Tag: Capital and Credit

Coalition Pushes Back on FSOC Nonbank Rules Amid Broader Scrutiny of Financial Oversight

Posted on by abigail_grenadier

The Real Estate Roundtable (RER) and a coalition of national trade associations submitted a joint letter on July 14 to Treasury Secretary Scott Bessent, urging the Financial Stability Oversight Council (FSOC) to rescind its 2023 interpretive guidance and reinstate the Council’s 2019 framework for designating nonbank financial companies.

Coalition Letter

  • The 2023 guidance significantly alters FSOC’s designation process, removing procedural safeguards such as cost-benefit analysis and coordination with a company’s primary regulator. (Letter, July 14)
  • The letter warns that FSOC’s shift away from an activities-based approach creates regulatory uncertainty that could chill capital formation, disrupt access to credit, and hinder innovation in risk management. (Pensions & Investments, July 14)
  • The letter signed by RER, the U.S. Chamber of Commerce, Mortgage Bankers Association, American Investment Council, and others, calls on FSOC to withdraw the 2023 guidance, refocus on systemic activities rather than specific firms, and restore due process protections.

Congressional Hearing

  • Lawmakers expressed concern that the 2023 guidance could revive pre-Dodd-Frank regulatory “blind spots” by enabling opaque designations that sidestep traditional supervisory processes. (PoliticoPro, July 16)
  • Committee Vice Chair Rep. Bill Huizenga (R-MI), also raised concerns, and introduced the prospect of curbing FSOC’s authority (American Banker, July 15)
  • At the hearing, lawmakers critically examined the expansive regulatory bureaucracy created by the law and its structural impact on CRE lending. Federal Reserve and FDIC data show that small and midsize banks (assets under $250B) now account for a majority of all CRE lending, particularly construction and land development loans. Exempted from some of Dodd-Frank’s most burdensome provisions, smaller lenders are stepping in to fill the gap left by larger banks scaling back amid accelerating debt maturities. (GlobeSt. July 16)
  • Some members also highlighted the need to restore bipartisan consensus around the Council’s systemic risk role, especially as market complexity grows.

The Fed

The Federal Reserve in Washington, DC
  • The Fed’s independence was also in the spotlight this week as President Trump floated—but ultimately backed off removing Fed Chair Jerome Powell, citing frustration over interest rate policy and the central bank’s headquarters renovation. (PoliticoPro, July 17)
  • Tensions over the Fed’s future rattled markets, with bond yields spiking and CRE leaders cautioning against politicizing monetary policy. (GlobeSt., July 17 | Axios, July 17)
  • JPMorgan Chase CEO Jamie Dimon warned that “playing around with the Fed” could carry serious consequences for U.S. financial credibility. (WSJ, July 15)

The Fed’s next policy meeting is scheduled for July 29–30. Policymakers are expected to keep interest rates steady at 4.25% to 4.5%—marking the fifth consecutive meeting without a change since the central bank paused rate cuts in December. (Reuters, July 17 | Axios, July 18)

Fed Chair Powell Testifies on Monetary Policy Outlook, Proposal to Ease Bank Capital Requirements, and Basel III Endgame

Posted on by abigail_grenadier

In a busy week for Fed policy, Federal Reserve Chair Jerome Powell delivered his semiannual monetary policy report to Congress, testifying at a pair of House and Senate hearings on the state of the U.S. economy. Powell also fielded questions from policymakers on a new proposal unveiled this week to ease capital requirements for large banks and the state of Basel III Endgame.

Policy Outlook

  • In testimony before the House Financial Services Committee and Senate Banking, Housing, and Urban Affairs Committee, Chair Powell defended the Fed’s decision to hold interest rates steady last week. (Roundtable Weekly, June 20)

  • With consumer confidence weakening and inflation risks from tariffs and Middle East tensions rising, the Fed faces competing pressures that could challenge price stability.
  • On Capitol Hill this week, Chair Powell reiterated the Fed’s wait-and-see approach, saying, “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.” (Federal Reserve, June 24)
  • Two Trump-appointed Fed officials, Vice Chair for Supervision Michelle Bowman and board member Christopher Waller, signaled support for cutting interest rates as soon as July. Their public stance diverges from the majority of Fed officials, seven of whom do not anticipate any rate cuts this year, highlighting an unusual divergence among Fed leadership. (Axios, June 24)

