 12)
  • A flurry of policy developments this week may result in lawmakers agreeing to the massive funding bill, a U.S.-Mexico-Canada trade agreement and a Phase One Deal with China.

As lawmakers work to assemble the final spending package to pass by Dec. 20, several other measures – including a seven-year TRIA reauthorization and tax extenders – may compete for inclusion in the final “omnibus” bill.

Roundtable Urging TRIA Reauthorization

On Dec. 11, The Roundtable and a  diverse business coalition sent a letter to all members of the Senate urging action on the Terrorism Risk Insurance Program Reauthorization Act of 2019 (S. 2877) as soon as possible.  The Senate bill would extend TRIA for seven years, “allowing the program to continue providing vital economic protections against acts of terrorism that companies throughout the nation rely on,” according to the letter. 

  • The letter also notes, “Since its initial enactment in 2002, TRIA has served as a vital public-private risk sharing mechanism, ensuring that private terrorism risk insurance coverage remains available to commercial businesses, educational institutions and non-profit organizations at virtually no cost to the taxpayer.”
  • A seven-year TRIA reauthorization passed the House on Nov. 18 (H.R. 4634) as the Senate Banking Committee advanced a similar bill (S. 2877) on Nov. 20.  (Roundtable Weekly, Nov. 22)
  • Last week, The Roundtable and its partners in the Coalition to Insure Against Terrorism (CIAT) urged Senators to include the TRIA reauthorization in a possible year-end spending package.  (CIAT Letter, Dec. 2)
  • Roundtable President and CEO Jeffrey DeBoer commented on the importance of TRIA in a Dec. 12 Bisnow article on “5 Policy Issues That Could Affect Commercial Real Estate In 2020.”
  • “The reason it’s important is you want your assets, the property and potential damage to be covered by insurance, but you also want the people in your building to be covered by insurance if, God forbid, something happened,” DeBoer said. “If you don’t have all risk coverage on your asset, typically it’s very difficult to get financing for that asset from a bank or pension fund.”
  • “We’re optimistic we can get it done before the end of 2019,” he said. “If that does not happen, our top priority in 2020 will be to extend TRIA and maintain that Act.”  (Bisnow, Dec. 12)

House Majority Leader Steny Hoyer (D-MD) said yesterday that a final omnibus containing the spending bill and other measures may be grouped into two packages and voted on Tuesday.  Congress is expected to adjourn for the holiday recess by Dec. 20.  (The Hill, Dec. 12) 

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IRS Delays and Modifies Several New Partnership Tax Reporting Requirements

Posted on by Trey Jackson

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Responding to concerns raised by The Real Estate Roundtable and others, the Internal Revenue Service (IRS) on Dec. 9 issued Notice 2019-66 modifying and postponing several proposed changes to partnership tax reporting requirements.  (Bloomberg Tax, Dec. 9)

The Real Estate Roundtable on Nov. 18 sent a letter to Treasury and the IRS urging the government to postpone certain reporting requirements in the new partnership tax return forms for 2019.  The letter encouraged the IRS to seek formal input from stakeholders regarding specific items.  The Roundtable noted in the letter that the reporting requirements as originally proposed were generating significant taxpayer uncertainty; could lead taxpayers to adopt inconsistent approaches to computing information; and may result in more harm than good.  (Roundtable letter, Nov. 18)

Twelve other national real estate organizations sent a joint letter on Nov. 22 seeking a delay in the requirements and requesting a comprehensive comment process

This week’s IRS Notice makes the following changes:

  • The requirement to report partners’ shares of partnership capital on the tax basis method is delayed until 2020 (for 2019, capital accounts will be reported consistent with the reporting requirements in 2018);
  • The requirement for partnerships to report to partners information about separate “Section 465 at-risk activities” is delayed until 2020;
  • The Notice clarifies the requirement for partnerships and other persons to report a partner’s share of “net unrecognized Section 704(c) gain or loss” by defining this term for purposes of the reporting requirement.
  • It exempts publicly traded partnerships from the requirement to report their partners’ shares of net unrecognized Section 704(c) gain or loss; and
  • It also provides relief from certain reporting penalties imposed under the tax code for taxpayer who follow the Notice.  These penalties include the failure to furnish correct payee statements; the failure to file a partnership return that shows required information; and the failure to furnish information required on a Schedule K-1.

Significant changes were made to the partnership audit rules in 2015, in response to widespread government concerns related to the challenges of administering partnership tax rules. The Roundtable and members of its Tax Policy Advisory Committee (TPAC) have actively contributed to the development and modification of partnership audit reform legislation.  (Roundtable Weekly, Jan. 5, 2018 and October 11, 2019)

TPAC will continue to engage IRS and Treasury officials about timely stakeholder concerns with regulatory issues affecting real estate and the economy.

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Roundtable Submits Comments to House Climate Crisis Committee; House Democrats Unveil Green Energy Tax Draft

Posted on by Trey Jackson

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The Roundtable submitted energy and climate policy recommendations to the House Select Committee on the Climate Crisis on Thursday, while members of the House Ways and Means Committee unveiled a draft legislative package of more than 20 energy tax incentives – including incentives to promote commercial and residential building energy efficiency.  

The Roundtable’s climate letter submitted Nov. 21 responds to a request for information from the Select Committee. This panel has no authority to write legislation but is authorized to study climate change and issue legislative policy recommendations (expected by March 31, 2020).

In its study and review of climate policy recommendations, the Select Committee has held a series of hearings featuring various stakeholders – including one focused on “Cleaner, Stronger Buildings.”  (Roundtable Weekly, October 25, 2019) .

