News Type: Roundtable Weekly

Roundtable Proposes Revenue Procedure to Address Opportunity Zone Transition

Posted on by abigail_grenadier

The Real Estate Roundtable (RER) on March 6 submitted proposed guidance to the U.S. Department of the Treasury and urged adoption of safe harbor rules to support continued investment in Opportunity Zones as the original OZ census tract designations phase out under the One Big Beautiful Bill Act (OBBBA). (Letter, Revenue Procedure, March 6)

Why It Matters

  • OZ incentives have helped drive private investment, job creation, and redevelopment in underserved communities since the enactment of the Tax Cuts and Jobs Act of 2017.
  • The approaching expiration of the original OZ designations creates uncertainty for long-term investments and development projects already in progress.
  • For example, it is unclear how opportunity funds and OZ businesses can continue satisfying location-based statutory and regulatory compliance tests after an original tract designation expires.
  • The uncertainty is having a chilling effect on OZ investment, discouraging new housing development and other productive real estate activity from moving forward.
  • RER’s proposal responds to a structural gap in current guidance and offers specific language that Treasury and the IRS could use to establish a safe harbor for qualifying investments, including guardrails to prevent abusive transactions while protecting capital formation. (Letter, Revenue Procedure, March 6)
  • Transitional administrative guidance would support continued housing construction, economic growth, and community revitalization as the program shifts to the permanent framework enacted under OBBBA.

RER Recommendations

  • To resolve this issue, the draft Revenue Procedure would establish a safe harbor under which an expired tract would be treated as a “Grandfathered QOZ” for specified compliance purposes unless a disqualifying event occurs.
  • Qualifying funds and businesses could continue meeting statutory requirements if projects began or satisfied written planning and capital deployment standards before expiration.
  • A clearly defined safe harbor would unlock frozen capital and, combined with the beneficial OZ reforms enacted in OBBBA, support construction of new and affordable housing and long-term economic development in disadvantaged communities.

RER Advocacy

  • In December 2025, RER separately urged Treasury and the IRS to provide expedited guidance warning that unresolved tax treatment questions could significantly reduce OZ investment and capital formation in 2026. (Roundtable Weekly, Dec. 19)
  • The Dec. 2025 letter emphasized that uncertainty surrounding expiring census tract designations could delay projects, discourage new fund formation, and undermine housing production and community development efforts. (Letter, Dec. 19)

The proposed guidance was developed by the RER’s Opportunity Zone Working Group. Principal drafters included KPMG’s Orla O’Connor and Michael McMahon, Deloitte’s Gary Hecimovich and Adam Wallwork, and Greenberg Traurig’s Sandy Presant. RER will continue encouraging Treasury and the IRS to issue timely guidance that sustains Opportunity Zone investment and keeps housing and economic development projects on track in underserved communities.

Senate Housing Package Advances as Investor Ban Draws Opposition

Posted on by abigail_grenadier

The Senate this week moved forward with the 21st Century ROAD to Housing Act. This sweeping bipartisan package combines House and Senate housing provisions with the Trump administration’s push to restrict large institutional investors from buying single-family homes. (BisNow, March 3 | March 6 | RER Statement, March 4)

State of Play

  • The measure cleared an initial procedural vote, 84-6, after Senate Banking Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) released updated legislative text. A second vote on Wednesday, 90-8, moved the package closer to final action.  (Politico, March 2)
  • The latest Senate text largely preserves the prior ROAD to Housing framework, while adding a new provision to limit additional single-family home purchases by large institutional investors. The bill defines a large institutional investor as a company that owns 350 or more homes and incorporates exemptions, including for build-to-rent housing.
  • The White House said President Trump’s advisers would recommend signing it in its current form. (BisNow, March 3)
  • The broader package also encompasses provisions to streamline reviews for projects, raise FHA multifamily loan limits, support manufactured housing, and encourage additional housing development in Opportunity Zones. (BisNow, March 3)
  • Several senators had not reviewed the updated legislative text before Monday’s vote because it was released shortly beforehand. (Politico, March 2)

Congressional Opposition

  • Sen. Thom Tillis (R-NC) said he was not supportive of the investor provision if it mirrors the administration’s earlier crackdown, warning it would move policymakers “further away from producing affordable housing.”
  • Today, House Financial Services Committee Chair French Hill (R-AR) warned that his chamber is not prepared to support the 21st Century ROAD to Housing Act. “There are members in the House whose provisions and views were not accounted for in the current iteration of the 21st Century ROAD to Housing Act,” Hill said. (Punchbowl News Vault, March 6)
  • Hill is “optimistic” that those concerns can be addressed. Absent that, Hill said “further negotiations, including a possible conference, may be needed.” (Punchbowl News Vault, March 6)

