Why it Matters

• The retaliatory tax provision is part of the broader House reconciliation package and would impose steep tax increases on investors from countries that enact "unfair" taxes on U.S. businesses.  (Bloomberg, June 12)

• The coalition letter cautions that, without changes, the retaliatory tax measure could potentially drive up borrowing costs, depress property values, and significantly deter foreign investment in housing, commercial developments, and infrastructure projects nationwide. (PoliticoPro, June 13)

• As drafted, the policy would apply broadly to both equity and debt investments in U.S. real estate, including capital gains, REIT dividends, and interest income—regardless of whether the investor has any controlling stake in the U.S. property.

• The coalition urges the Senate to revise Section 899 to exempt non-controlling real estate investments—passive holdings that do not involve day-to-day management.

• The coalition is also seeking to ensure the exemption applies to both new and existing transactions made under current law and tax treaties, and prevent an unintended retroactive tax increase that could disrupt capital markets and undermine confidence in U.S. investment stability. (Letter, June 12)

• On Institutional Real Estate, Inc.’s podcast this week, RER President & CEO Jeffrey DeBoer emphasized the importance of maintaining stable, predictable tax policy to attract investment and fuel economic growth—echoing the coalition’s call for Senate revisions to Section 899 that avoid discouraging capital formation in U.S. real estate. (IREI Podcast, June)

• Speaking at the NYU Federal Real Estate and Partnerships Tax Conference today, RER Senior Vice President and Counsel Ryan McCormick warned that Section 899 “would impose higher tax rates on foreign capital that is critical to U.S. real estate, impacting interest income, REIT dividends, and direct property investments. Without an exemption for passive investors, it would have a chilling impact on investment, raise borrowing costs, and slow economic growth.”

By the Numbers

• Over the past five years, foreign sources have invested more than $213 billion in U.S. commercial real estate, including $57 billion in multifamily housing. This cross-border capital supports construction, jobs, housing affordability, and local tax revenue. (Letter, June 12)

• The Joint Committee on Taxation has projected that Section 899 would lead to a “decline in foreign demand for U.S. investment” and ultimately reduce Treasury revenues. (AP News, June 10)

• The Global Business Alliance, which represents foreign multinationals with U.S. operations, released a new study on Tuesday that found Section 899 would result in $100 billion a year in lost gross domestic product. ( PoliticoPro, June 11)

View from Capitol Hill

• Republican senators have said they’re taking a deeper look at that provision and could make changes when the Senate Finance Committee’s version of the tax bill is released. (PoliticoPro, June 13)

• During a House Ways and Means Committee hearing on Wednesday, Treasury Secretary Scott Bessent defended the so-called revenge tax in the GOP megabill, in the face of concerns that it could deter foreign investment. (Watch Hearing | PoliticoPro, June 11)

• Secretary Bessent also testified at the Senate Finance Committee hearing on the president’s fiscal 2026 budget request for the Treasury and tax reform on Thursday.

• Sen. Thom Tillis (R-N.C.), who’s questioned the proposal, told reporters Tuesday that he at least expects a delay in the proposal. (Bloomberg, June 10)

• House Ways and Means Chair Jason Smith (R-MO) indicated the preferred outcome would be for the revenge tax never to take effect, urging foreign governments to eliminate discriminatory measures, such as digital services taxes. (PoliticoPro, June 11)

What’s Next

Senate Finance Republicans are expected to release revised legislative text of the One Big Beautiful Bill Act in the coming weeks. “We’re working as aggressively as we can to move as fast as we can,” Senate Finance Chair Mike Crapo (R-ID) said. (Politico, June 9)

RER continues to advocate for smart tax policy that avoids unintended consequences while maintaining the U.S. real estate market’s global competitiveness.

Widespread demonstrations against recent Immigration and Customs Enforcement (ICE) raids, including National Guard deployments across the nation, prompted urgent coordination among commercial real estate leaders this week through The Real Estate Roundtable’s (RER) Homeland Security Task Force (HSTF). (Washington Post, June 13)

Why it Matters for CRE

• In response to protests over recent immigration sweeps across the U.S., RER’s HSTF,  Real Estate Information Sharing and Analysis Center (RE-ISAC), and partnership with the Commercial Facilities Sector Coordinating Council convened several calls this week to assess potential impacts on properties and personnel. (Axios, June 9)

• The escalating risk environment, including looting, anti-government extremism, and threats against infrastructure—has immediate implications for commercial real estate assets.

• Protests in L.A. County and across the country triggered curfews and disruptions across business sectors, including retail, restaurants, and hotels.

• Tesla Supercharger stations and other critical infrastructure were identified as high-risk. Fires and vandalism remain top concerns, especially near historic and civic buildings.

• Last month at RER’s HSTF Meeting, one of the discussions included a review of the risks to commercial facilities from lithium-ion batteries with John Frank (AXA XL Risk Consulting). The meeting also included a series of briefs from the FBI regarding the threats from terrorist and transnational criminal organizations that are directly threatening U.S. citizens and commercial facilities. (Roundtable Weekly, May 30)

RER’s Homeland Security Task Force and RE-ISAC Response

• Rising global tensions are also heightening domestic security concerns. The U.S. has repositioned military resources in the Middle East in response to Israeli strikes across Iran—a development that raises the risk of Iranian retaliation and potential threats to homeland security and critical infrastructure. (AP News | Axios, June 13)

• Through the HSTF, RER works with government officials and private sector partners to detect, protect, and respond to a multiplicity of key threats.

