Ray Beeman, principal at the Washington Council Ernst & Young practice of Ernst & Young LLP, participated in a video interview at Nareit’s REITwise: 2018 Law, Accounting & Finance Conference in Hollywood, Florida.
Turning to recent tax reform legislation, Beeman said the most immediate impact on REITs will be to figure out how to implement “this massive bill” by waiting for more clarity and guidance from the Treasury and Internal Revenue Service. Over the longer term, there will be some deeper questions around what kinds of structures need to be rethought, he added. “The change management side of this whole process—that could span years. That’s how significant this bill is.”
Beeman also said the $1.5 trillion tax cut is likely to spur investment in the United States. For REITs, the impact will be seen on REITs directly as well as on their tenants. “It will be a very complicated picture in terms of what the investment outlook looks like,” he said.
Meanwhile, Beeman noted that the omnibus budget bill for fiscal year 2018 includes many technical correction-type provisions, some of which are of interest to REITs. He added that there is unlikely to be any additional legislative activity this year, beyond the budget bill.