What the Research Shows

  • Analysis has reinforced the concern that restricting institutional capital may do little to improve affordability while creating new supply problems.
  • The Real Estate Roundtable (RER) has consistently emphasized that expanding housing supply is the most effective path to improving affordability, as research shows affordability pressures are driven primarily by supply shortages, construction costs, and mortgage rates—not institutional ownership levels. (Roundtable Weekly, Jan. 9 | Jan. 16)
  • A recent Brookings analysis concluded that banning large institutional purchases of single-family rentals would yield only a very small increase in homes available for purchase, while leading to higher rents for families who need or prefer renting. (Brookings Institute, Feb. 23)
  • The same analysis warned that unexpected limits on investor activity could reduce future capital commitments to the sector and weaken property rights in ways that discourage new supply. (Brookings Institute, Feb. 23)
  • A Cato Institute analysis similarly argued that the proposed Section 901 provision in the bill would give the Treasury Department broad discretion to distinguish among favored and disfavored forms of housing investment. (CATO Institute, March 4)

Industry & RER Advocacy

  • RER and broad housing coalitions have been making the same supply-focused case for weeks. (Roundtable Weekly, Jan. 9 | Jan. 16 |  Jan. 23 | Feb. 27)
  • “On one hand, it undermines the whole idea of the [ROAD to Housing Act] if the purported idea of [the bill] was to help us build more housing and reduce barriers to building, and then you create this legal structure that makes it effectively impossible to build and finance in this very important sector,” said Sharon Wilson Géno, president of National Multifamily Housing Council. (PoliticoPro, March 4)
  • RER member Sean Dobson ( Chairman, CEO and CIO, Amherst) echoed that argument in an op-ed this week, that restricting single-family rental supply does not erase the financial barriers that keep many households from buying; it simply reduces housing options for families who are structurally constrained from homeownership by income, credit, and down payment hurdles. (Fortune, March 5)
  • In a March 5 coalition letter to Senate leaders and the Banking Committee, RER and dozens of national housing organizations warned that Section 901, as drafted, “would effectively eliminate the production of Build-to-Rent (BTR) housing.” (Letter, March 5) (Bisnow, March 5 | Politico, March 5)
  • “It doesn’t prohibit it, but it greatly discourages build-to-rent activities,” RER President & CEO Jeffrey DeBoer told Bisnow in an interview Friday. (Bisnow, March 6)
  • “These projects take years to get through the development process, the zoning process, the funding process,” he added. “Requiring any private business or citizen to sell any kind of asset in a certain time is highly unusual, and I think a lot of people would say it’s unconstitutional.”
  • The letter notes that the bill’s seven-year disposition rule would chill investment across the BTR supply chain, even with nominal exemptions. It urges the Senate to amend the bill to fully exempt BTR housing. (PoliticoPro, March 5)
  • DeBoer also issued a statement earlier this week, following the release of the bill’s updated legislative text, “The Real Estate Roundtable supports many provisions in the ROAD to Housing Act and the Housing for the 21st Century Act, both of which take important steps toward expanding housing supply.  Expanding housing supply requires significant capital investment.  However, the institutional investor provisions under consideration in the Senate bill would be counterproductive. These provisions would discourage the capital investments that are needed to develop, redevelop, and modernize the nation’s owner-occupied and rental housing stock. In particular, the provision to force institutional owners of rental housing to sell the homes that they build within a specified 7-year timeframe would discourage investment in home construction, could actually result in rent increases in many markets, and would no doubt face substantial constitutional challenges. While much of the housing bill now before the Senate is properly focused, the institutional investor provisions should be dropped.” (RER Statement, March 4)

What’s Next

  • The Senate bill still must clear final passage and be reconciled with the House before it can reach the president’s desk. There is speculation that a vote on final passage of the package could happen as early as next week. (PoliticoPro, March 4)

RER will continue advocating for policies that expand housing supply and protect the capital formation needed to build and preserve housing, rather than measures that risk constraining investment without solving the underlying shortage.

DOE Assumes Lead Responsibilities for ENERGY STAR

Posted on by abigail_grenadier

A federal agency Memorandum of Agreement (MOA) signed this week provides that the U.S. Department of Energy (DOE) will assume lead responsibilities to implement the ENERGY STAR program as oversight of the effective, popular, and voluntary public-private partnership shifts from the U.S. Environmental Protection Agency (EPA). (E&E News, March 5)

