As we close out 2025, NAIOP’s Senior Vice President for Government Affairs Aquiles Suarez joined the organization’s Inside CRE Podcast to offer his sharp perspective on the intersection of policy, politics and commercial real estate.
Suarez shared why this year will be remembered as one of the most pivotal for the commercial real estate industry in decades, with sweeping legislative victories that will shape the market for years to come.
For years, NAIOP and its members fought annual battles to extend critical tax provisions. This year, that cycle ended. In the “One Big Beautiful Bill” passed earlier this year, nearly every major real estate priority was secured – and made permanent.
“We had probably the biggest victory in more than two decades for the commercial real estate industry,” said Suarez. Bonus depreciation was restored to 100% and made permanent; the 20% pass-through deduction for LLCs was preserved; and tax rates for capital gains and ordinary income were kept at the same level. This kind of stability offers predictability for investors and developers, a critical factor in long-term planning, said Suarez.
Allowing provisions to expire has historically been an easy way for lawmakers to raise revenue without explicitly taking a vote. “Now, a party, whether it be Republican or Democrat, would have to proactively get rid of these provisions and raise taxes,” Suarez explained, “and that’s always politically more difficult.” Permanent tax policy gives the commercial real estate industry greater certainty going forward.
With midterm elections in 2026, there’s talk of another reconciliation bill aimed at delivering fresh tax breaks. However, deficit concerns among some Republican lawmakers may limit the scope of any new incentives.
One legislative initiative that has bipartisan support is creating tax incentives for the adaptive reuse of underutilized commercial structures. While it didn’t make it into this year’s reconciliation bill due to cost concerns, NAIOP plans to continue advocating for inclusion of the idea in future legislation. For many older buildings, post-pandemic high vacancy rates are not going away. Adaptive reuse could be an additional tool for increasing the supply of housing and urban revitalization.
The midterm election also brings complications to legislative efforts. Tight margins in the House mean Democrats are unlikely to help Republicans score wins before November. Still, as the election nears, “you may see some movement on some popular or populist legislation,” Suarez said.
Another challenge for NAIOP’s federal legislative team: Educating lawmakers. For example, of the 60+ members on the Ways and Means Committee during the 2017 Tax Cuts and Jobs Act, only five members of the Republican majority remain today. “All the education that we did for all those other folks was out the window. We had to basically start all over again with everyone new,” he said. NAIOP must continually reintroduce industry priorities to members of Congress and their staff on Capitol Hill.
Beyond tax issues, energy production and distribution have surged to the forefront of CRE discussions. Utility rates have risen for a number of reasons, including inflation. But data center development is taking the brunt of the public’s blame. “I was speaking to NAIOP of Florida a few weeks ago, and a utility representative explained that utility rates have gone up in Florida, but it’s not because of data centers. It’s because of inflation. You don’t hear that on the news,” Suarez said.
As a result, making sure Congress develops policies that ensure sufficient electricity is available and affordable during this time will be important for the development industry.
Comprehensive energy policy is a must. As demand grows, ensuring adequate electricity supply requires investment in transmission infrastructure – often across state lines. This raises thorny questions about cost allocation and regulatory authority. Utilities resist federal oversight, while ratepayers balk at footing the bill.
With major tax victories and emerging policy priorities, the CRE industry enters 2026 with momentum and a clear agenda. The challenge now is sustaining advocacy and preparing for the next wave of legislative battles.
Listen to the full episode on NAIOP’s Inside CRE podcast and subscribe to stay up-to-date as new episodes drop.
