As our nation marks the 25th anniversary of the September 11 attacks, The Real Estate Roundtable remembers the nearly 3,000 lives lost, the families and communities forever changed, and the first responders, public servants, and countless Americans who responded with extraordinary courage and selflessness. We will never forget.

The Department of Energy (DOE) and Environmental Protection Agency (EPA) released a detailed plan outlining how DOE will assume leadership and core operations of the federal ENERGY STAR program. The transition is expected to be completed by July 2027, with continued congressional oversight. (ENERGY STAR Transition Plan, Aug. 28)

ENERGY STAR Transition

• The plan details the steps DOE will take to assume ownership of the ENERGY STAR trademark, lead the program, and oversee its core operations. (Utility Dive, Sept. 4)

• DOE is expected to host ENERGY STAR’s information technology portfolio—including Portfolio Manager and related datasets—once the transition is complete by July 2027. (Government Market News, Sept. 7)

• The plan also calls for ENERGY STAR appropriations to be transferred from EPA to DOE as needed to financially support the program.

• Congress provided approximately $33 million for ENERGY STAR through EPA in the FY 2026 appropriations law, preserving the program’s funding through Sept. 30.

• The transition plan calls for DOE to leverage the expertise of existing EPA staff and contractors while recruiting personnel to support ENERGY STAR’s essential functions. (ENERGY STAR Transition Plan, Aug. 28)

ENERGY STAR by the Numbers

• More than 2,100 non-data center buildings have earned ENERGY STAR certification so far in 2026.

• Since 2025, 240 buildings have earned ENERGY STAR NextGen certification, according to the program’s national buildings registry.

• ENERGY STAR has helped families and businesses save more than $500 billion in energy costs since 1992.

Roundtable View

• The transition plan aligns with RER’s policy priority to maintain and evolve ENERGY STAR as a voluntary federal program and continue building the industry’s relationship with DOE’s implementation team.

• “It has been a privilege for RER to be involved in the discussions around transition of ENERGY STAR from the EPA to the DOE. RER has productively partnered with the Agency and the Department on a number of issues, and we are fortunate that ENERGY STAR, a critical program for our industry, has found a logical home to provide us with a credible, voluntary, global framework to measure building performance, reduce wasted energy, and improve profitability,” said RER Sustainability Policy Advisory Committee Chair Anthony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.).

• Malkin continued, “ENERGY STAR’s continued success depends on the expertise and reliable data available that is fully housed at the DOE.  ENERGY STAR’s Portfolio Manager is a unique tool that provides our industry with the most widely used software to measure and quantify building performance. The DOE’s stewardship will allow ENERGY STAR to evolve alongside the market and continue to provide owners, tenants, and investors with its immensely valuable objective metrics.”

• Following the announcement of the Memorandum of Agreement in March, RER joined a broad coalition representing the consumer products, manufacturing, real estate, and retail sectors earlier this year in support of DOE’s new leadership role. (Letter, March 30 | RER News Release, March 31 | Memorandum of Agreement, March 3)

• “This plan provides a clear roadmap for DOE to assume responsibility for ENERGY STAR while maintaining Congress’s oversight of the program,” said RER President and CEO Jeffrey DeBoer. “RER will continue working with DOE, the House and the Senate to support adequate funding, retain essential expertise, and ensure a smooth transition that strengthens America’s energy and global economic competitiveness.”

RER and its coalition partners will continue working with DOE, Congress, and other stakeholders to support the program and help ensure a smooth transition

Energy issues are front and center in Washington, D.C., and the states in the weeks leading up to the midterm elections. Rising electricity costs, rapid data center development, and evolving AI technologies are fueling debates over grid reliability, infrastructure investment, tax policy, and job impacts.

State of Play

• The House is expected to vote next week on the bipartisan Ratepayer Protection Act, which would require technology companies to cover energy infrastructure costs associated with their data centers rather than pass them on to consumers. (Axios | Politico, Sept. 10)

• The North American Electric Reliability Corporation (NERC) is developing reliability standards for large “computational loads,” including data centers and cryptocurrency facilities. (NERC Project 2026-02)

• The proposed standards address data-center interconnections, grid-impact studies and modeling, information sharing and records of disturbances such as sudden load losses or voltage drops. (Roundtable Weekly, July 17 | 24 | Aug. 7)

• RER is working with members and coalition partners on comments addressing NERC’s proposed Definitions, Registration Criteria, and Reliability Standards ahead of the Sept. 18 comment deadline. (E&E News, July 17)

Why It Matters

• As federal policies evolve, regulators must distinguish between data-center ownership and operations. Requirements should track which parties control facility operations, possess relevant data, and are responsible for managing grid impacts due to intensive “computational loads” from activities like cloud computing, AI modeling, and crypto mining.

• NERC’s imminent data center owner and operator rules should also respect leasing arrangements at these facilities. Hyperscalers and other AI tenants in leased spaces should have affirmative obligations to share relevant data, such as their electricity usage and water consumption, with facility owners that may have reporting obligations.

Data Center Tax Proposals

• Senate Finance Committee Ranking Member Ron Wyden (D-OR) recently released a framework that restricts Opportunity Zone (OZ) investments and bonus depreciation for new data centers, changes the treatment of certain data-center rents under the REIT rules, and establishes a federal excise tax on operators’ gross receipts. (Senate Finance Committee, Aug. 6 | Roundtable Weekly, Aug. 7 | GlobeSt. Sept. 8)

• A recent Bipartisan Policy Center analysis outlined significant questions surrounding proposals to tax AI, including which activities should be taxed, who would ultimately bear the cost, and whether new taxes could discourage investment or innovation. (Bipartisan Policy Center, Aug. 24)

• A separate Cato Institute analysis warned that an excise tax based on revenue rather than profits could impose especially high effective tax rates on lower-margin data-center operators and discourage new development. (Cato Institute, Sept. 3)

• RER Advocacy: RER’s Tax Policy Advisory Committee is preparing comments on the Wyden framework. Maintaining the owner-operator distinction is critical to preventing provisions aimed at hyperscalers from penalizing real estate owners that do not control facility operations.