ENERGY STAR Transition

  • DOE and EPA signed the MOA for an “orderly” transition of ENERGY STAR activities including oversight of partnership agreements, trademarks, and related IT systems and databases. (Memorandum, March 2)
  • The MOA explains that a 90-day plan will provide details regarding the agencies’ transition.
  • The MOA further explains that transition activities will be initially funded by each agency using their own funds appropriated by Congress. Federal law authorizes DOE and EPA to transfer funds “as the transition progresses.”
  • Congress provided approximately $33 million for ENERGY STAR to EPA in the FY’26 appropriations bill (H.R. 6938), signed into law on Jan. 23. This law maintains funding through Sept. 30 and preserves ENERGY STAR following prior Trump administration reports to privatize the program – or de-fund it altogether. (Roundtable Weekly, Jan. 9) 

Why It Matters

  • The Real Estate Roundtable’s (RER) advocacy, in collaboration with coalition partners in the real estate, manufacturing, and consumer products sectors, has long emphasized that ENERGY STAR is a federal program required by federal law. It cannot be privatized or run outside of the U.S. government by agency decree. (Roundtable Weekly, May 9, 2025)
  • For example, RER joined dozens of industry groups last year in a letter to Congress to “strongly support continuation of the non-regulatory and non-partisan ENERGY STAR program within the federal government.” (Roundtable Weekly, June 6). The multi-industry letter cites federal statutes that compel ENERGY STAR to be a program run by federal agencies—with DOE and EPA authorized to assign program responsibilities between themselves, as indicated by this week’s Memorandum of Agreement.

RER View

Tony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.), chair of The Roundtable’s Sustainability Policy Advisory (SPAC) Committee.
Tony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.)
  • RER has long urged the “business case” to support the ENERGY STAR program.
  • “We look forward to continuing our longstanding partnership with the federal government’s ENERGY STAR program as DOE assumes the lead implementation role,” said RER’s President & CEO Jeffrey D. DeBoer. “DOE has the data, talent, lab research, and other resources to run all facets of ENERGY STAR efficiently and effectively. Down the years, ENERGY STAR for buildings has saved families and businesses hundreds of billions of dollars in energy costs, and helps create greater capacity on the grid to boost economic growth. We are ready to roll-up-our-sleeves to evolve ENERGY STAR to support a new generation of cutting-edge buildings, plants, and consumer products.”
  • “DOE has long been a key part of the ENERGY STAR ecosystem and is ideally suited to assume the role as the program’s primary steward,” said RER’s Sustainability Policy Advisory Committee (SPAC) Chair, Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.). “ENERGY STAR enhances profitability of buildings and establishes a voluntary reporting structure for real estate assets. It helps our industry attract investors from all over the world to the United States. ENERGY STAR works better than any other building energy ‘label’ on the market because it is grounded in quantifiable metrics and deploys standard software geared to save money on utility bills and avoid wasted energy.”
  • Malkin continued, “Real estate’s coalition with the manufacturing sector will continue to impress upon Congress and the Trump administration the critical role ENERGY STAR plays to advance America’s energy dominance and global competitiveness.”

In the coming months, RER will partner with DOE, EPA, and aligned stakeholders to accomplish a seamless and productive transition of the ENERGY STAR program.

Senate Takes Up House Housing Bill as White House Seeks Limits on Institutional Investors

Posted on by abigail_grenadier

President Donald Trump used his State of the Union address on Tuesday to renew his call for Congress to codify limits on large institutional investors buying additional single-family homes, as lawmakers work to merge bipartisan House and Senate housing packages into a final deal set for a vote next week. (Axios | PoliticoPro, Feb. 25)

State of Play

  • “We want homes for people, not for corporations,” Trump said as he urged Congress to make the policy permanent. (PoliticoPro, Feb. 25)
  • House Republicans met this week with Treasury Secretary Scott Bessent as lawmakers explore legislative language tied to the housing package. Trump and Bessent have said that any final legislation must include language banning large investors from purchasing single-family. (Reuters, Feb. 19 | PoliticoPro, Feb. 26)
  • Some lawmakers and analysts have argued that investor bans do not address the core affordability driver—a persistent housing supply shortage. Goldman Sachs estimates the U.S. would need to build up to 4 million additional homes beyond the normal pace to reduce the deficit. (CBSNews, Feb. 25 |Washington Examiner, Feb. 26)

What’s Next: Bipartisan Housing Bill Vote

  • Senate Majority Leader John Thune (R-SD) filed cloture Thursday on the House-passed  Housing for the 21st Century Act (H.R. 6644), setting up a Monday vote on the motion to proceed as leadership uses the House bill as the vehicle for a version of the Senate Banking Committee’s ROAD to Housing Act. (PoliticoPro, Feb. 26 |Roundtable Weekly, Feb. 13)
  • The House passed the bipartisan bill earlier this month with broad support, and the Senate advanced its bill in October. The two sides are now negotiating a final package. (PoliticoPro, Feb. 26 | Roundtable Weekly, Oct. 17)
  • Senate aides said the Senate package could include some provisions from the House’s bill, including measures to expand manufactured and affordable housing and protect borrowers. The Senate measure wouldn’t include the House version’s community banking provisions. (PoliticoPro, Feb. 26)
  • House Financial Services Chair French Hill (R-AR) welcomed Majority Leader Thune’s move but urged a final product that reflects “shared priorities of the House, Senate, and White House,” as the administration continues to press for some form of large-investor purchase restriction to be included in any final bipartisan housing deal. (Press Release, Feb. 26)

