Today the House of Representatives followed the Senate’s lead and passed the Emergency Economic Stabilization Act of 2008, H.R.1424, by a vote of 263 - 171. President Bush is expected to sign the bill into law. This represents a huge victory for the commercial real estate investors!

In addition to the financial rescue plan, it includes the following:

• the two-year extension of both the 15-year timeline for depreciating leasehold improvements and brownfields expensing.  The two-year extensions on brownfields expensing and leasehold depreciation are retroactive to January 1, 2008 and will go through Dec. 31, 2009.
• a 5-year extension of the tax deduction for energy efficient commercial buildings.
  
• the deduction of up to $1.80/square foot for energy efficiency improvements made to commercial buildings that achieve a 50% reduction in energy use (compared to a base building defined by the ASHRAE 90.1-2001 Standard) will now expire Dec. 31, 2013.

My wife and I have a small but growing single family and four-plex rental property portfio at this time.  Is there any advice you can share with us regarding how we can best structure our real estate holdings?

The rate drops are getting more interesting. On February 6, a Governor from the Fed’s Penn Board said that they would likely hold rates constant as inflation was rising. Then the ISM (Institute for Supply Management) non-manufacturing index came out with the biggest drop on record consistent with the US being in a recession. The rate probabilities for the March meeting were about a 40% chance for a drop to 2.25%. As of today after the ISM announcement, there is only a 15% chance for 2.5%, but now a 25% chance for 2.00%. We need at least another point drop to get us into recovery territory. Maybe Bernanke finally realizes this and is more ready to act the Greenspan would have. Rates may get into the 50+ year low 2003 range once again.

Stuart Hardy, Ph.D.

Broker - Economist - Consultant