|On Wednesday we witnessed the culmination of a year of exceptional disruption and turmoil, as protestors stormed the U.S. Capitol building, delaying the count and certification of the electoral votes. Fortunately, Congress confirmed President-Elect Biden on Wednesday night, a critical step in reassuring the nation that America remains committed to democratic values. Now it’s time to get to work, and collectively solve the health crisis and economic challenges facing our country.
Democrats took control of the Senate after winning two seats in the Georgia runoff election by a narrow margin, and some analysts have suggested the commercial real estate industry could face new hurdles. This may include higher taxes, elimination of the 1031 tax exchange and more stringent reserve requirements for lenders, given the losses fueled by the COVID-19 crisis, which could dampen activity. At the same time, President-elect Biden has pledged to distribute 100 million vaccine shots in his first 100 days in office, and more aggressive national efforts to fight COVID-19 could accelerate the “swift and sustained recovery” some economists are predicting.
In addition, stimulus relief – while half the size of the previous package — is beginning to percolate throughout the economy, and with a Democratic-controlled Senate, there is a possibility of another program in the future. The $900 billion plan passed in late December provides direct checks to Americans, extends unemployment benefits, and provides $25 billion in emergency rental assistance, giving a potential boost to the multifamily and retail sectors. Small businesses will also benefit from an additional $284 billion in Paycheck Protection Program (PPP) funds, and expenses covered by previous PPP loans can be written off, amounting to more than $100 billion in tax savings for participants.
Moreover, roughly $50 billion earmarked to procure and distribute vaccines and improve testing and tracing could speed a return to workplaces. Offices in central business districts have struggled, with vacancies in midtown Manhattan rising to the highest levels since 2009. Hopefully federal stimulus funds will accelerate the slower-than-expected rollout of the vaccine. This is essential, particularly given the unexpected loss of 140,000 jobs last month, the first decline in payrolls since April 2020 amid a surge in COVID infections.