The Fed’s New Proposal

  • On Wednesday, the Fed advanced a proposal to reform the enhanced supplementary leverage ratio (SLR) in a 5-2 vote, which would reduce capital requirements for relatively low-risk assets, like U.S. Treasury markets. (Reuters, June 25)
  • The SLR was originally designed as a backstop to risk-based capital requirements to ensure that large banks hold a sufficient amount of capital, regardless of the riskiness of those assets. (ABA Journal, June 23)
  • Sen. Tim Scott (R-SC), Chair of the Senate Banking, Housing, and Urban Affairs Committee, noted at the Senate hearing with Chair Powell, the backstop has “too often” acted as a binding requirement for U.S. banks, which could harm the effective functioning of U.S. Treasury markets during periods of distress and discourage banks from engaging in low-risk activity.
  • The proposed modifications are intended to make it less expensive for large banks to hold less risky assets, so that more capital is freed up for banks to invest in Treasuries and other low-risk markets.

  • Vice Chair Bowman touted the proposal as an “important first step in balancing the stability of the financial system and Treasury market resilience, while preserving safety and soundness and restoring the SLR as a backstop.” (PoliticoPro, June 25)

  • Chair Powell similarly highlighted the benefits of the reform proposal, noting that “it will not in any way diminish the safety and soundness of the financial system.” (Senate Hearing, June 25)

  • The Fed published a notice of proposed rulemaking on the proposal, opening it for public comment.
  • RER plans to comment on the proposal and its implications for the commercial real estate industry.  The organization’s Real Estate Capital Policy Advisory Committee (RECPAC) is working on a response to the notice of proposed rulemaking and welcomes member input.

Basel III Endgame

The Federal Reserve in Washington, DC
  • Chair Powell was also asked about the Fed’s plans for Basel III Endgame, which stalled after the proposal was met with widespread criticism from policymakers and industry associations last year.

  • Chair Powell told policymakers that the Fed would take a “fresh start” at Basel III in light of the feedback it received. He agreed that the original proposal’s capital requirements were excessive and “very significantly exceeded” the Basel requirements, suggesting that it will be further revised. (American Banker, June 25)

  • RER strongly opposed the original Basel III proposal, pointing out the significant economic costs it would incur without clear benefits to the economy, recommending that it be withdrawn and only reissued after further study.
  • Bowman, the newly appointed Vice Chair for Supervision at the Federal Reserve, is actively involved in reviewing and potentially reforming the Basel III endgame proposal to make it more capital-neutral for U.S. banks.
  • Tighter capital requirements and higher costs would come at a time when the commercial real estate industry is facing a wave of maturing loans, undermining the ability of owners and developers to restructure debt and fill the equity gap. So it is important for the Agencies to recalibrate their proposal accordingly to avert increased borrowing costs and reduced credit capacity for real estate and the overall economy.

Chair Powell’s term at the Fed isn’t up until May 2026—but reports indicate that President Trump is considering announcing his pick to succeed Powell far in advance, potentially a candidate who is more amenable to lowering interest rates on an accelerated timeline.

Industry Leaders Discuss Economic Outlook, Policy Priorities, and Geopolitical Challenges at Annual Meeting

Posted on by abigail_grenadier

The Real Estate Roundtable’s (RER) 2025 Annual Meeting this week included discussions with public officials and industry leaders on a range of issues affecting commercial real estate, including market conditions, tax policy, the House’s recent passage of the One Big Beautiful Bill Act, tariffs and trade, affordable housing solutions, energy policy, and evolving security threats.

Roundtable Leadership

  • RER Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone) opened the meeting by thanking members for their consistent engagement and highlighting the significance of RER’s collaborative efforts in navigating a rapidly evolving policy landscape. (May 2025 Policy Priorities and Executive Summary)
  • During the meeting, RER members approved the nominees for its FY26 board of directors and policy advisory committee officers, which were announced by RER Nominating Committee Chair Geordy Johnson (CEO, The Johnson Group).
  • Addressing the membership, RER President and CEO Jeffrey DeBoer emphasized RER’s ongoing commitment to enhancing member involvement through RER’s policy advisory committees and underscored the value of strategic partnerships with other national real estate organizations for proactive policy advocacy. (Meeting Agenda)

Meeting Speakers

  • The Honorable Kevin Hassett (Director, National Economic Council) presented the administration’s economic agenda, focusing on housing initiatives, factory expensing, and the outlook for growth.
  • (L-R): Hessam Nadji (President and CEO, Marcus & Millichap), Martha Gimble (Executive Director, The Budget Lab at Yale University), and Jonathan Pollack (President, Starwood Capital Group) provided macroeconomic insights, reviewed current and future CRE market trends, and spoke about challenges amidst tariff-induced uncertainty. (Hessam Nadji Presentation | Martha Gimble Presentation)
  • Anna Palmer (Founder & CEO of Punchbowl News) offered her perspective on legislative developments and negotiations, and the rise of influential figures within both political parties.

