ENERGY-EFFICIENT UPGRADES ARE MORE ACCESSIBLE
SHORT-TERM GAINS, LONG-TERM RATE RISKS
AFFORDABLE HOUSING CREDITS EXPAND
The Big Beautiful Bill will directly impact commercial real estate by making capital more accessible for energy-efficient upgrades. For brokers and their clients, this changes the conversation.
Tucked inside Section 70422 of the Big Beautiful Bill is something powerful: a permanent 12% expansion of the Low Income Housing Tax Credit and a lower bond test threshold. Translation? Over a million new affordable rental units in the next decade. The biggest opportunity here isn’t just in the bricks and mortar. It’s in execution. Developers and property managers will need sharp leasing systems, airtight paperwork, and smooth closings. That’s where companies like mine step in to bridge legislation with reality, and make sure these units don’t just get built, but get leased.
Short-term, this bill is great for investors; longer-term, it’s likely bad for real estate investors. The short-term tax benefits approved in the bill will generate substantial income for both active and passive real estate investors over the next few years. But the significantly increased deficit spending in the bill is likely to put upward pressure on bond yields (interest rates) longer-term, driving down returns on leverageable investments.
Properties with sustainable improvements are:
• Commanding premium valuations • Securing better financing terms • Achieving stronger tenant demand Investors recognize that lower operating costs translate into higher NOI, while lenders view these assets as lower risk. As a result, owners who act quickly will see both immediate financial upside and long-term competitive positioning.
SOMETHING POWERFUL: A PERMANENT 12% EXPANSION OF THE LOW INCOME HOUSING TAX CREDIT.
LONGER-TERM, IT’S LIKELY BAD FOR REAL ESTATE INVESTORS.
LOWER OPERATING COSTS TRANSLATE INTO HIGHER NOI.
Dan Lewkowitcz Senior Director Encore Real Estate Investment Services Connect with Dan
Mendy Minkowitz Leasing Consultant Hoffman Brothers Realty Connect with Mendy
J Scott Co-Founder Bar Down Investments Connect with J
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