But House Republicans counter that the interest deduction will be replaced by other reforms long sought by businesses. That includes lowering the headline corporate tax rate to 20 percent, and the immediate full expensing of capital investments. And proponents of ending the deduction say that incentivizing the real estate industry to rely more on equity and less on debt could be beneficial in the long run.
"Would their industry be better off if the deduction was preserved? Sure," said Alan Cole, an economist at the Tax Foundation. "But they aren't coming away empty-handed from this tax bill, and other sectors need the break more than they do."
President Donald Trump has not specifically weighed in on the issue, though the longtime real estate developer has often referred to himself as "the king of debt." And the tax plan he released during the campaign allows manufacturing companies to choose between full expensing and net interest deductions. The White House has not provided additional details since then, despite assurances that a tax plan is forthcoming.
"I think he understands our cause, and I think he will be sympathetic," DeWitt told CNBC. "I'm not sure how much he's paid attention to the details — and again, there aren't many details — so we need to flesh the bill out."
BUILD commissioned an analysis of company earnings calls dating from the time the House tax proposal was released in summer 2016 through February. Out of 471 calls that mentioned tax reform, the group found, nearly 17 percent brought up the interest deduction. It was the second-biggest tax issue discussed, behind border adjustment.
And the group points out that there could be far-reaching ripple effects of eliminating the deduction. Hospitals, for example, have a debt-to-capital ratio of 63 percent. That's higher than the trucking sector, which is at 48 percent. The real estate sector sits at 43 percent.
"We're willing to look at the entire package — it's a big package," said David Schwartz, an officer at the National Multifamily Housing Council and co-founder of Waterton Associates. "But this is probably the most objectionable part of the whole blueprint."