White House Proposal

  • In a memo sent to lawmakers last week, the administration proposed banning institutional investors who own more than 100 single-family homes from buying any new ones. (CNBC, Feb. 24)
  • The proposal would continue to allow build-to-rent developments, where investors construct new single-family homes specifically for rental use. (WSJ, Feb. 26)
  • Government entities and community land trusts would be exempt altogether, and the Treasury Department would retain authority to approve other transactions deemed to expand homeownership opportunities, giving regulators flexibility to avoid unintended consequences for buyers and renters.
  • Treasury’s forthcoming definitions of “large institutional investor” and “single-family home” are expected to shape scope and compliance, including what property types are captured and how thresholds are applied. (GlobeSt., Feb 26)
  • The ban would apply only to future purchases—without forcing investors to sell existing holdings—and would take effect 180 days after enactment. (CoStar, Feb. 20)

By the Numbers

  • A recent American Action Forum analysis found that large institutional investors have expanded the much-needed supply of rental homes, improved housing quality, and added liquidity in under supplied markets. (AAF Study, Feb. 12)
  • A Chandan Economics review of Census Bureau data finds individual investors—not institutions—own the largest share of U.S. single-family rentals (SFRs). The analysis draws on the Census Bureau’s 2024 Rental Housing Finance Survey (data collected June-November 2024), a comprehensive snapshot of rental-property mortgage financing. (Chandan Economics, Feb. 19 |GlobeSt., Feb. 25)

RER Advocacy

  • The Real Estate Roundtable (RER) has consistently emphasized that expanding housing supply is the most effective path to improving affordability, as research shows affordability pressures are driven primarily by supply shortages, construction costs, and mortgage rates—not institutional ownership levels. (Roundtable Weekly, Jan. 9 | Jan. 16)
  • RER President & CEO Jeffrey DeBoer said, “Evidence shows that policy attacks on institutional investment in housing or other real estate are misguided.  Institutional investors actually expand the supply of rental homes, thus driving down rents. Their investments enable financially constrained families to move into neighborhoods that previously had few rental units, and these investments tend to improve the quality of the existing housing stock. While politically popular, restricting capital into housing will not address the housing problem.  Instead, policy should, as the bulk of the House and Senate bills do, intensely focus on expanding the supply of housing.”
  • In a Feb. 10 comment letter to House Financial Services Committee leadership, RER and national real estate trade groups cautioned against limiting institutional capital in the housing market, including SFR assets. (Comment Letter, Feb. 10 | Roundtable Weekly, Feb. 13)

New Senate Legislation Introduced

  • On Tuesday, Sens. Elizabeth Warren (D-MA), and Jeff Merkley (D-OR), and 16 other Senate Democrats introduced the American Homeownership Act. The bill would prevent companies with more than 50 single-family homes for rent from taking deductions for housing value depreciation and mortgage interest payments. Corporations would also be barred from getting federally backed mortgages. (Bill text | Bill fact sheet | Press Release, Feb. 24)
  • The bill would provide a temporary carve-out for companies building new multifamily housing or rehabilitating properties that would otherwise be uninhabitable. (CNBC, Feb. 24)
  • Edward Pinto, co-director of the AEI Housing Center at the American Enterprise Institute, said a more effective proposal would meet three specific criteria: reducing land costs, allowing homes to be built on smaller parcels, and lowering construction costs. (CBS News, Feb. 25)

RER will continue advocating for policies that expand housing supply and protect the capital formation needed to build and preserve housing—rather than measures that risk constraining investment without solving the underlying shortage.

Treasury Signals Revisions for Proposed Section 892 Rules After Industry Feedback

Posted on by abigail_grenadier

The U.S. Department of the Treasury is revising its proposed Section 892 regulations after the investment and real estate industries raised concerns that aspects of the framework could raise their cost of capital by deterring passive investment by foreign governments, including sovereign wealth funds.

