We propose a general equilibrium model of commercial real estate development where developers from several jurisdictions compete to raise equity and non-recourse mortgage debt. In this setting, we investigate the determinants of differences in construction patterns across jurisdictions. We illustrate our result as a function of the CRE project specific equity delivery rate and the effective mortgage debt yield. Our equilibrium closed form solutions depend on parameters with relevant economic implications, such as the jurisdictions' property tax rates, the production economies of scale of CRE development, debt capacity constraints, productivity shocks to the

production and sale of commercial goods to local households, and the scarcity of construction inputs available in the economy. Finally, we highlight how global real estate markets can influence local jurisdictions' fiscal policies.