Data Centers & CRE By the Numbers

• A new National Association of Realtors report found that 50% of surveyed agents with a data center in their market reported higher nearby commercial property values, while 42% cited increased demand for commercial space. Industrial properties saw the strongest gains in interest at 58%. (CoStar | Housing Wire, Sept. 9)

• Recent reports from JLL and CBRE found that North American data-center demand reached record levels in the first half of 2026, doubling from the previous year and increasing fivefold from the same period in 2024. (BisNow, Sept. 3)

California Building Performance Standards (BPS)

• On Aug. 18, RER submitted comments to the California Energy Commission on its strategy for developing future statewide building performance standards. (RER Letter, Aug. 18)

• The comments provide a national perspective on BPS policies and draw from RER’s peer-reviewed 20-Point Guide for Fair and Reasonable Building Performance Standards Laws.

• RER also coordinated with the California Business Properties Association and California Building Industry Association to align its recommendations with a broader coalition letter joined by AHLA, BOMA International, CREDA, ICSC and Nareit. (Coalition Letter, Aug. 18)

• In July, RER also submitted comments urging the Department of Energy (DOE) to modernize its methodology for determining whether building energy codes are cost-effective.  (RER Letter | Roundtable Weekly, July 31)

What’s Next

RER will continue working with policymakers and industry partners to advance reliable and affordable energy supplies, efficient buildings, and clear rules that recognize the distinct responsibilities of data-center owners and operators.

As Congress returns to Washington, The Real Estate Roundtable (RER) is working to advance several tax policy initiatives aimed at expanding housing supply, revitalizing communities, and removing barriers to capital formation for real estate investment.

Tax Policies to Support Community Revitalization

• On August 30, RER’s Tax Policy Advisory Committee (TPAC) Chairman Joshua Parker published an op-ed in The Hill newspaper setting forth a three-part framework for how lawmakers should think about potential tax policies to support community revitalization. (The Hill, Aug. 30)

• “Preserve buildings that can serve again,” wrote Parker. “Convert those that can meet a new need. Clear those that cannot and require the land to be rebuilt.”

• Parker’s op-ed outlines three actionable tax changes advocated by RER to advance this framework: (1) reforming the tax treatment of demolition costs, including the lost tax basis when a building is torn down; (2) strengthening the historic tax credit, and (3) incentivizing commercial-to-residential conversions through the bipartisan Revitalizing Downtowns and Main Streets Act (H.R. 2410).

Opportunity Zones

• RER is continuing to encourage Treasury and the IRS to move forward with transitional tax guidance that will provide much-needed clarity to Opportunity Zone (OZ) investors pursuing new housing and other real estate projects that straddle the pre- and post-2025 OZ statutory regimes.

• IRS Notice 2026-40, released in June, embraced several RER recommendations and clarified certain key issues for taxpayers with OZ projects in expiring census tracts. (Roundtable Weekly, June 26)

• RER followed up the Notice with additional suggestions, and met virtually with Treasury and IRS staff, along with other stakeholders, on Aug. 27. Formal proposed regulations from Treasury are expected before the end of the year. (Letter, July 29 | Roundtable Weekly, July 31)

• This week, Treasury and the IRS issued proposed regulations implementing new reporting requirements for Qualified Opportunity Funds and Qualified Opportunity Zone Businesses. (PoliticoPro, Sept. 10)

FIRPTA and Tax Barriers to Foreign Investment in US Real Estate

• RER is finalizing a request to Treasury to revoke outdated administrative guidance (IRS Notice 2007-55) that creates unnecessary hurdles and tax burdens for foreign investors seeking to deploy capital in US real estate.

• Notice 2007-55 treats REIT liquidating distributions as a sale of real property rather than the sale of stock, thus subjecting the transactions to tax under FIRPTA. The Notice also treats REIT distributions as ineligible for the section 892 foreign government tax exemption.

• RER believes the Notice’s conclusions were incorrect at the time, and more recent events strongly favor its repeal.

• These include changes in the FIRPTA statute since the Notice was issued, growth in the importance of foreign capital to U.S. real estate jobs and investment, and the corrosive effect of 20 year-old sub-regulatory guidance that has never been subject to the formal rulemaking process.

SECA Limited Partner Exception

• On Aug. 12, the Fifth Circuit withdrew its January opinion in Sirius Solutions and issued a substitute opinion holding that the self-employment tax exception applies to a limited partner who plays “no significant role in managing or running a business.” (JD Supra, Sept. 9)

• The new standard is a step back from the court’s earlier ruling, which based eligibility on limited liability and state-law limited partner status. However, the court again rejected the Tax Court’s stricter “passive investor” test and remanded the case for further consideration. (Grant Thornton, Aug. 17)

• RER has filed amicus briefs supporting taxpayers in Sirius and two related appeals—Denham Capital in the First Circuit and Soroban Capital Partners in the Second Circuit. (Roundtable Weekly, Jan. 30 | Feb. 13)

RER will continue engaging with Congress, Treasury, and the IRS to advocate for clear, effective tax rules that expand access to capital, encourage investment and redevelopment, and support long-term economic growth.