State of Play

  • A Treasury Department spokesperson told Bloomberg Law the agency is “revising the proposal to address key issues and ensure it supports stable, long-term capital flows,” citing feedback from the investment and real estate industry, including The Real Estate Roundtable (RER). (Bloomberg Law, Feb. 20)
  • The proposed Section 892 regulations (REG-101952-24) address two critical questions that can trigger U.S. tax liability: when a foreign government has effective control of an entity engaged in commercial activities, and when an acquisition of debt by a foreign government is considered to be commercial activity.
  • Treasury tax policy officials also indicated the proposed regulations—if finalized—will not be applied retroactively to existing transactions and structures. (Tax Notes, Feb. 23)

RER Advocacy

  • Earlier this month, RER submitted a comment letter to Treasury Secretary Scott Bessent on the Section 892 final and proposed rules, urging clear grandfathering rules and changes to prevent disruptions to sovereign investment in U.S. real estate. (Letter, Feb. 12)
  • The letter recommended targeted fixes, including clarifying that customary minority protections do not create effective control; confirming that withholding agents may rely on foreign government self-certifications; and adding safe harbors (including for certain distressed-debt modifications).
  • RER’s recommendations would ensure U.S. real estate owners and developers can continue to mobilize capital from foreign government sources while preserving Section 892’s fundamental distinction between tax-exempt investment activities and taxable commercial activities. (Roundtable Weekly, Feb. 13)

RER’s Tax Policy Advisory Committee (TPAC) Advocacy

  • The letter was developed by TPAC’s Section 892 Working Group, which includes representatives from a diverse group of foreign investors, U.S. real estate sponsors, and outside advisors.The principal drafter was TPAC member and Skadden partner Nickolas Gianou.

RER will continue engaging Treasury to ensure the final Section 892 regulations do not discourage sovereign capital that supports U.S. real estate investment and jobs.

The Fed Signals Capital and Liquidity Reforms as Basel III Endgame Work Continues

Posted on by abigail_grenadier

The Federal Reserve is moving to recalibrate key elements of the U.S. bank capital and liquidity framework, including Basel III Endgame implementation and targeted mortgage-capital adjustments. The Fed’s Vice Chair for Supervision, Michelle Bowman, signaled this week that reforms should support market liquidity and credit availability while maintaining safety and soundness. (FinancialTimes, Feb. 16)

State of Play

  • Bowman told bankers at the ABA’s 2026 Conference for Community Bankers this week that the Fed will soon seek comment on two proposals to encourage banks to re-engage in mortgage origination and servicing, within the Basel framework. (Speech, Feb. 16)
  • Bowman pointed to a “concerning trend” of mortgage activity to nonbanks. She cited data showing banks originated roughly 60% of mortgages in 2008 and serviced roughly 95% of outstanding balances; by 2023, those figures had fallen to about 35% and about 45%, respectively. (HousingWire, Feb.16).
  • The mortgage capital discussion comes as the Trump administration seeks tools to bolster affordability and credit availability, including directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. (Reuters, Feb. 18)
  • “By creating a resilient mortgage market that includes robust participation from all types of financial institutions, we can deliver affordable credit and high-quality servicing to borrowers regardless of economic conditions,” Bowman said. (Speech, Feb. 16)
  • Bowman said the shift has implications for the banking industry, mortgage market stability, and consumers.

Basel III Endgame

  • In separate remarks on Feb. 19, Bowman said regulators are modernizing the “four pillars” of the capital framework—stress testing, supplementary leverage ratio (SLR), Basel III Endgame, and the G-SIB surcharge—with a focus on market liquidity and affordable homeownership alongside safety and soundness. (Speech, Feb. 19)
  • Bowman said the Basel effort is “bottom-up,” not “reverse engineered,” arguing that finalizing Basel III would reduce uncertainty and provide clarity for bank capital standards. (PoliticoPro, Feb. 19)
  • The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) recently submitted their Basel-related proposals to the Office of Management and Budget (OMB) for review—an important step in the interagency process. (Reuters, Feb. 13)
  • The Trump administration regulators have said they plan to rewrite liquidity rules, though details have not been released. (PoliticoPro, Feb. 19)
  • Bowman’s recent remarks are the clearest signal yet of how the Fed may recalibrate the U.S. approach to Basel capital implementation, following industry concerns that earlier proposals could constrain credit and further shift activity to less-regulated lenders.

Roundtable Advocacy

  • In December, RER and a coalition of leading business trade organizations urged prudential regulators to examine and modernize large bank capital requirements so they continue supporting consumers, businesses, and the broader U.S. economy. (Letter, Dec. 2)
  • The coalition letter underscored the negative economic impacts of inappropriately calibrated capital rules, highlighted risks to American competitiveness, and commended ongoing agency efforts to improve the framework. (Roundtable Weekly, Dec. 5)

What’s Next

  • The Fed is expected to issue the mortgage-capital proposals for public comment before any changes take effect, while agencies continue advancing a revised Basel III Endgame package.
  • Bowman is expected to testify next Thursday alongside the heads of the OCC, the FDIC, and the National Credit Union Administration at a Senate oversight hearing. (WSJ, Feb. 19)

As regulators advance both targeted mortgage capital adjustments and a revised Basel III Endgame proposal, RER will remain engaged to ensure capital reforms do not constrain credit flows essential to commercial real estate, economic activity, and long-term investment, while protecting safety and soundness.

