Will Trump’s Presidency Impact Commercial Real Estate?

November 28, 2016

Now that the elections are over, and Donald Trump stands to take office come late January 2017, many might wonder what the impact of the 2016 U.S Presidential Elections will be on the Commercial Real Estate industry. Although not limited to President Trump, the risk of recession has increased as it has done so historically due to the hasty implementations of new fiscal policies, trade deals, tax decreases, etc. on behalf of the new president-elect. Consensus by traders that the Fed will increase its key interest rate have decreased from 85%, before the election, down to 25%. Uncertainty as to what Trump’s economic policies look like will most assuredly make for volatile capital markets in the short term. With so many uncertainties in the economy it is likely that there will be some pull-back in new construction. Potential development plans that were promising before the election results were revealed, may be taken off the table for the time being. The U.S may see an increase in foreign money on behalf of investors who would rather act now opposed to later due to the the possibility of barriers arising in the upcoming year against globalization and foreign investment. Depending which policies are enforced and carried out in the near future, there might be a change in willingness amongst domestic and foreign investors alike to invest within secondary and tertiary markets. If President Trump does indeed follow through with anti-trade policies, the country could see an increase in both inflation and cap rates on commercial properties. In addition, a lack of sufficient economic activity in light of hasty policy changes might give cause to property values seeing a large decrease.

How Will Trump’s Presidency Impact the Commercial Real Estate Industry?