The industrial market is rarely reshaped by a single law, but occasionally, policy shifts redirect capital for years. Panelists at NAIOP’s I.CON West conference in Los Angeles agreed that the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump in July 2025, may be one of those moments.
Moderated by Cameron Trefry, regional vice president, Ware Malcomb, panelists included Eloy Covarrubias, executive vice president, CBRE; Peter Kroner, director, national industrial, market intelligence, Avison Young; and Steven Herscher, CPA, tax partner, Armanino.
Like the Inflation Reduction Act and the CHIPS and Science Act, the OBBBA is expected to influence real estate investment decisions for years to come. Unlike those targeted measures, however, this legislation is broader and could materially affect manufacturing, development timelines, land values and capital flows.
Below are key takeaways from the conversation:
Permanent 100% Bonus Depreciation Changes the Investment Equation
The permanent extension of 100% bonus depreciation is one of the bill’s most significant provisions. Businesses can now deduct the full cost of qualifying assets in the year they are placed in service.
Because bonus depreciation rates shifted repeatedly over the past two decades, companies often made purchasing decisions based on tax timing. Permanence provides certainty, allowing investment decisions to align with operational needs. For manufacturers, that creates a strong incentive to modernize facilities, automate production and reinvest in equipment.
Qualified Production Property (QPP) Is a Game Changer
Historically, bonus depreciation applied to equipment and certain improvements – not the building itself. Under the OBBBA, qualifying manufacturing space may be eligible for accelerated depreciation.
This shift could encourage owner-operators to build facilities, prompt companies to reconsider lease-versus-own strategies, and give developers reason to target manufacturing users instead of pure distribution tenants.
Strict deadlines for groundbreaking and production mean companies must move quickly. That urgency may increase competition for land, entitlements and construction resources. QPP may ultimately prove to be one of the bill’s most consequential – and underrecognized – provisions.
Opportunity Zones Are Now Permanent
The OBBBA makes opportunity zones permanent, building on their creation under the Tax Cuts and Jobs Act. While the revised program may not spark the same surge seen in 2017, it remains a meaningful capital formation tool. The law establishes a rolling structure and adjusts eligibility maps and reinvestment thresholds, creating a more normalized and predictable framework.
Specific Benefits Could Spur Industrial Reshoring
A central question is whether the OBBBA will drive meaningful reshoring. Unlike the CHIPS Act, which focused primarily on semiconductors, this bill is industry agnostic. Any qualifying U.S. manufacturing activity may benefit. That includes food production, pharmaceutical manufacturing, cold storage tied to processing, and advanced robotics-driven operations.
If reshoring accelerates, panelists agreed it will likely be capital intensive and technology driven. The result may be fewer but more highly skilled jobs, reflecting a modern manufacturing model rather than a return to legacy industrial employment.
Pitfalls and Risks Must Be Managed
The benefits are significant, but so are the risks. Failure to meet groundbreaking or production deadlines, misinterpreting qualification standards, or encountering permitting delays could jeopardize eligibility. If manufacturing ramps up nationally, contractor and design capacity could tighten, extending timelines and raising costs. Disciplined underwriting and careful tax planning will be critical.
Capital Appears Ready to Reengage
After years of uncertainty tied to trade policy, interest rates and political shifts, the legislation provides clearer rules. Capital that has been sidelined is beginning to move.
Developers are reevaluating projects. Owner-users are reconsidering expansions. Manufacturing tenants are exploring reinvestment rather than relocation. If interest rates stabilize, liquidity could return meaningfully to industrial assets – particularly those aligned with production.
Note: This summary is for educational purposes only and does not constitute tax advice. Readers should consult their own tax and legal advisors to determine how the law applies to their specific projects and business structures.
This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2026. Learn more about JLL at www.us.jll.com or www.jll.ca.