Policy Advisory Committee Meetings

  • Each of RER’s policy advisory committees met this week in conjunction with the Annual Meeting for in-depth policy discussions. The committees hosted several congressional staff and regulatory officials.

Sustainability Policy Advisory Committee (SPAC) Meeting

  • SPAC Chair Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.), Co-Vice Chairs Ben Myers (Vice President, Sustainability, BXP) and Katie Rothenberg (Vice President, ESG, AvalonBay Communities, Inc.) led discussions on EPA’s ENERGY STAR program, grid reliability, clean energy procurement, and nuclear energy deployment. (Agenda & Speakers)

Tax Policy Advisory Committee (TPAC)

  • TPAC Chair Josh Parker (Chairman & CEO, Ancora Group Capital), Vice Chair David Friedline (Partner, Deloitte Tax LLP), and the Committee discussed the broad range of tax proposals affecting real estate that are working their way through Congress in the budget reconciliation bill. Panelists included senior staff from the offices of the House Speaker, Ways and Means Committee, Senator Tim Scott (R-SC), and Senator Todd Young (R-IN), as well as the Treasury Department. In addition, tax experts from Baker McKenzie, Sullivan & Cromwell, and Brownstein led or moderated discussions concerning potential new taxes on foreign investors, regulatory initiatives, and Opportunity Zones.  (Agenda & Speakers)

Sustainability Policy Advisory Committee (SPAC)

  • SPAC Chair Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.) and Vice Chairs Ben Myers (Vice President, Sustainability, BXP) and Katie Rothenberg (VP, ESG, AvalonBay Communities, Inc.) led discussions on (Agenda & Speakers)

Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee Meeting

  • D. Michael Van Konynenburg (President, Eastdil Secured) provided an overview of conditions in real estate credit and capital markets.
  • Following a national policy update from RER’S Ryan McCormick (SVP & Counsel, RER) and Chip Rodgers (SVP, RER), Research Committee Chair Spencer Levy (Global Chief Client Officer & Senior Economic Advisor, CBRE) and Darin Mellot (Vice President of Capital Markets Research, CBRE) led a discussion on the evolving post Liberation Day impact of tariffs on commercial real estate markets. 
  • Robert Rubano (Executive Vice Chairman, Head of Equity, Debt, & Structured Finance, Cushman & Wakefield) moderated a capital market roundtable with David Bouton (Co-Head of U.S. CMBS, Citigroup), Jack Gay (Senior Managing Director, Global Head of Real Estate Debt, Nuveen Real Estate), Kathryn Ogden, (Head U.S. Corporate Banking and Global Head, Real Estate Capital Partners (RECP), RBC Capital Markets), and Matt Salem (Partner, Head of RE Credit, KKR). (Agenda & Speakers)

Homeland Security Task Force (HSTF) Meeting

  • HSTF Chair Amanda S. Mason (Executive Director, Global Intelligence, Related Companies) facilitated a number of discussions on the current threat picture.  These 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. These discussions included updates on the role of the cartels in violent crime, the deaths of American citizens from synthetic opioids, and the facilitation of nearly three million illegal migrant arrivals in 2024, putting U.S. communities at risk. Also addressed were the range of cyber and intelligence threats from China, targeting our critical infrastructure. (Agenda & Speakers)

RER’s 2025 Annual Report will be distributed in July. Next on RER’s FY 2025 meeting calendar is the Fall Meeting, which will take place on October 27-28 (restricted to Roundtable-level members only). 

Industry Leaders Convene for 2025 State of the Industry Meeting

Posted on by Trey Jackson

This week, The Real Estate Roundtable’s (RER) State of the Industry meeting brought together policymakers, industry leaders, and experts to discuss key policy issues shaping debates in Washington and impacting the economy and commercial real estate industry.

2025 State of the Industry Meeting

  • Roundtable Chair Kathleen McCarthy (Global Co-Head, Blackstone Real Estate) opened the meeting by welcoming attendees, setting the stage for discussions on industry priorities and advocacy opportunities, and highlighting key member priorities for the year ahead.
  • RER President & CEO Jeffrey DeBoer highlighted the organization’s unique strengths in policy advocacy, which is known for its trusted, fact-based, and data-driven approach. He also acknowledged members for participating in the annual policy issues survey, which revealed widespread concern about tariffs and strong support for priorities like tax reform, housing incentives, reducing regulatory barriers, energy infrastructure, insurance, and cybersecurity resiliency.