Commercial Real Estate Sentiment Steady in Q1 2026 as Debt Availability Improves

Posted on by abigail_grenadier

The Real Estate Roundtable (RER) today released its First Quarter 2026 Sentiment Index, a quarterly measure of confidence among senior commercial real estate (CRE) executives. The overall index registered 66, down one point from Q4 2025, as respondents described a market in the early stages of a tentative, uneven recovery. Tariffs and interest-rate uncertainty continue to widen buyer-seller spreads and slow price discovery. (Q1 Report, News Release, Feb. 20)

Topline Findings

The Q1 Sentiment Index topline findings include:

  • The Q1 2026 Real Estate Roundtable Sentiment Index registered an overall score of 66, a decrease of one point from the previous quarter. The Current Index registered 66, a two-point increase over Q4 2025. The Future Index posted a score of 67 points, a decrease of two points from the previous quarter, reflecting a prevailing sentiment that the market is in the early stages of a tentative, uneven recovery. Political, tariff, and interest rate uncertainty is contributing to wide spreads between buyers and sellers. Amid the uncertainty around pricing clarity and geopolitical stability, participants are cautiously optimistic for an improved 2026.
  • Although perspectives vary by asset class, overall market sentiment trends positive. Less than 10% of respondents believe that general market conditions are worse than this time last year, and 63% believe that general market conditions are better than this time last year. Furthermore, 64% expect general market conditions to show improvement one year from now. Leaders reported strength in data centers and industrial, while returns in the multifamily and office sectors remain heavily location-dependent.
  • Forty-three percent (43%) of respondents believe asset values are roughly unchanged compared to a year ago. Nearly half of participants are seeing green shoots, as 48% believe asset prices have increased while only 9% believe they have declined. Looking ahead, the outlook is optimistic: 67% expect asset prices to rise over the next year, 30% believe asset values will remain stable, and only 3% anticipate a slight decline.
  • Perceptions of equity capital availability are muted relative to last quarter, although about four in 10 respondents (42%) still believe equity availability is better than a year ago. On the other hand, sentiment around debt capital has risen significantly, with 78% saying the availability of debt capital has improved from last year. Looking ahead, 65% believe equity capital availability will be better in one year, and 49% believe debt capital availability will be better.

Roundtable View

  • RER President and CEO Jeffrey DeBoer said, “This quarter’s survey shows the market is stabilizing, with improving debt availability and growing optimism about the year ahead—even as uncertainty continues to keep transaction volume below potential.”
  • “The industry is positioned for a more constructive 2026, but sustained momentum will depend on a stable policy environment,” DeBoer added. “That stability supports investment decisions that drive jobs, housing, and economic activity in communities nationwide.”

Data for the Q1 survey was gathered by Chicago-based Ferguson Partners on RER’s behalf in January. See the full Q1 report.

First Circuit Hears Denham Oral Argument as SECA Limited Partner Fight Continues

Posted on by abigail_grenadier

The legal dispute over the tax code’s limited partner exception from self-employment (SECA) taxes remains very much alive, with the issue now in various stages of litigation before three federal appellate courts. The IRS is asserting that a limited partner must be a passive investor.

Denham Oral Arguments

  • On Feb. 5, the First Circuit heard oral argument in Denham Capital Management LP, et al. v. Commissioner (No. 25-1349), while a related appeal in Soroban Capital Partners LP v. Commissioner is pending in the Second Circuit. The Fifth Circuit also recently issued a significant decision in Sirius Solutions, L.L.L.P. v. Commissioner (No. 24-60240). (Roundtable Weekly, Jan. 30)
  • The First Circuit heard oral arguments in Denham before Chief Judge David Barron, Judge Kermit Lipez, and Judge Lara Montecalvo Rikelman. Most of the argument focused on jurisdictional issues, which could allow the court to resolve the case without reaching the merits.
  • On the merits, the panel posed tough questions to Denham and the IRS. The discussion focused on the meaning of a limited partner in 1977 when the exception was enacted, prior case law, relevant dictionary definitions, the Revised Uniform Limited Partnership Act, and the provision’s legislative history.
  • In the course of the argument, Denham emphasized state law developments leading up to the 1977 amendments and, notably, cited The Real Estate Roundtable’s (RER) amicus brief in support of its position. (RER Amicus Brief, Aug. 15; Roundtable Weekly, Sept. 12, 2025)

Why It Matters

  • Income-producing real estate is predominantly owned and operated through partnerships, and the IRS’s litigation campaign creates risk for long-standing structures relied on by real estate and other pass-through businesses.
  • A circuit split among the First, Second, and Fifth Circuits could accelerate Supreme Court review of the issue.

