Today, The Real Estate Roundtable (RER) joined a broad coalition of manufacturing, consumer technology, retail, and real estate allies in a letter to Congress urging continued federal support for the overwhelmingly bipartisan ENERGY STAR program. (Letter, June 6)

Cross-Sector Advocacy Push

• The coalition letter emphasized that ENERGY STAR has delivered hundreds of billions of dollars in energy savings since its inception—approximately $40 billion in annual savings alone for American consumers, families, and businesses. 

• More than 30 leading organizations signed today’s letter including RER, many real estate partners, and manufacturing, consumer products, and retail groups. They include the Air-Conditioning, Heating and Refrigeration Institute (AHRI); American Chemistry Council (ACC); Consumer Technology Association (CTA); National Association of Manufacturers (NAM); National Retail Federation (NRF); National Electrical Manufacturers Association (NEMA); and the Retail Industry Leaders Association (RILA).

• The multi-industry letter also highlights ENERGY STAR’s brand as a highly successful, non-regulatory, and bipartisan public-private partnership that promotes energy efficiency and consumer trust across industries that drive the U.S. economy.

• The industry letter stated that ENERGY STAR is fundamental to an "all of the above" energy strategy, crucial for accommodating growing electricity demands from artificial intelligence, crypto assets, and advanced manufacturing. (Letter, June 6)

Real Estate Sector Support

• The real estate industry previously sent letters to Congress, the Department of Energy (DOE), and the Environmental Protection Agency (EPA) explaining the importance of ENERGY STAR focusing on U.S. commercial and residential buildings. (Roundtable Weekly, May 23) (Letters: May 23, May 14, and April 4)

• In response to indications that the Trump Administration might eliminate ENERGY STAR as federally managed, RER President and CEO Jeffrey DeBoer commented the program “is integral to the U.S. real estate industry. Its software is embedded in the fabric of how profitable, energy efficient buildings are run and managed in all markets across the nation.”

• “ENERGY STAR provides the key tools for families and business to save money on their utility bills,” DeBoer continued. “Owners and developers rely on ENERGY STAR to attract investment capital so U.S. building infrastructure can compete with the best real estate assets in the world.” (Roundtable Weekly, May 9)

Press Coverage

• A recent op-ed in The Hill made the economic case for ENERGY STAR, arguing that its elimination would raise operational costs, disrupt performance standards, and weaken a public-private partnership that delivers measurable benefits to businesses, consumers, and the environment. (The Hill, May 31)

• A former Republican EPA Administrator who helped create ENERGY STAR in the 1990s commented that the energy efficiency and waste avoidance goals of the program “should make a DOGE bro swoon.” (Washington Post, May 14). 

RER will continue to advocate with aligned groups in the real estate sector and across industry lines to preserve ENERGY STAR as a voluntary, federal public-private partnership.

With Congress back in session this week, Senate Republicans got to work on ironing out the details of their version of the budget reconciliation package. Members of the upper chamber are signaling a number of changes to the House’s bill, which could complicate Speaker Mike Johnson’s (R-LA) fragile coalition.

State of Play

• Majority Leader John Thune (R-SD) met with President Trump at the White House on Monday, initiating a series of calls from Trump to individual GOP senators to discuss their concerns for the House-passed reconciliation package. (Punchbowl News, June 4)

• The Senate GOP caucus met Wednesday afternoon to speak about the portions of the legislation that had already been or are on the cusp of being released. Among the most contentious issues: Medicaid, the state and local tax (SALT) deduction cap, and Inflation Reduction Act (IRA) energy tax credits. (Politico, June 3)

• Finance Committee member Sen. Thom Tillis (R-NC) is one of several GOP lawmakers who has voiced interest in adjusting the phaseouts of certain IRA energy tax credits with a more “targeted” approach to protect U.S. businesses—including real estate—that are already invested in existing projects. (NBC News, June 6)

• Fiscal hawks Rand Paul (R-KY) and Ron Johnson (R-WI) have already expressed opposition to the bill because it doesn’t contain enough spending cuts or do enough to address budget deficits. (WSJ, June 4)

Potential SALT & Business Tax Changes

• On Wednesday, Senate Finance Committee members met with President Trump to discuss possible changes to the tax section of the bill. During the meeting, Senators briefly touched on their intention to try to revise the House’s proposal to raise the cap on SALT deductions for individuals to $40,000. 

• Speaking to reporters outside the White House, Majority Leader Thune said he and his colleagues “start from a position that there really isn’t a single Republican senator who cares much about the SALT issue.” Thune went on to concede that he and other GOP senators "understand that it’s about 51 and 218, so we will work with our House counterparts and with the White House.”(Politico, June 4)

• “We are sensitive to the fact that, you know, the speaker has pretty narrow margins, and there's only so much that he can do to keep his coalition together. At the same time it wouldn't surprise people that the Senate would like to improve on their handiwork,” Sen. Todd Young (R-IN) told reporters. (Politico, June 4)

• The bulk of tax writers’ Wednesday meeting with the president, however, focused on a different issue: Trump is not sold on making several proposed business tax breaks permanent, including 100 percent bonus depreciation for equipment, machinery, and nonresidential property improvements.