Meeting Speakers

  • Geopolitical expert John Sitilides (Principal, Trilogy Advisors LLC; National Security Senior Fellow, Foreign Policy Research Institute) gave a presentation on “Washington & the World: The New Geopolitics of Great Power Competition” and discussed the current geopolitical dynamics and vulnerabilities affecting global commerce and energy.
  • Rep. Darin LaHood (R-IL) (Member, House Committees on Ways and Means; and  Permanent Select Committee on Intelligence) discussed the U.S.-China economic relationship, extending the Tax Cuts and Jobs Act (TCJA) tax cuts, housing incentives such as the Low-Income Housing Tax Credit (LIHTC), opportunity zones, and property conversions.
  • Rep. Tom Suozzi (D-NY) (Member,House Committee on Ways and Means) stressed the need for bipartisanship to address housing shortages, restore state and local tax (SALT) deductions, advance immigration reform, and revitalize cities.
  • Robert Costa (Chief Election & Campaign Correspondent, CBS News) shared his insight on the current political environment and his experiences with the past and current administrations.
  • Rep. French Hill (R-AR) (Chair of the House Financial Services Committee) spoke to RER’s Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee on his policy priorities for the 119th Congress.

Committee Meetings

Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee

  • During a joint meeting, Research Co-Chair Spencer Levy (Global Chief Client Officer & Senior Economic Advisor, CBRE) and Darin Mellot (CBRE) discussed the current real estate conditions and the outlook for real estate credit and capital markets. Working Group Chair Michael Lascher (Global Head of Real Estate Debt Capital Markets, Blackstone) led a discussion on office financing with David Bouton (Citibank), Michael Maturo (RXR Realty), and James Million (CBRE). Will Skinner (Blackstone Credit and Insurance) presented on the growing adoption of private credit by insurance companies and the interplay with alternative asset managers. (Agenda & Speakers)

Tax Policy Advisory Committee (TPAC)

  • TPAC Chair Joshua M. Parker (Chairman & Chief Executive Officer, Ancora L&G) and TPAC Vice Chair David Friedline (Partner, Deloitte Tax LLP) led panels on the status of tax legislation in Congress and the pending expiration of the TCJA, property conversions, partnerships, pass-throughs, partnership basis-shifting rules, and SECA-limited partners tax dispute. (Agenda & Speakers)

Sustainability Policy Advisory Committee (SPAC)

  • SPAC Vice Chairs Ben Myers (Vice President, Sustainability, BXP) and Katie Rothenberg (Vice President, ESG, Avalon Bay Communities, Inc.) led discussions on public-private partnership opportunities with US-DOE, utilities, refrigerant emissions, and building performance standards. (Agenda & Speakers)

Homeland Security Task Force (HSTF)

  • Co-Chair Amanda S. Mason (Executive Director, Global Intelligence, Related Companies) highlighted the overall mission of the HSTF, and led a series of discussions on areas of concerns for the commercial facilities sector. Bruce Hoffman (Senior Fellow for Counterterrorism and Homeland Security, Council on Foreign Relations) provided an overview of implications of recent terrorist incidents here and abroad, and the evolving terrorism landscape. Trent Frazier (CISA) and Tobi Rosenzweig, (U.S. Department of State) discussed the current geopolitical tensions in Europe and both short-term and long-term risks. Ken Kurz (COPT Defense Properties)and Marcelle Lee (Equinix) led a panel on the evolving landscape of cyber and physical threats. Cathy Lanier (National Football League), Hon. Lucian Niemeyer (Building Cyber Security), and Thomas Warrick (The Future of DHS Project) hosted a roundtable discussion on recent terrorism incidents, and natural catastrophes.(Agenda & Speakers)

Next on RER’s FY 2025 meeting calendar is the Spring Meeting on April 7-8. The Spring Meeting is restricted to Roundtable-level members only. 

