T
he One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, significantly impacts commercial real estate investors. By restoring 100% bonus depreciation for qualified real estate and accelerating phase-outs of renewable energy tax credits, the legislation creates a critical window for investors to reposition assets, prioritize energy-efficient upgrades, and lock in tax benefits before deadlines loom in 2027.

    The OBBBA's restoration of 100% bonus depreciation is a game-changer. Investors who acquire or construct nonresidential property can immediately write off the full cost of the property in the tax year it is placed in service. This eliminates the prior phased depreciation schedule and offers an immediate tax shield, boosting cash flow and reducing taxable income.

    The legislation also tightens screws on renewable energy incentives, creating urgency for developers of energy-efficient properties. Key changes include accelerated phase-outs of wind and solar projects, foreign entity restrictions, and the termination of the Section 179D energy-efficient commercial buildings deduction.

    Strategic opportunities arise from these provisions. Investors should prioritize renewable projects with tight timelines, leveraging bonus depreciation for industrial/logistics assets, and focusing on multifamily properties with energy efficiency upgrades. However, risks and considerations include foreign supply chain dependence, phase-out deadlines, and regulatory uncertainty.

    To capitalize on the OBBBA's incentives, investors must act decisively: accelerating construction timelines, prioritizing domestic partnerships, and maximizing depreciation benefits. Those who wait will see the window to capitalize on these incentives slam shut in 2027, leaving behind a landscape of higher costs and reduced flexibility. The time to act is now.