T
he "One Big Beautiful Bill" is a piece of legislation that could significantly impact the commercial property business, particularly in California. With a price tag of nearly $3.3 trillion added to the nation's debt load from 2025 to 2034, this bill has the potential to reshape the industry.

    At its core, the bill proposes a return to 100% bonus depreciation for building improvements such as HVAC upgrades and tenant improvement packages. This would be a game-changer for property owners looking to reinvest in their assets or reposition them for the post-pandemic market.

    The bill also boosts the Qualified Business Income deduction for pass-through entities, including real estate partnerships, and raises the cap on the SALT deduction for individuals earning less than $500,000. For Californians, this is a welcome tax relief that could free up capital for additional investment.

    However, there are concerns about Section 899, a "revenge tax" aimed at foreign investors from countries with discriminatory tax laws. If foreign capital dries up, it may impact major commercial developments, particularly in coastal markets. The rollback of green energy incentives is also a concern, as it could dull progress towards more sustainable buildings.

    The bill has passed the House and is under consideration in the Senate, where several provisions are drawing bipartisan attention. CRE stakeholders are watching closely to see if this sweeping legislation becomes law, gets trimmed down, or stalls altogether.