Rep. French Hill to Chair Powerful House Financial Services Committee

Posted on by Trey Jackson

Rep. French Hill (R-AR) was selected as the next chair of the powerful House Financial Services Committee, after securing the endorsement of the GOP steering committee in a closely watched race. (Axios, Dec. 12) (PoliticoPro, Dec.13)

Financial Policy Priorities

  • The House Financial Services Committee holds broad jurisdiction over monetary policy, housing, banking, and international finance. (Axios, Dec. 12)
  • As chair, Rep. Hill will play a vital role in shaping financial policy and working with President-elect Trump’s administration on priorities like banking oversight, GSE reform and cryptocurrency regulation.
  • In an interview with CNBC, Rep. Hill said his top priorities as chair are making community and commercial banking more competitive by rolling back rules, removing limits on investing to make it easier for companies to become publicly traded, and overhauling cryptocurrency regulation. (CNBC, Dec. 13) (PoliticoPro, Dec.13)
  • A former banker, Rep. Hill brings a wealth of experience to the role, having served as Financial Services vice chair and leader of the committee’s digital assets subcommittee.
  • Rep. Hill has advocated for several Roundtable priorities, including affordable housing measures, expanding capital formation, GSE reform, reauthorization of the National Flood Insurance Program, and terrorism risk insurance.

Trump Administration Eyes Changes to Financial Regulation

  • President-elect Trump advisers and officials from the newly founded Department of Government Efficiency (DOGE) are exploring ways to consolidate or eliminate major bank regulators, including potentially abolishing the FDIC and transferring deposit insurance to the Treasury Department, according to people familiar with the matter. (WSJ, Dec. 12)
  • Such proposals, which would require congressional approval, mark a dramatic shift in federal oversight, though no major cabinet-level agency or regulatory body like the FDIC has ever been shuttered in Washington’s history. (Reuters, Dec. 13)

Looking Ahead

  • Rep. Hill has proposed initiatives to streamline financial regulations, create a “chief economist” role within the committee, and enhance member communication on financial policy issues. (The Hill, Dec. 12)
  • Rep. Maxine Waters (D-CA) will continue to serve as Ranking Democrat of the committee. (Politico, Dec. 12)
  • Whether the Trump administration’s bold proposals to restructure federal regulators gain traction remains uncertain, but Rep. Hill’s experience and focus on pragmatic policy solutions could provide a steady hand in this transformative period for U.S. financial services.

The House Republican Conference is anticipated to ratify the steering committee’s selection in the coming days.

RECPAC Fall Meeting Spotlights Upcoming Policy Opportunities and Challenges in Real Estate Capital Markets

Posted on by Trey Jackson

The Real Estate Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) convened this week in New York to address market conditions, pressing policy issues, including Basel III Endgame, shifts in capital markets, and the evolving political and regulatory landscape.

Fall RECPAC Meeting

  • RECPAC met Tuesday, under the leadership of RECPAC Co-Chairs Bryan McDonnell (Head of U.S. Debt and Chair of Global Debt, PGIM Real Estate), Rex Rudy (EVP, Head of Commercial Real Estate, US Bank), Miriam Wheeler (Global Head Real Estate Finance, Goldman Sachs Asset Management), and Working Group Chair Michael Lascher (Global Head of Real Estate Debt Capital Markets, Blackstone) to discuss the new political landscape and top policy priorities for 2025.
  • Roundtable Chair Kathleen McCarthy (Global Co-Head, Blackstone Real Estate) kicked off the meeting and welcomed RECPAC members to the meeting, sharing her insights on real estate credit and capital markets. Other discussions included:
  • Overview of Real Estate Capital Markets: Mark Gibson (CEO, JLL Capital Markets, Americas) provided an overview of current economic and real estate market conditions, investment capital flows, interest rate trends, and their impact on financing.
  • Political and Regulatory Landscape: Wayne Berman (Head of Government Affairs, Blackstone) discussed the new political landscape, and its implications for financial services and tax policy, credit, and capital market issues.
  • U.S. Economic Outlook: David Mericle (Chief US Economist, Goldman Sachs) presented his views on the U.S. economic outlook, including growth prospects and recession risks.
  • Global Real Estate Credit Markets Roundtable: Nick Seidenberg (Managing Director, Eastdil) led a discussion on global real estate credit markets, joined by Jeff Krasnoff (CEO, Rialto Capital), Bryan McDonnell (Chair, Global Debt and Agriculture, PGIM), Rex Rudy (EVP, U.S. Bank), Miriam Wheeler (Global Head, Real Estate Financing, Goldman Sachs), and Greg Wolkom (Group Head, Real Estate Syndicated Finance and REIT Finance, Wells Fargo).

