Benefits for Commercial Real Estate in Economic Stimulus
The recently passed economic stimulus plan, H.R. 1 the American Recovery and Reinvestment Act, contained stimulus for commercial real estate in three primary ways: green building and energy efficiency, business tax incentives, and investment in transportation and infrastructure.
For green building and energy efficiency, H.R. 1 created renewable energy loan guarantees. Loan guarantees for renewable energy systems are available for construction that begins before September 30, 2011. This will benefit commercial property owners who want to invest in alternative energy systems for onsite power generation. The bill also provides $100 million for grants to evaluate and clean up former industrial sites to turn them into a productive community use.
There are three facets for business tax incentives. First businesses are allowed to recover the cost of capital expenditures over time according to an accelerated depreciation schedule set by Congress in 2008. Second, to help small businesses recover the cost of specific capital expenses, small businesses may write of the cost of these expenses rather than recovering the costs over time through depreciation. Until December 2010, small businesses can write-off up to $125,000. Finally, small businesses will be allowed to carry back net operating losses for five years, rather than the previously allowed two years.
Finally, investments made in the nation's infrastructure through transportation, roads, and the energy grid will help owners and investors of commercial property in increased property values.
