Commercial Real Estate and the Trump Administration

Nov 14, 2016 | Blog

Commercial Real Estate and the Trump Administration

by Rob Seidenwurm


Whatever your opinion on the results of this November’s election, it is clear that the Trump Administration will have an effect on many economic markets, including the commercial real estate market.

On one hand, it is easy to react that since Trump made his career in commercial real estate, that any effect on that market should be positive.  However, given the lack of specifics of Trump’s plan, it is more realistic to consider how a Republican President with a Republican Congress might effect the markets:

  1. Regulation – The most likely scenario is that underwriting regulation is likely to be eased, thus making financing easier. This is at least a short term positive for the commercial real estate market, as it should be easier to complete purchases and refinances.

  2. Foreign Investment – This is a tricky one. On one hand, if regulations get eased, it may be easy for foreign investment to continue coming in and feeding the US CRE market.  On the other hand, if trade is restricted, or the dollar gets too strong, foreigners could look elsewhere to put their dollars and exit the US CRE market.  Way too soon to know.

  3. Strength of Economy – It stands to reason that if the economy is stronger, and more jobs are created, the retail and office sectors should benefit. If taxes are lowered, there will be more money to put into CRE investments, driving up prices.  Again, this is conventional wisdom of Republicans, not necessarily Trump.

Overall, if we consider the election as a win for Republicans, and not Trump, the Commercial Real Estate market outlook should be bullish. Trump Administration and Commercial Real Estate.

 

 

Whatever your opinion on the results of this November’s election, it is clear that the Trump Administration will have an effect on many economic markets, including the commercial real estate market.