CRE's New Playbook: What the OBBB Act Means for Corporate Occupiers

Executive Summary

The One Big Beautiful Bill Act (OBBB), passed on July 4, 2025, reshapes the real estate landscape in ways that impact tenants with significant portfolios. For corporate occupiers, this means new opportunities to lower occupancy costs, structure leases more efficiently, and rethink capital investment strategies.

Key Provisions That Matter to Occupiers

100% Bonus Depreciation

Tenant improvement allowances (TIAs) and build-outs can qualify for accelerated depreciation. If landlords can expense these costs upfront, they may be more willing to offer larger TIAs or improved terms. Occupiers should push for tax savings from bonus depreciation to translate into higher TI allowances or reduced rent structures  

Section 179 Expansion

Corporate tenants funding furniture, fixtures, or qualifying equipment in leased spaces can expense more immediately under the new $2.5M cap, with phase-out at $4M. Relocations and fit-outs are now more attractive from a tax perspective  

Expanded Interest Deductibility (§163(j))

Companies financing their own projects, such as build-to-suit facilities, benefit from expanded interest deductibility. This makes ownership or build-to-suit projects more financially viable compared to traditional leases  

Factory Expensing (Section 168(n))

Manufacturers and distributors building new U.S. facilities may qualify for 100% expensing of production-related real estate. This provision can tilt lease-versus-own decisions in favor of ownership 

Market Backdrop Last 60 days

Recent data suggests a cautious market comeback. Industrial vacancy rose to 6.6%, giving tenants leverage in warehouse negotiations. CMBS delinquencies increased to 7.23%, signaling potential landlord distress—an opportunity for occupiers to renegotiate leases.  

What Occupiers Should Do in the Next 90 Days

1. Re-evaluate leasing strategy: Use market softness and financing stress to negotiate stronger terms.
2. Leverage tax-driven landlord incentives: Request larger TIAs or rent concessions from landlords.
3. Model lease vs. own differently: Expanded interest deductibility and factory expensing can make ownership more attractive.
4. Time capital spending: Align relocations and upgrades with post-Jan. 19, 2025 eligibility for bonus depreciation.
5. Stress-test exposure: Assess landlords with CMBS-backed financing for renegotiation opportunities.

Bottom Line for Occupiers

The OBBB Act gives corporate occupiers new leverage. By negotiating smarter leases, accelerating deductions, and reconsidering ownership strategies, tenants can reduce costs and improve flexibility in a mixed market environment.