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Provision in Tax Bill Would Raise Rates on Foreign Companies and Investments

June 18, 2025

Real estate market participants and other industries with a global investor base are concerned about Section 899, a provision that would impose retaliatory income taxes on foreign investments and companies in the U.S. 

• CREFC joined other real estate industry groups in raising concerns about the provision in the House-passed One Big Beautiful Bill (OBBB) to Senate leadership. In a letter to lawmakers, the groups suggested changes to exempt non-controlling foreign debt and equity investments from the retaliatory taxes. Click here for the letter. 
• A CREFC fact sheet on the provision is available here. 
• CREFC will hold a webinar briefing on the issue next week. A separate invite will be sent soon. 

Background: The House Version of OBBB contains a provision—Section 899—that would allow Treasury to impose annual income tax increases of 5% on any foreign individual, government, corporation, trust, foundation, and other similar entities in response to unfair tax treatment by a foreign country against the U.S.

• The provision responds to unfair taxes by increasing the rate of tax generally applicable to certain taxpayers connected to the foreign jurisdiction. The legislation describes a number of per se unfair taxes and also gives the Treasury Secretary authority to designate additional unfair taxes.
• The increased rates in the House version are capped at 20% and the Senate is at 15%, which is in addition to any existing tax the entity pays. The effective tax rate could increase to 45% or 50% for foreign investors or companies. 
• The Senate version would delay implementation of the tax until at least 2027.
• The Senate version includes an explicit 899 exemption for “portfolio interest,” which excludes many debt securities.
• The Senate version of the bill focuses the major retaliatory increases on countries with Undertaxed Profit Rules (UTPR). Countries with only discriminatory or other unfair taxes, like the digital service tax, would be subject to a super Base Erosion and Anti-Abuse Tax (BEAT).

Impact: The provision could chill investment in U.S. real estate debt and equity through a combination of increased costs and uncertainty as to whether the tax will apply to certain countries. Below are the major concerns CREFC members have identified:

• U.S. Real Estate: Potential chilling effect on cross-border capital flows into CRE, which includes $213 billion in the last five years and more than 10% in transaction volumes. Some estimates project foreign investors would need a 15% change in price to account for tax changes at the maximum rate.
• Foreign banks and other lenders: Additional tax on non-U.S. lenders providing financing to U.S. borrowers. 
• Foreign investors in U.S. funds: Additional tax on non-U.S. investors in funds, including debt funds, providing financing and capital to U.S. borrowers. 
• Securitized products: Investors in CMBS may be exempt from 899 under the portfolio interest exemption, but further analysis is being done on the scope of the exemption. There could be structures that exclude or include securitization products.
• U.S. Borrowers: CRE loans frequently include provisions in which the borrower contractually agrees to bear the risk of changes due to international tax law. For existing loans, any additional tax imposed under Section 899 would be the responsibility of the borrower, typically in the form of a gross-up payment to the foreign lender.

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CREFC Honors Lea Overby as This Year’s Woman of Distinction and Toby Cobb as 2025’s Recipient of the Prestigious Founders Award

2025 Award Winners Announced at CREFC’s Annual June Conference 

NEW YORK, June 10, 2025 – The CRE Finance Council (CREFC) announced today that Lea Overby is the recipient of this year’s Woman of Distinction Award and Toby Cobb is the recipient of its Founders Award. CREFC revealed the award recipients at its Annual Conference in New York City.
  
CREFC’s Woman of Distinction Award. The Woman of Distinction Award recognizes women professionals in commercial real estate (CRE) finance who, through their engagement in CREFC and the greater CRE finance industry, demonstrate outstanding leadership skills and advocate for a more inclusive industry. Ms. Overby is Managing Director and Head of U.S. Commercial Mortgage-Backed Securities (CMBS) Research at Barclays.
  
A 25-year CRE finance industry veteran and CREFC member since 2010, Ms. Overby has held senior roles within various segments of the CMBS marketplace. Prior to joining Barclays in 2021, Ms. Overby was head of CMBS research at Wells Fargo Securities. Between 2016 and 2018, she oversaw CMBS analytics and research at Morningstar Credit Ratings after heading CMBS research at Nomura Securities International. 
  
A leading voice in the industry, Ms. Overby has moderated numerous CREFC conference panels, which draw engaged audiences, and she serves on the CREFC Women's Network Advisory Board. Ms. Overby’s team at Barclays conducts research and analysis of agency and non-agency CMBS and the overall state of commercial real estate. 
  
“It is a great honor to receive this award, and to be included in the ranks of talented women professionals CREFC has acknowledged over the years. I have found it rewarding to participate in CREFC’s industry conferences to help drive conversations about the CMBS markets. I have also enjoyed partaking in the initiatives of the Women’s Network, which is a key source of support for a wide range of women professionals in the industry,” said Ms. Overby.
  