RER Advocacy

  • RER is actively engaged across the circuits to oppose the IRS’s restrictive “passive investor” approach:
  • First Circuit (Denham): RER filed an amicus brief in August 2025 supporting the taxpayer’s challenge to the Tax Court’s judge-made “passive investor” test and explaining the long-standing reliance of real estate partnerships on state-law limited partner status.
  • Second Circuit (Soroban): RER filed an amicus brief in December 2025 urging reversal of the Tax Court’s Soroban approach and warning that a new federal “passivity” overlay would inject uncertainty and increase tax burdens for partnership-based businesses. (Roundtable Weekly, Dec. 19, 2025)
  • Fifth Circuit (Sirius): RER filed an amicus brief in 2024, and the Fifth Circuit’s Jan. 16, 2026 decision rejected the Tax Court’s passivity-focused framework in favor of a status-based analysis tied to limited liability.  (Roundtable Weekly, Jan. 30)

What’s Next

  • The First Circuit’s decision in Denham could turn on jurisdictional challenges, but the merits questions at argument underscored that the government’s “passive investor” theory remains contested and unstable across the courts.

RER will continue pressing its position through amicus advocacy to protect the flexibility inherent in partnership tax rules and preserve the long-standing tax exemption for limited partners.

Roundtable Urges Treasury to Modify Proposed Regulations on Sovereign Investment in U.S. Real Estate

Posted on by abigail_grenadier

The Real Estate Roundtable (RER) submitted a comment letter to Treasury Secretary Scott Bessent on Treasury’s recently issued Section 892 regulations and related proposed rules that could materially affect sovereign investment in U.S. real estate. (Letter, Feb. 12)

Why It Matters

  • Foreign investment, including investment by sovereign wealth funds, foreign pension funds, and other government entities, is a critical source of financing for capital-intensive U.S. real estate projects.
  • Since 2011, foreign governmental investors have invested over $100 billion in U.S. commercial real estate.
  • “This patient and long-duration foreign capital drives ambitious and transformative investments that create new housing supply, lower housing costs, and spur job growth and economic opportunity in American cities,” wrote Roundtable President and CEO Jeffrey DeBoer.
  • Section 892 generally exempts from U.S. tax certain dividend and interest income—and gains on sales of securities—earned by foreign governments, unless the income is treated as commercial activity income or income from a controlled commercial entity. The provision traces back to 1917.
  • On Dec. 15, Treasury released final Section 892 regulations and issued new proposed regulations addressing two key questions: (1) when a foreign government has effective control of an entity engaged in commercial activities, and (2) when an acquisition of debt is considered commercial activity.
  • These issues have important consequences for existing and future sovereign investment in U.S. real estate.

RER Recommendations

  • The RER letter commends Treasury for its general approach and for clarifying specific issues. At the same time, RER expressed concerns regarding aspects of the proposed regulations that could disrupt inbound real estate investment and raise the cost of capital for U.S. real estate projects.
  • For example, the proposed rules can be read to restrict foreign governmental investors’ ability to secure certain investor protections, such as veto rights over major investment and financing decisions. Such restrictions could deter and discourage foreign governments from investing in the United States.
  • The letter highlights these concerns while offering specific solutions that Treasury could incorporate in its final rulemaking. These include:
  • Clarifying that customary minority investor veto rights do not create effective control;
  • Grandfathering existing investments;
  • Confirming U.S. withholding agents can rely on self-certifications from foreign governments;
  • Clarifying that certain modifications of distressed debt are not commercial activity; and
  • Establishing debt-related safe harbors for specific situations.
  • In short, RER’s recommendations would ensure U.S. real estate owners and developers can continue to mobilize capital from foreign government sources while preserving Section 892’s fundamental distinction between tax-exempt investment activities and taxable commercial activities.

RER’s Tax Policy Advisory Committee (TPAC) Advocacy

  • The letter was developed by TPAC’s Section 892 Working Group, which includes representatives from a diverse group of foreign investors, U.S. real estate sponsors, and outside advisors. The principal drafter was TPAC member and Skadden partner Nickolas Gianou.

The current Administration and Treasury leadership have emphasized the importance of passive foreign investment to U.S. job creation and growth. Treasury has not yet indicated when it anticipates finalizing the new Section 892 proposed regulations.

