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Commercial real estate industry leaders continue to acknowledge positive conditions in the economy and current real estate markets, while expressing some caution about 2019, according to The Real Estate Roundtable’s Q1 2018 Economic Sentiment Index released yesterday.

During a week of thousand-point gyrations in the stock market and last-minute congressional votes to keep the government open, President Trump this morning signed a budget deal into law that ended a nine-hour government shutdown.

The House of Representatives on Wednesday passed legislation (H.R. 620) to reform the American With Disabilities Act (ADA) to curb unscrupulous lawsuits alleging minor and easily correctable impediments to building access.

Lawmakers struggling over policy and program disagreements related to a $1.2 trillion “omnibus” spending bill have pushed a congressional vote to next week – closer to March 23, when current funding expires.

The Senate on Wednesday passed (67-31) bipartisan Dodd-Frank reform legislation (S. 2155) that includes a Roundtable-supported measure to reform the Basel III High Volatility Commercial Real Estate (HVCRE) Rule, which would clarify specific requirements for acquisition, development, or construction (ADC) loans.

In the Federal Reserve's first major decision under new Chairman Jerome Powell, the central bank on Wednesday raised the federal funds rate 25 basis points (to a range of 1.5 percent to 1.75 percent) and boosted its U.S. economic growth forecast for 2018 and 2019.

In a week of intense budget negotiations, a $1.3 trillion dollar “omnibus” spending bill (H.R. 1625) to fund the government through September 30 was introduced Wednesday night to avoid a government shutdown today. The 2,232-page measure passed both the House and Senate by comfortable margins, and President Trump signed it this afternoon.

Legislation introduced May 21 by Sen. Thom Tillis (R-N.C.) would delay implementation of the Current Expected Credit Losses (CECL) accounting standard, which will force banks to book losses on bad loans much faster. (ABA Journal, May 22) The independent Financial Accounting Standards Board (FASB) is proceeding with its plan to implement CECL for publicly traded U.S. banks at the beginning of 2020 – and later for other financial institutions. (Roundtable Weekly, April 5)

A Senate Banking Committee hearing this week on "Combating Illicit Financing by Anonymous Shell Companies Through the Collection of Beneficial Ownership Information" followed recent approval of legislation by the House Financial Services Committee that would affect beneficial ownership requirements for commercial real estate transactions. Senate Banking Chairman Mike Crapo (R-ID) said in his opening statement that the committee seeks solutions "… to deter money laundering and the financing of terrorism through the use of front companies, shell companies, shelf companies, opaque nominees, and other means to conceal and disguise the true beneficial owners of property and other assets."

Senate Finance Committee Ranking Member Ron Wyden (D-OR) yesterday introduced legislation to fundamentally alter the longstanding tax treatment of a profits interest in a real estate partnership. The Wyden proposal (detailed summary of the legislation and one-pager) would depart dramatically from prior carried interest legislation by taxing partners before any capital gain or even rental income is generated by the partnership. For example, it would give rise to large amounts of taxable (but phantom) income for a general partner with a profits interest during the pre-construction and development phase of a real estate project.

New York’s highest court issued a significant decision on March 27 regarding the governance, operation and dissolution of businesses structured as general partnerships; the value of “goodwill” that can inure to real estate assets; and the discounts that apply when valuing the stake of an investor with only a minority position in an enterprise.

House and Senate GOP leaders signaled this week they intend to pursue legislation that would make permanent the individual tax provisions enacted as part of the Tax Cuts and Jobs Act (P.L. 115-97) enacted last December.

Legislative language that could affect the allowable heights of buildings near airports passed the House today (393-13) as part of a bill ( H.R. 4 ) extending authorization of the Federal Aviation Administration (FAA) for five years.

House Financial Services Committee Chairwoman Maxine Waters (D-CA) released draft legislation calling for major investment in public and affordable housing before an April 30 hearing on "Assessing the Infrastructure Needs of America's Housing Stock."

A broad coalition representing rural and urban stakeholder groups submitted principles today to the Senate and House Judiciary committees on strengthening and reforming the EB-5 investment visa program, which is scheduled to expire on September 30, 2019.

U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) yesterday announced the formation of several bipartisan taskforces to examine and help permanently resolve the fate of 42 expired and expiring tax provisions.

Commercial real estate executives expressed increased optimism about real estate markets and overall economic conditions, according to this week's Real Estate Roundtable 2019 Q2 Sentiment Index.

The Roundtable's Q2 2018 Economic Sentiment Index released yesterday shows that as plentiful financing and equity continue to drive commercial real estate investment activity, industry leaders continue to see balanced market fundamentals, despite rising costs of construction and an uncertain outlook for markets in 2019.

As landmark tax reform enacted last December begins to reverberate through the economy, economists, Congress and industry experts are starting to assess its impact on economic investment and commercial real estate.

A Tax Foundation report released this week urges policymaker to correct a technical drafting error regarding cost recovery for qualified improvement property (QIP) that was included in the tax overhaul legislation enacted last year. The unintentional drafting mistake has resulted in a longer cost recovery period for qualified nonresidential interior improvements – a category that previously covered leasehold improvements, retail improvements, and new restaurant construction.