• Trump told Sen. Johnson and other members of the Finance Committee that it could be better for economic growth to make the provisions temporary, providing a more immediate incentive for businesses to take advantage of them. (Politico, June 5)

Section 899

• Another area of debate that has emerged among Senate tax writers concerns Section 899, which would impose steep retaliatory taxes—up to 50 percent—on foreign taxpayers from countries that discriminate against U.S. businesses through their own tax regimes. (Roundtable Weekly, May 30)

• If enacted in its current form, in addition to taxing foreign companies, Section 899 could raise tax rates on passive foreign investment in the U.S. (CNBC, June 2; Kirkland and Ellis, June 5)

• Congress’ Joint Committee on Taxation has asserted that the “retaliatory tax” could in effect lead to a decline in foreign demand for U.S. assets and lower U.S. tax revenue (Bloomberg, May 30) 

• In the short term, however, the provision is projected to raise significant revenue—$120 billion over the first five years. (Politico, June 4) 

• Senators are reviewing potential changes and modifications to section 899 to address concerns. “There’s a lot of nervousness about how it could be used,” Sen. James Lankford (R-OK) told reporters, indicating that Republicans “want to make sure there’s not some unintended consequences.” (Semafor, June 4)

Implications for CRE

• Senate tax writers, thus far, have not signaled significant interest in changes to priority issues like the deductibility of property taxes (business SALT) or carried interest.

• The Senate is considering potential Roundtable-backed improvements to the House-passed Opportunity Zone provisions, as well as reforms to the low-income housing tax credit, the new markets tax credit, and a longer extension for provisions related to bonus depreciation and business interest deductibility.

• An RER working group is analyzing Section 899’s impact on real estate and working to ensure policymakers understand its potential unintended consequences, which could include deterring foreign investment in large-scale, capital-intensive real estate and infrastructure projects in the U.S. (Roundtable Weekly, May 30)

Looking Ahead

While a few Senate committees have already released their sections of the bill, the Senate Finance Committee is expected to share their draft of the tax portion next week. RER will continue to update its members on key changes and their impacts on the commercial real estate industry during what will surely be an eventful month in Washington as the Senate works toward passing their reconciliation package by July 4.

As the Federal Reserve’s latest Beige Book reveals, the U.S. economy is continuing to adjust to shifting conditions, with commercial real estate leaders focusing on strategies to navigate ongoing uncertainty and emerging opportunities. (The Fed, June 4)

Beige Book Findings

• The Beige Book published this week, reported that “all Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions.”

• The report, based on surveys and interviews conducted through May 23, noted that the overall outlook remains “slightly pessimistic and uncertain,” unchanged from the prior report. (Bloomberg, June 4)

• Nine of the 12 Federal Reserve districts reported either a contraction in economic activity or no change in growth; only a few districts, including Richmond, Atlanta, and Chicago, experienced modest growth. (Market Watch, June 4)

• Commercial construction and real estate activity also declined overall, with the office sector continuing to lag. In San Francisco, construction activity remained subdued due to uncertainty over trade policy and rising material costs. (The Fed, June 4)

• Tariffs were mentioned 122 times in the report, compared to 107 times in April, reflecting rising concerns about inflationary pressures. (CNBC, June 4)

• In Boston, the Fed noted deals took longer to close, and “foreign investors grew generally skittish about investing in the United States.”

Economic Conditions & CRE

• This week, during Lument’s webcast, "Turning Point: Multifamily Strategies Amidst Policy and Economic Shifts," RER’s President & CEO Jeffrey DeBoer discussed how federal policies, including tariffs, liquidity, and the ongoing tax debates in Washington, are reshaping investor strategies.

• DeBoer also emphasized that uncertainty and volatility are hindering investment decisions, mirroring the Beige Book’s findings of delayed business spending.

• RER’s Q2 Sentiment Survey reflected similar caution, with the index falling to 54 as executives cited policy uncertainty, rising costs, and muted investor confidence—echoing the Beige Book’s insights on slowing activity and elevated economic risk. (Roundtable Weekly, May 23)

• On Wednesday, the administration doubled tariffs on steel and aluminum imports from 25% to 50%, adding further pressure on construction costs and heightening unpredictability. (BisNow, June 4)

• In the May edition of ULI’s Economist Snapshot, RER’s Senior Vice President Clifton E. “Chip” Rodgers Jr. weighed in on how rising tariffs and trade tensions are impacting U.S. commercial real estate—from delayed development timelines to increasing construction costs and reduced foreign investment. (ULI, May 13)

What’s Next

The Fed will consider the Beige Book findings at its June 17–18 meeting as it navigates a delicate balancing act between persistent inflation risks and ongoing trade tensions.