“Lea has demonstrated a deep commitment to CREFC’s membership and the greater CRE finance industry,” said Lisa Pendergast, President and CEO of CREFC. “She has been a stalwart supporter of the Association and its membership for over two decades. Her analysis of CRE finance markets and her research offer clarity to an industry that has been buffeted by a broad array of challenges. Lea has helped educate our industry for decades, and she has been a trusted advisor for institutions that have come to rely on her research and insight to make important investment decisions. She is always generous in sharing her knowledge with members and driving engaging conversations. We are also grateful for her support of our Women’s Network Advisory Board.”
  
To read about previous winners, click here. 
  
CREFC’s Founders Award. CREFC’s Founders Award is bestowed on an industry professional who has demonstrated outstanding leadership and offered significant contributions to the betterment of CREFC and the commercial real estate finance industry. Established in 2006, recipients of this award have engaged in innovative business practices and industry activities that have successfully enhanced the CRE market and improved debt liquidity to this key component of the U.S. economy. 
  
As Co-Founder and Managing Partner of 3650 Capital, Toby’s involvement in CREFC and CRE finance spans over three decades. A CREFC member since 1997, Mr. Cobb is responsible for loan origination, capital markets, financing activities, and oversight of 3650 Loan Servicing, a rated special servicer. He is also a member of the firm’s investment committee. 
  
Mr. Cobb acted as Co-Chief Executive Officer in the restructuring, management, and sale of LNR Property LLC. Prior to LNR, Mr. Cobb was a managing director of Deutsche Bank Securities, coordinating Deutsche Bank’s activities related to the Emergency Economic Stabilization Act of 2008 and associated government programs responding to the global financial crisis. 
  
As Co-Head of the U.S. commercial real estate business at Deutsche Bank, Mr. Cobb helped build and manage a team with more than $30 billion in annual loan originations. Before Deutsche Bank, Mr. Cobb worked for Donaldson, Lufkin & Jenrette’s (DLJ) commercial mortgage group, where he was responsible for specialty finance clients, loan origination, and CMBS securitizations. Prior to DLJ, Mr. Cobb worked at Citicorp Securities. 
  
“I am honored to receive this acknowledgement from my peers in the CRE finance industry and CREFC, which has served as a cornerstone of the market for over three decades and played a key role in the commercial property finance market’s growth and evolution,” said Mr. Cobb. “It is a privilege to be included among many talented members who have previously won this recognition. I want to thank my friends and long-time colleagues for recognizing me, and I look forward to continuing to help the CRE finance industry evolve and grow.”
  
“For three decades, Toby has been involved with driving innovation in CRE finance, and he has served in pivotal roles that helped our market navigate many of its most challenging moments,” said Ms. Pendergast. “He has been a senior leader with some of the industry’s preeminent market firms, and his work has been broad-based, touching various market segments. We are grateful that he has supported CREFC with his extensive experience and broad range of senior roles, notably our Executive Committee and Board of Governors, where we have benefited from his vast knowledge of the CRE finance markets.”
  
About CREFC 
The CRE Finance Council (CREFC) is the trade association for the nearly $6 trillion commercial real estate finance industry, with a membership that includes approximately 400 companies and 19,000 individuals. Member firms include balance sheet and securitized lenders, loan and bond investors, private equity firms, servicers, rating agencies, and borrowers. For more than 30 years, CREFC has promoted liquidity, transparency, and efficiency in the commercial real estate finance markets, and functioned as a legislative and regulatory advocate for the industry, playing a vital role in setting market standards and best practices and providing education for market participants.
  
Media Contact:
Aleksandrs Rozens
arozens@crefc.org
646-884-7567

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The CRE Finance Council Names Leland Bunch as Chair of Executive Committee

CREFC Welcomes New Members to its Executive Committee and Board of Governors at Annual June Conference

• Chair-Elect: Lissette Rivera-Pauley (Regions Financial Corp.)
• Immediate Past Chair: Bob Foley (TPG Real Estate and TPG RE Finance Trust, Inc.)
• Vice Chair: Elaine McKay (Ares Management LLC) 
• Secretary: Kim Diamond (NYU)
• Treasurer: Adam Behlman (Starwood Property Trust) 
• Long Range Planning & Investment Committee Chair: Daniel Olsen (KeyBank Real Estate Capital) 
• Membership Chair: Toby Cobb (3650 Capital)
• Policy Committee Chair: Rick Jones (Jackstay Ventures)
• Program Committee Chair: Mary Jane Potthoff (Morningstar DBRS)

The association also welcomes and congratulates new members to its Board of Governors, including:

• Nitin Bhasin (KBRA)
• Josh Cromer (Rialto Capital Advisors)
• Marshall Glick (AllianceBernstein)
• David Harrison (Midland Loan Services) 
• Adam Hayden (NY Life Real Estate Investors)
• Spencer Kagan (Barclays)
• Sean Ryan (JLL)
• AJ Sfarra (Wells Fargo)
• Lindsey Wright (KKR)

“We want to welcome the newest members of the Executive Committee and our Board of Governors. We look forward to collaborating with you on key issues that have the greatest significance and directly impact our industry and its members,” added Pendergast.

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