Why the infrastructure bill could have an impact

Proposal includes funding for improvements to aging buildings and more

April 07, 2021

The US$2.3 trillion infrastructure bill proposed by U.S. President Joe Biden could stimulate the world economy and impact commercial real estate.

Some elements of the plan directly relate to buildings. For example, there are proposed subsidies for landlords to make capital improvements on older assets, such as retrofitting office buildings to cut their energy usage or reducing carbon emissions in the industrial sector. Others relate to upgrades to roads, bridges, highways and more—basic elements that are crucial for ecommerce to succeed. 

“The bill pointedly aims to improve aspects of infrastructure vital to the performance of the economy including tunnels, ports, rail, airports, water systems, the electrical grid and highspeed broadband,” says Ryan Severino, Chief Economist, JLL. “Less conventionally, it also aims to improve the quality of buildings, including commercial real estate, upgrade the U.S. supply chain, invest in research and development and provide job training for workers.”

Some of the elements indirectly impact commercial real estate. The more efficiently people, goods and data get moved, the better commercial real estate performs in the long run, Severino says.

“In a post-COVID world replete with better technology to enable work-from-home, online shopping, and digital meetings, efficient movement in the economy only helps people return to offices, retail centers, and hotels,” Severino says. “A rapidly rebounding labor market only bodes well for CRE, especially one creating many jobs that develop or enhance nonresidential structures, typically work in an office, or provide personal services to people.”

Labor and the world economy

The decrepit state of U.S. infrastructure creates numerous problems for the world economy.

For a modern economy to function properly, people, goods, and information must flow efficiently, Severino says. Workers saddled with challenging commutes waste time – in traffic, stuck on trains and subways — that could get spent more productively. Business travelers contending with cancelled or delayed flights not only waste time but often miss out on opportunities.

The longer it takes goods to get to their destination, be that someone’s home or a retail facility, the more time gets wasted and the more sales lost. And the COVID-19 pandemic clearly exposed the vital importance of the electrical grid and high-speed internet access.

“Without the timely and efficient flow of information, modern economies simply do not function,” Severino says. “And since economies are interconnected, the U.S. economy impacts many other economies.”


The bill generally relies on existing programs, from federal loan programs to FEMA's Building Resilient Infrastructure and Community Program, to efficiently deploy funds to the intended beneficiaries.

Because of this reliance on existing programs, it is likely to be impactful in the near term.

“This ambitious bill will likely rely on established federal programs with proven track records in deploying grants and loans to infrastructure projects,” says Brian Oakley, Executive Vice President, Public Infrastructure Advisory. “Leveraging these programs through additional funding for grants and loss reserves will accelerate deployment of capital to an existing pipeline of infrastructure projects.”

The Department of Transportation’s grant and loan programs and the Federal Emergency Management Agency’s Building Resilient Infrastructure and Community Program are among the current government entities that would be used to deploy funds.

“Whether it involves distributing formula funds or underwriting loans for infrastructure, these programs have well established processes, procedures and governance frameworks, so the deployment apparatus is already in place,” Oakley says.

Many government entities and states have been planning infrastructure projects that have been on hold awaiting funding, says Bryan Thomas, Vice President, Public Institutions, JLL.

“We have clients that we are already helping plan infrastructure projects ranging from transit lines to EV charging stations that need access to funding,” he says. “With the prospects of an infrastructure bill becoming a reality, we are now working to position these projects to take advantage of the potential incentives.”

Looking for more insights? Never miss an update.

The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.