Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Thursday, 11 January 2018

Republicans Notch a Major Win

After flailing on health care and the border wall, the Republicans were desperate for a win. They got one in the tax reform bill.

By David McCarthy, Martin Schuh and Christina Zausner

Just before the holidays last year, the stars finally aligned to allow the 'governing' party to deliver on an oft-shouted, major campaign promise: tax reform.

The measure is being touted by the GOP as a huge stimulant to economic growth and worker wages, primarily through the massive headline reduction in corporate tax rates and temporary individual tax breaks (most provisions sunset after seven years).

After flailing on health care "Repeal & Replace" and the border wall, the Republicans were desperate for a win heading into the midterm election season this fall. Passing the tax bill will certainly give them a boost heading into a very challenging environment.

Looking Ahead: According to notable pundit Charlie Cook, midterm elections tend to be a referendum on the sitting president: The White House's party has lost ground in the House in 18 of the past 20 mid-term elections, and in the Senate in 15 of those elections (e.g., 1994, 2006, 2010, 2014).

Timing Is Everything: It is always difficult summarizing regulatory and legislative events, and this year is even more difficult because there have been so many headlines with so little actual achievement. But as of Dec. 20, 2017, regulatory reform certainly seems more possible, although it may be more surgical than many in our industry would have liked.

Tax Reform Bill Highlights

The 2017 Tax Bill permanently lowers the corporate tax rate to 21 percent starting this year, restructures marginal rates on pass-through entities and small businesses and provides leveraged borrowers an option on their interest and cost recovery deductions.

The new interest deductibility restrictions broadly contained an exception for real estate businesses. However, the provision also allows for the immediate expensing of capital investments. Importantly, the bill also preserves Section 1031 Like-Kind Exchanges for real property.

As noted above, the legislation avoided major disruptions for long-term asset planning, but the personal side is far more uncertain due to staggered sunsets and unindexed thresholds that are sure to set up a series of legislative land mines for future Congresses.

Provisions for Business and Those Related to Commercial Real Estate

• Lowers the corporate tax rate to 21 percent from 35 percent, effective...


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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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