Committee on Foreign Investment in the U.S (CFIUS)

  • This week, the U.S. Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS), finalized a previously proposed rule expanding both the types of military installations covered by its regulations governing reviews of real estate transactions and the number of military installations subject to those reviews. (Axios, Nov. 18)
  • Under the proposed rule issued in July, foreign land transactions within a mile of 40 additional military installations and within 100 miles of 19 additional military sites would trigger a CFIUS review. (Roundtable Weekly, July 12)
  • The finalized rule, which impacts transactions entered into on or after December 9, 2024, continues the trend toward reviews of more real estate transactions based on their proximity to a growing list of military installations deemed “sensitive,” and also allows for greater growth by changing the definition of “military installations” that can become subject to these regulations in the future. (Morgan Lewis, Nov. 18)
  • Nearly 60 military installations will be added to an existing list of military installations and approximately 10 existing installations will be extended for CFIUS jurisdiction purposes.
  • During their annual conference this week, CFIUS mentioned that the renewable energy industry has been a particular area of focus triggering jurisdiction over real estate transactions, due to the critical infrastructure component. (The National Law Review, Nov. 20)

Basel III Endgame

Federal Reserve Vice Chair for Supervision Michael Barr
  • Barr, the Fed’s top regulatory official, said the central bank will not be moving ahead with its plan to hike capital requirements for big banks, also known as Basel III Endgame, or move on any proposals to overhaul rules affecting bank liquidity and long-term debt over the next two months. (Politico Pro, Nov. 20)
  • “I expect to work with my new colleagues at the OCC and the FDIC in the coming year on those measures to get their policy input, their perspectives,” Barr said.
  • Earlier this year, RER raised industry concerns about the negative impact of the Basel III proposal in a Jan. 12 letter to the Fed and other agencies. The comments outlined how the proposal would decrease real estate credit availability, increase borrowing costs for commercial and multifamily real estate properties, and negatively impact the U.S. economy, concluding with a call to federal regulators to withdraw their proposed rulemaking. (Roundtable Weekly, Sept. 19)
  • New regulators are expected to lead the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB) when President-elect Trump takes office in January 2025.

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) will continue to engage with policymakers on any further changes to the Basel III Endgame proposal and other federal policy issues impacting credit capacity and capital formation.

CRE Leaders Gather to Discuss Elections, Economy, Housing and More

Posted on by Trey Jackson
Roundtable Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone)

This week’s Fall Roundtable meeting came at a pivotal time for commercial real estate, as key policy issues take center stage in Washington. Discussions focused on national policies impacting the industry, including the implications of the recent elections, challenges in capital and credit markets, expiration of the 2017 tax bill, and the federal government’s role in supporting housing supply and regulating energy usage. (Bisnow, Nov. 11)

The meeting also covered topics such as return-to-office trends, office-to-residential conversions, and liquidity concerns. (The Roundtable’s  Fall 2024 Policy Priorities and Executive Summary)

Speakers & Policy Issues

Roundtable members engaged in policy issue discussions with the following guests:

  • Reince Priebus, former White House Chief of Staff (President Trump) and the longest-serving chairman of the Republican National Committee in modern history, gave his perspective on the recent elections, dynamics on Capitol Hill, and potential focus of the new administration in 2025.
(L-R) Roundtable President & CEO Jeffrey DeBoer & Reince Preibus
  • Sen. Tim Scott (R-SC) is the current ranking member and presumed next chair of the influential Senate Banking, Housing, and Urban Affairs Committee and a senior member of the Senate Finance Committee. Sen. Scott advocated for expanding business and homeownership, enhancing financial literacy, and improving affordable housing by reducing regulations and advancing zoning reforms to foster economic growth and equity in communities.
Sen. Tim Scott (R-SC)
  • The Honorable Tom Barkin (President & Chief Executive Officer, Federal Reserve Bank of Richmond), provided a candid assessment of economic recovery and the challenges ahead. He also questioned the fundamental demand for office space as companies reassess their needs in a post-pandemic environment. (Reuters, Nov. 14)
(L-R) RER Board Secretary Jodie McLean (CEO, EDENS) and Tom Barkin
  • Rep. Richard Neal (D-MA) (Ranking Member, House Committee on Ways and Means), addressed the significance and major takeaways of the recent election and the outlook for tax and trade policy going forward. He discussed affordable housing incentives, such as the Low Income Housing Tax Credit (LIHTC) and the bipartisan Revitalizing Downtowns and Main Streets Act (H.R.9002), and extending tax provisions like Section 199A, capital gains. (RER’s Tax Policy Priorities)
Rep. Richard Neal (D-MA)

Next on The Roundtable’s meeting calendar is the all-member State of the Industry (SOI) Meeting, which will include policy advisory committee meetings, on January 22-23, 2025 in Washington, DC. 

