By Brielle Scott
“It’s brought a lot of excitement to the real estate industry,” said Carey Heyman, managing principal for the real estate industry at CLA, talking about the “One Big Beautiful Bill Act” on NAIOP’s Inside CRE podcast last week.
In his conversation with NAIOP’s Director of Strategic Initiatives Christopher Ware, Heyman covered key provisions of OB3A (CLA’s internal shorthand for the “One Big Beautiful Bill Act”) for commercial real estate and shared strategies for balancing tax advantages with the continued uncertainty around tariffs.
“We’re having a lot of conversations around OB3A, but there’s continued frustration about where the Fed has interest rates, the high cost of borrowing, and the fact that the market’s just not really open yet,” said Heyman, adding that he’d be happy to have some certainty back in his life.
“The hard thing about scenario planning with clients – it’s great because it gets us in front of them and we can talk through different models. But the struggle is we don’t have those surefire answers.”
“OB3A gives us the opportunity to say, ‘From a tax perspective, here’s how we can plan.’ But with tariffs and the fight on inflation and where interest rates are, and whether the big banks will start lending like they did a couple years ago, that’s the struggle for our clients and for the industry.”
Looking at provisions of OB3A most relevant to commercial real estate, Heyman pointed out: “The 100% federal bonus depreciation for qualifying improvements [included in OB3A] is great. It accelerates deductions. It helps improve your cash flow and enhances after-tax returns. But right now, locking in prices that may be elevated due to either pending or enacted tariffs is a concern. If I’m a developer, what do I do?”
Tariffs on Japan were finalized recently, and a lot of great Proptech technology comes over from Japan. If you are a multifamily developer hoping to incorporate technology that comes from Japan, you’re going to have to remodel either the development or the operational structure of your investment, Heyman pointed out.
“If we can get some level of comfort with what’s going on in the real estate market, with interest rates, with borrowing costs, the sky’s the limit for our industry. I’m really excited looking ahead. We just need to kind of get through this messy middle in the short term,” he added.
So how can commercial real estate firms position themselves to be successful in the next 12 months?
“Number one: If you care about a topic that’s being discussed at a federal, state or local level, get involved. Make your voice heard,” said Heyman. The real estate professionals who sit on the sidelines and don’t make their voice heard on legislative matters have the most to lose.
“Second, we believe that bringing AI [artificial intelligence] along with us makes us better service providers. And I would argue that’s the same thing for our real estate clients,” said Heyman. “Don’t shy away from this coming wave of AI… We’re a shop that really believes in [AI]. Every single one of our employees has access to Microsoft Copilot, which is pretty unheard of in our profession. The same way that operators leaned into property technology, they should be leaning into AI to make their business more efficient and more reactive to real-time issues.”
“The last thing I would mention is, scenario modeling, due diligence, and just being prepared for anything that can happen,” Heyman said. “This administration seems to take pride in their ability to keep us on our toes. And I don’t say that in a flippant way. I say that every day can bring something new. Make sure that you’re paying attention to the news, that you’re modeling out different scenarios, that you can work with your service providers, whether that be accountants or lawyers or whomever it is, to plan for everything.”
Real estate professionals who are really keeping their ear to the ground and are monitoring the situation and using their voice – those are the ones that are going to be the most successful, he concluded.
Listen to the full podcast episode, where Carey dives deeper into key provisions of OB3A including 100% bonus depreciation, Section 179 expensing, and business interest deduction relief, along with updates to the opportunity zone program.