• Under the oversight of the HSTF, the RE-ISAC, serves as the primary conduit of terrorism, cyber and natural hazard warning and response information between the government and the commercial facilities sector.

•  “This moment requires vigilance, clarity, and coordination across sectors,” said HSTF Chair Amanda Mason (Executive Director, Global Intelligence, Related Companies), who led several calls throughout the week.

• RE-ISAC’s information-sharing network coordinates activities supporting the detection, prevention, and mitigation of a full range of physical, data, and cyber threats to the nation’s critical infrastructure.

RER, through its HSTF, will remain engaged in efforts to address evolving threats affecting the sector. Through regular briefings and coordination with public- and private-sector partners, the HSTF will continue to support preparedness and resilience across the industry.

As Senate Republicans navigate internal divisions and mounting pressure from the White House, critical policy decisions in the reconciliation package—including tax reforms, energy, and trade provisions are rapidly taking shape with implications for commercial real estate.

State of Play

• More doubts have emerged among GOP leaders about whether the Senate will be able to meet its self-imposed July 4 deadline for passing its version of the reconciliation package.

• Though Speaker of the House Mike Johnson (R-LA) believes that the GOP is still on track, he emphasized that meeting the deadline hinges upon how much the Senate’s bill diverges from the House bill passed last month. 

• “We’ll see what they produce,” Johnson told Politico, adding, “I just need them to come to their final decisions on everything. So we’ll see how it shapes up.” (Politico, June 11) 

• Though the White House is keeping the pressure on senators, even President Donald Trump has acknowledged that additional time could be needed to finalize the reconciliation measure. (Politico, June 11)   

• For their part, House Republicans approved several changes to their bill this week that were necessary in order to keep it in compliance with Senate rules. (Politico, June 10)  

• If the Senate makes major revisions, the bill could go to conference in July in order to hammer out the differences, which could run up against the U.S. hitting its debt limit in August. (Axios, June 11) 

• Senate Majority Leader John Thune said his team and key Senate committee chairs are coordinating closely with Speaker Johnson, holding weekly meetings and frequent calls to prevent the House from altering a bill that passes the Senate.

• “There’s just a lot of coordination to hopefully avoid some of the potential snafus that could happen with something that's this complicated,” Thune said. (Politico, June 11)

Key Issues 

• Fiscally conservative Sens. Rand Paul (R-KY) and Ron Johnson (R-WI), among others, continue to scrutinize the long-term effect that the "Big Beautiful Bill" would have on the budget deficit.

• In an interview with the Financial Times on Tuesday, Sen. Johnson conditioned his vote on assurances that the White House would cut more federal spending with a second major bill before next year’s midterm elections. (Financial Times, June 11)

• The spotlight remains on the Senate Finance Committee, with Chairman Mike Crapo (R-ID) telling GOP senators Wednesday that he plans to scale back the House’s cap on the deductibility of state and local taxes (SALT) for individuals and rework repeals of clean energy tax credits from the Inflation Reduction Act (IRA). (Punchbowl News, June 12) 

• Senate Republicans are also aiming to make business tax deductions for R&D, equipment purchases, and interest on debt permanent, rather than temporary as proposed in the House bill. (Punchbowl News, June 13)

IRA Energy Tax Credits

• Senate Majority Leader John Thune (R-SD) is juggling different IRA demands, including at least four senators who want a less aggressive approach to the House’s proposed repeals. (Punchbowl News, June 12)

• Sixteen clean energy tax incentives could be repealed or modified under the House-passed reconciliation bill, now under review by the Senate. Proposed changes to the IRA’s clean energy credits would eliminate incentives for residential energy-efficient upgrades and clean vehicles, while shortening the window for projects to begin construction and still qualify.  (PoliticoPro Analysis, June 11)

• Senate Republicans are moving toward a consensus on preserving the transferability of clean energy tax credits from the IRA, as Finance Chair Mike Crapo (R-ID) signaled openness to easing the House-passed restrictions and extending the phaseout timelines during a GOP conference briefing this week. (PoliticoPro, June 12)

• The House-passed measure included provisions that would restrict credit transferability, which allows companies to sell their tax credits to a buyer in exchange for cash. (PoliticoPro, June 12)

• “If you are going to have a credit, if it’s not transferable, it’s not of much use,” said Sen. Kevin Cramer (R-ND). (PoliticoPro, June 12)

Trade Talks

• Tariffs on materials such as lumber, steel, and aluminum have presented several challenges for commercial real estate. Impacts have included increased construction costs, the potential for project delays, and heightened uncertainty among investors. (RW, April 4)

• The U.S. and Mexico are approaching a deal to reduce or eliminate President Trump's 50 percent steel tariffs on imports, up to a certain volume. (Reuters, June 10)

• This week, Commerce Sec. Howard Lutnick and senior economic officials from China agreed “in principle” to a framework of a "trade truce" between the world's two largest economies, a sign of further progress. (CNN, June 11)

• Late Wednesday, Trump said the U.S. was "rocking in terms of deals," as it held trade talks with about 15 countries, including Japan and South Korea—but the president also threatened to unilaterally set tariff levels for many other countries in the coming weeks.   (WSJ, June 12)

Looking Ahead

As the White House urges Senate Republicans to make only modest changes to the reconciliation bill, Senate leaders are moving toward issuing final bill text by June 23, followed by a vote-a-rama. (Politico, June 12)