The Roundtable Congratulates President-Elect Trump and Looks Forward to Jointly Addressing Key Policy Priorities    

Posted on by Trey Jackson

The 2024 election cycle concluded this week, with Donald J. Trump elected as President of the United States. The Roundtable congratulated the President-elect and the newly elected members of Congress. As the nation transitions to new leadership, The Roundtable is looking forward to collaborating with the new administration and Congress on policies critical to the economy, jobs, housing, and the health of real estate markets.

Election Results

  • At the time the election was called, President-elect Trump had received 295 electoral votes compared to Vice President Harris’ 226. Trump also took the lead in the popular vote, with 72,773,748 votes compared to Harris’ 68,123,125. (The New York Times, Nov. 7)
  • On the Congressional front, the Republican party took control of the Senate with 53 seats. Neither party has reached the necessary 218 seats to secure a majority in the House, but Republicans are in the lead with 211 seats. (AP News, Nov. 7)

Focused Hard Work Ahead Regarding Tax Legislation, Deregulation, and Housing Policy Shifts

  • Donald Trump’s victory in the presidential election, Republicans’ victory in the Senate, and the likely Republican House majority dramatically reshuffle the dynamics for policy debates on key issues related to real estate. The Roundtable’s initial thoughts on how the election results impact our priorities, strategy and outlook include:
  • Tax Policy Extensions and New Proposals: The incoming administration is expected to extend 2017 tax cuts, restore bonus depreciation, and support Opportunity Zone incentives. New pro-growth tax measures could also gain traction.
  • Deregulation in Energy and Financial Services: Deregulatory shifts may impact climate and financial services regulations, prioritizing oil and gas development, easing bank regulatory and SEC, HUD, and FHFA oversight. Federal rollbacks could increase regulatory challenges across states as they implement varying climate standards. Ensuring grid reliability could become an even more prominent issue in the energy policy arena.
  • Focus on Credit Markets and Housing: Anticipated policy objectives include reducing mortgage rates, revisiting Fannie Mae and Freddie Mac conservatorship, and reducing housing costs by cutting regulatory barriers. Potential Treasury appointments reflect a push toward expanded credit access and reduced regulatory burden.

Roundtable Statement

Earlier this week, Roundtable President and CEO Jeffrey D. DeBoer issued a statement congratulating President-elect Trump and pledging to work with the new administration and Congress on pressing commercial real estate issues.

“We look forward to working with the President-elect and his team to advance policies that will expand the nation’s economy, boost job creation, increase the supply and affordability of housing, and address the many important national policy issues related to constructing, financing and maintaining modern real estate, work, living, and recreational buildings.

Strong real estate markets provide millions of American jobs, support strong local budgets, and help millions of people plan for retirement through their pension and retirement savings investments in real estate.

The strength of real estate and the benefits the industry provides to all Americans, depends on fair, consistent, and forward-looking policies at all levels of government.

Real estate public policies are nonpartisan. The Real Estate Roundtable supports policies based on objective economic principles that are responsive to changing economic cycles and sensitive to societal demands.

Tax and financial regulatory reform, housing investment, immigration issues, energy policy, and physical and cyber security each present opportunities to advance the economy and stability of U.S. real estate markets.

We are excited to offer our support, expertise and assistance to President-elect Trump and the new Congress. We are honored to contribute meaningfully to the strength and prosperity of our nation,” said DeBoer.

Zoom Town Hall Recap: Election Insights and CRE Policy Priorities

Posted on by Trey Jackson

Last week, The Roundtable hosted a Zoom Town Hall to discuss the upcoming election, along with policy priorities for the lame-duck session and the upcoming year. (Watch Town Hall)

Town Hall

  • The Roundtable’s Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone) kicked off the meeting thanking and recognizing Roundtable Immediate Past Chair John Fish (Chairman and CEO, Suffolk) and board members for their stewardship and support.
  • The Town Hall featured Jonathan Martin, Politics Bureau Chief and Senior Political Columnist for POLITICO. He shared his expert insights on the political landscape, highlighting the most significant races and trends leading up to the election.

Election Forecast

  • Senate flip likely: Martin emphasized the high likelihood of a Senate flip.
  • Split government impact: If Vice President Kamala Harris wins the presidential election, the Senate and House could be controlled by opposing parties. Conversely, a Trump victory might ensure Republican control of both chambers.
  • The policy angle: Regardless of the election outcome, key commercial real estate issues will remain central to legislative discussions.
  • “We are preparing for potential action during the lame-duck session, but definitely positioning ourselves for what may come next year,” said Roundtable President & CEO Jeffrey DeBoer. “No matter the election outcome, core issues for the real estate industry—tax policy, energy, housing affordability and liquidity—will be front and center.”

