Thursday, March 31, 2011

BOMA Lends Support to Commercial Real Estate Bill

BOMA San Francisco Members:

BOMA International recently joined a number of commercial real estate organizations in support of legislation  targeted at the current equity crisis: The Community Recovery and Enhancement (CRE) Act (H.R. 1147).

The measure offers tax incentives in order to attract new private equity to commercial real estate. The legislation is a temporary and targeted plan that encourages new investment by offering 50 percent bonus depreciation on eligible new investment equity and a deduction of losses that are not subject to passive loss limits. Qualifying investments must be made before 2013 and the proposal only applies to assets purchased before 2009. The bill would require that at least 80 percent of the new investment be used to pay down the bank loan, with the remaining amount used for property improvements. With the new funds directed towards lowering the outstanding debt on the asset, the excessive debt ratios that threaten both the commercial real estate and banking sectors, as well as the broader economy, will be reduced.

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