Tax Shifts Ahead: Colorado CRE Eyes Washington as Policy Changes Take Shape

Denver, CO – With a newly unified administration in Washington and a budget resolution passed by Congress, Colorado’s commercial real estate (CRE) leaders are on high alert. Tax policy once a background buzz is now center stage, potentially reshaping the landscape for investors, developers, and landlords across the Centennial State.

According to Deloitte’s 2025 Commercial Real Estate Outlook, tax policy changes have vaulted into the top five concerns for U.S. industry executives, marking a dramatic rise from 11th place just last year. Globally, tax policy shot up to third place a strong signal that the industry’s collective eye is now squarely on Capitol Hill.

So why the sudden anxiety?

Let’s break it down.

The Trump-Era Tax Cuts Hang in the Balance

At the core of industry concerns is the looming expiration of key provisions in the Tax Cuts and Jobs Act (TCJA) at the end of 2025. Among the most valuable for CRE? The 20% pass-through deduction, which lowers tax burdens for many real estate operators and investors. If this sunsets, cash flow models across Denver’s office towers and warehouse parks could shift dramatically.

Also at stake: bonus depreciation allowances, business interest deductions, and even the potential corporate tax rate. While former President Trump hinted at slashing the rate further to 15% for manufacturers, Congress could consider raising it to balance the budget especially if paired with incentives elsewhere.

Sustainability Tax Credits Under Pressure

CRE players in Colorado have leaned into green infrastructure, thanks in part to energy efficiency tax credits introduced under the Inflation Reduction Act (IRA). These include federal deductions for solar power, smart HVAC systems, and eco-friendly building retrofits all crucial as the state ramps up climate-focused construction.

But these credits, once backed by bipartisan support, could be rolled back or revised as lawmakers hunt for offsets to extend TCJA perks. With Denver’s downtown vacancy rates still hovering around 30%, energy efficiency remains a critical lever for drawing tenants and reducing operating costs.

Opportunity Zones: Next Phase or Sunset?

Another major question mark is the future of Opportunity Zones, a popular provision of the TCJA that has brought billions in investment to underdeveloped urban areas, including across Colorado. Will they be extended, refined, or shelved? The CRE community is waiting for clarity.

Local Impact: Colorado’s Unique Position

For Colorado, especially Denver’s struggling office market, federal tax shifts could either accelerate recovery or stall momentum. Local relief, like the reduction in commercial property assessment ratios passed last summer, has already offered some breathing room. Now, the hope is that federal moves don’t undo that progress.

“The policy winds are shifting, and Colorado’s real estate community needs to be both nimble and visionary,” said one industry insider. “We can’t control D.C., but we can prepare.”

Planning Amid Uncertainty

CRE executives aren’t just reacting, they’re scenario planning. From renegotiating lease structures to reassessing investment timelines, Colorado real estate firms are preparing for a range of outcomes. Many are working with tax advisors, modeling the impact of various policy scenarios, and staying close to D.C. developments.

Because in a sector built on 10- to 30-year horizons, today’s tax laws could shape tomorrow’s skyline.