House Passes Bipartisan Housing Package; HFSC Hearings Spotlight Affordability and Secondary Mortgage Market

Posted on by abigail_grenadier

This week, the House overwhelmingly passed the bipartisan Housing for the 21st Century Act (H.R. 6644). Following Monday’s vote on this sweeping bill, the House Financial Services Committee (HFSC) held a hearing on Tuesday to examine how policies in the financial services and housing sectors contributed to rising cost-of-living pressures for American families by restricting access to capital and credit. On Wednesday, the Subcommittee on Housing and Insurance held a hearing to examine housing affordability and the role of the secondary mortgage market.

Housing for the 21st Century Act

  • On Monday, the House approved the bipartisan Housing for the 21st Century Act by a 390-9 vote, marking one of the strongest bipartisan housing votes in recent years. (The Hill, Feb. 10)
  • Led by HFSC Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA), the legislation includes provisions to streamline housing production and affordability by updating outdated programs, removing unnecessary federal requirements, increasing local flexibility, and allowing banks to more freely deploy funding.  (The Hill, Feb. 10 | Comment Letter, Feb. 6)
  • The bill addresses a housing shortfall of up to 5.5 million units, driven by regulatory delays, zoning constraints, and rising construction costs. (The Hill, Feb. 6)
  • In a Feb. 6 letter to Congress, The Real Estate Roundtable (RER) joined a group of national real estate and housing organizations in expressing “strong support” for the measure, commending the HFSC for advancing “practical, solutions-oriented housing policy.” (Comment Letter, Feb. 6)
  • The coalition added that the bill “supports increased housing supply, improved access to homeownership, and appropriate consumer protections, particularly in high-cost and underserved communities.” (Comment Letter, Feb. 6)
  • The bill’s passage in the House sets up negotiations with the Senate, which passed its own housing legislation—the ROAD to Housing Act—late last year. The two bills contain similar supply-side reforms but differ on certain grant programs and community bank provisions. (Punchbowl News, Dec. 14)

Hearing on Affordability Crisis

  • On Feb. 10, the HFSC held a hearing titled, “Priced Out of the American Dream: Understanding the Policies Behind Rising Costs of Housing and Borrowing,” focused on legislative and regulatory proposals to address the affordability crisis. (HFSC Hearing, Feb. 10)
  • The hearing noticed three proposals to restrict institutional investment in single-family rentals (SFRs)—a topic that has gained momentum following a related Executive Order issued last month. However, the SFR issue surfaced only briefly during Tuesday’s session, and none of the restrictive measures advanced. (Executive Order, Jan. 20)
  • In a Feb. 10 comment letter to HFSC leadership, RER and national real estate trade groups cautioned against limiting institutional capital in the housing market, including SFR assets. (Comment Letter, Feb. 10)
  • The letter explained, “There is no evidence that institutional investors are crowding out prospective homebuyers,” citing data showing that institutional investors accounted for just 0.3 percent of the $2 trillion in single-family home purchases over the past year. (Comment Letter, Feb. 10)
  • The letter highlighted the positive developments that institutional investors have contributed to the market, stating, “Institutional SFR investment expands rental supply in markets where it was previously limited, increases access to high-opportunity neighborhoods, and benefits households with lower incomes, wealth, and savings.” (Comment Letter, Feb. 10)
  • RER and coalition partners also urged lawmakers to avoid policies that would restrict capital formation and instead prioritize supply-forward reforms to close the nation’s housing gap. (Comment Letter, Feb. 10)

Homeownership and the Secondary Mortgage Market

  • On Feb. 11, the HFSC’s Subcommittee on Housing and Insurance held a hearing titled, “Homeownership and the Role of the Secondary Mortgage Market,” examining the structure, function, and evolution of the market and how the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac impact housing affordability. (HFSC Subcommittee Hearing, Feb. 11)
  • In his opening remarks, Subcommittee Chairman Mike Flood discussed the importance of liquidity and capital efficiency in today’s regulatory environment.
  • “The secondary mortgage market works to provide greater liquidity for lenders and results in greater access to mortgage lending for borrowers. In today’s banking regulatory climate, holding a mortgage on a bank’s balance sheet can result in significant capital costs,” Chairman Flood said. (Rep. Flood Press Release, Feb. 11)
  • Chairman Flood added that no legislation was noticed during the hearing, as the session was intended to explore the subject matter in-depth.
  • Bob Broeksmit, President and CEO of the Mortgage Bankers Association, touched on the substantial role that GSEs play in the secondary market. He also advocated that any reforms enacted to end the GSEs’ government conservatorship provide “an ample runway to ensure deep, liquid secondary markets for single-family and multifamily mortgages through all economic cycles and in all geographic regions.” (MBA Testimony, Feb. 11)

RER will continue engaging lawmakers in both chambers to advance durable housing solutions and sensible GSE reforms that support homeownership, expand affordable housing supply, and sustain economic growth.