The Roundtable’s comments to the Select Committee highlighted the priorities advocated by its Sustainability Policy Advisory Committee (SPAC) to:       

  • Improve the model building energy codes process by enacting the Portman-Shaheen Energy Savings and Industrial Competitiveness (ESIC) Act. (Roundtable Weekly, September 27, 2019)
     
  • Enhance EPA’s voluntary ENERGY STAR incentive programs for both commercial buildings and tenants.
  • Improve the quality and reliability of the national data collected by the federal Commercial Building Energy Consumption Survey.
  • Create meaningful accelerated depreciation periods to encourage investments in high performance equipment to retrofit existing commercial and multifamily buildings. (Roundtable Weekly, May 10, 2019)
  • Foster public-private partnerships to finance safety and resiliency improvements to the electricity grid, the natural gas pipeline network, and other energy infrastructure assets.

Meanwhile, a discussion draft of the Growing Renewable Energy and Efficiency Now (GREEN) Act was released Nov. 19 by the chairman of the House Ways and Means Subcommittee on Select Revenue Measures – Rep. Mike Thompson (D-CA). 

The GREEN Act would extend and revise a number of expired tax incentives, including provisions aimed at encouraging taxpayers to improve the energy efficiency of homes and commercial buildings. Specifically, the discussion draft includes:

  • An updated and enhanced deduction for capital expenditures on energy-efficient commercial building property (section 179D)
  • An expanded tax credit for the developers of new, energy-efficient homes (section 45L)
  • A modified tax credit for energy-efficient improvements to existing homes (section 25C)

Under the bill, the revised tax incentives would be available through 2024. Following release of the draft legislation, House Ways and Means Committee Chairman Richie Neal (D-MA) stated, “The climate crisis requires bold action, and I’m pleased that we’re using the legislative tools at Ways and Means’ disposal to create green jobs, reduce carbon emissions, and help heal our planet.” We look forward to hearing from stakeholders to ensure this bill is effective in helping improve energy efficiency and eliminating carbon emissions.”

Prospects for passing the GREEN Act are unclear as it is a Democratic initiative that currently lacks Republican support. 

Additionally, The Roundtable and coalition partners continue to lay the research and data foundation for a new tax incentive that would provide accelerated depreciation for high performance, HVAC, lighting, windows, and other equipment to retrofit existing commercial and multifamily buildings, known as “E-QUIP.” (See Roundtable Weekly, May 10, 2019).  The coalition’s objective is for bipartisan introduction of an E-QUIP bill in early 2020.

The Roundtable’s Tax Policy Advisory Committee (TPAC) plans to analyze the proposed measures and respond to any eventual energy tax legislation that may be introduced in the New Year.

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ULI Releases “Emerging Trends in Real Estate 2020”; Podcast Features Roundtable’s DeBoer on Industry Issues

Posted on by Trey Jackson

The publication Emerging Trends in Real Estate 2020, released by the Urban Land Institute (ULI) and PwC, reports that U.S. real estate remains a favored asset class, as economic uncertainty and societal changes have resulted in successful industry adaptations to space design, development and business operations.   

 

  • “Throughout this period of extended economic growth, real estate development has been dominated by creative mixed-use projects that have revived many urban areas,” said ULI Global Chairman W. Edward Walter. “Going forward, those who continue to innovate with spaces that can be easily be repurposed as cities evolve will have a competitive edge.  Staying ahead of change means being flexible and adaptable.” (ULI news release, Sept. 19)
  • Trends highlighted in the report include: 
    • ESG – There is a growing commitment to the tenets of ESG (environmental, social and governance) principles among corporations in general and real estate in particular. Sustainability evaluation is becoming a checklist item for institutional investors domestically and worldwide. Strong interest by millennials in environmentally and socially conscious business practices is a major factor driving this trend.
    • Infrastructure – Real estate professionals waiting for a federal solution to America’s infrastructure needs are looking to states and localities that are committed to improved infrastructure as a foundation for economic growth.
    • Housing Affordability has reached a crucial point, even in markets that previously boasted of low-cost housing.  There is a rise in co-living arrangements, among older as well as younger generations.
    • Hipsturbia – The live-work-play districts that spurred 24-hour downtowns in the 1990s has spread to many suburban communities, which are seeking to become hip destinations, or “hipsturbs.”  The key to success: transit access, walkability, and abundant retail, restaurant and recreation options.
    • Technology – Property managers are turning to technology solutions for productivity enhancements and improved operational efficiency.  Demand is also increasing from occupants and capital sources for technological sophistication across all sectors.
  • The report also notes that the industrial/distribution sector continues to be ranked highest for investment and development prospects, reflecting the impact of e-commerce and rising demand for storage and delivery facilities.  Multifamily and single-family housing are also highly favored, as housing needs continue to change for millennials and baby boomers. 
  • Societal trends and public policy issues affecting commercial real estate are also featured in an Oct. 1 interview with Roundtable President and CEO Jeffrey DeBoer (left in photo above)  during an episode of the podcast, “Through The Noise.”  
  • In a wide-ranging, 50-minute interview, DeBoer explains The Roundtable’s role in industry efforts in Washington, including terrorism insurance, affordable housing needs, energy efficiency and opportunity zones. 
  • DeBoer states in the podcast, ““Whether rural or urban; multifamily or office … we’re working together as an industry and talking about how development projects contribute to jobs and local communities.  Commercial real estate provides 70% of local budgets to pay teachers and build roads. Healthy, strong real estate is good for everyone and helps every part of our society.”

Public policies affecting CRE will be discussed during The Roundtable’s Fall Meeting on Oct. 30 in Washington, where guests will include U.S. Housing and Urban Development (HUD) Secretary Ben Carson.

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