Roundtable Policy Priorities: What’s Next?

  • Tax policy: The Roundtable is preparing for potential tax legislation in the lame-duck session, although it likely will be delayed until next year’s debate regarding the expiration of the 2017 tax cuts. Priorities include:
    • Capital formation and capital gains: Preserving key elements of the tax code (e.g., capital gains preference, like-kind exchanges) that encourage productive real estate investment, risk-taking, and growth.
    • Strong partnership, pass–through, and entity choice rules. Extending tax provisions like section 199A that allow pass-through businesses to compete on a level playing field with public corporations.  
    • Foreign investment and competitiveness: Ensuring the U.S. remains competitive by maintaining tax rules and regulations that attract foreign capital to infrastructure and real estate.
    • Affordable housing incentives: RER advocacy will continue for tax incentives tied to affordable housing, energy efficiency, Opportunity Zones, and commercial-to-residential conversions.

  • Energy & climate: Expect policy movement regardless of election outcomes. Key focus areas include:
    • Mandates on buildings: state and local governments are increasingly adopting Building Performance Standard (BPS) laws that impose mandates on buildings to limit emissions and energy use, setting new requirements for energy and climate performance in real estate.
      • RER recently published a BPS policy guidebook reflecting our ongoing commitment to addressing climate change while ensuring the economic sustainability of real estate investments and the communities they support. (Roundtable Weekly, Oct. 11)
    • Disclosure requirements: Future climate risk disclosures for public companies remain on the radar, along with possible passage of the Energy Permitting Reform Act of 2024 (S. 4753), legislation aimed at streamlining and modernizing the permitting process for energy infrastructure projects.

  • Capital & credit: RER continues to monitor the looming wave of maturing commercial real estate loans, Basel III Endgame proposals, and SEC rules affecting capital formation.
    • Insurance rate spike: The real estate industry is dealing with a historic spike in insurance rates, exacerbated by recent hurricanes. RER continues to work constructively with policymakers and stakeholders to address commercial insurance gaps and rising costs.
    • Basel III Endgame: With regulators at an apparent impasse on revisions to the original Basel III Endgame proposal, we do not expect any further action on the revised proposal before the elections.

RER’s Real Estate Capital Policy Advisory Committee (RECPAC) will be meeting in person on November 19, 2024 in New York to discuss the outcome of the election on the political landscape, the economic outlook, capital and debt markets and much more.

Treasury Issues Proposed Rule to Expand CFIUS Coverage of Real Estate Transactions Near Military Installations

Posted on by Trey Jackson

This week, the U.S. Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS), issued a Notice of Proposed Rulemaking (NPRM) that would expand CFIUS’s jurisdiction over certain transactions by foreign persons involving real estate in the United States. (Treasury Press Release, July 8)

Proposed Rule

  • As chair of the Committee on Foreign Investment in the United States (CFIUS), the Treasury has the authority to review certain real estate transactions near specified military installations and to act in appropriate circumstances.
  • Under the new proposal, foreign land transactions within a mile of 40 additional military installations and within 100 miles of 19 additional military sites would trigger a CFIUS review.
  • The proposed rule would add over 50 military installations across 30 states to the existing list of installations for which CFIUS has jurisdiction.
  • The national security review panel has the power to block transactions entirely or impose restrictions on foreign transactions.
  • The U.S. Department of Defense (DOD), a member of CFIUS, continuously assesses its military installations and the geographic scope established under the CFIUS regulations to ensure appropriate application in light of national security considerations.
  • This proposed rule is the result of a recent comprehensive assessment conducted by the DOD regarding its military installations.

Other Key Changes

  • This latest update would vastly expand the reach of CFIUS’s real estate jurisdiction while maintaining its sharp focus on national security.
  • The proposed rule would also make other key changes:
  • Expand CFIUS’s jurisdiction over real estate transactions between 1 mile and 100 miles around eight military installations already listed in the regulations; and
  • Update the names or locations of 21 military installations already listed in the regulations to better assist the public in identifying the relevant sites.

Implications and Next Steps

  • The rulemaking comes amid growing bipartisan concern in Congress over the purchase of U.S. agricultural land and other property by China and other foreign adversaries.
  • Several GOP-led states have considered or enacted new restrictions on foreign ownership of land, targeting investors with ties to China and other countries. (PoliticoPro, July 8)
  • In response to the proposed rule, written comments will be accepted for 30 days following the NPRM’s publication in the Federal Register.

The Real Estate Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) will continue to monitor the proposed rulemaking and plans to submit comments.