US Election Outcome and Commercial Real Estate

Hi there, Congratulations, America! This election highlighted the resilience of our democracy and the strength of peaceful transitions. As we look ahead, it’s an opportune moment to reflect on how recent political shifts may shape the commercial real estate landscape. Key Trends and Insights: Housing Regulations With leadership changes, fewer federal regulations on housing could be on the horizon. Policies from the COVID era, such as extended eviction notice periods, may be scaled back, potentially reducing delinquencies and improving payment reliability. While national rent control remains unlikely, local governments will continue lowering developer barriers, encouraging the expansion of the housing supply. The 1031 exchange laws remain unchanged, ensuring continued tax deferment options. 10-Year Treasury Yields The 10-year Treasury recently rose by 70-80 basis points, reflecting a market adjusting to anticipated policy stability. This trajectory hints at potential stabilization or a slight decline, aided by SOFR rate cuts targeting inflation control. Opportunity Zones: A Fresh Start Opportunity Zones are expected to gain renewed emphasis. They offer a pathway to foster development in underserved areas. These zones could see greater capital infusion with potential federal support, helping bridge critical supply gaps. Revitalized Bonus Depreciation Bonus depreciation, a major catalyst for CRE investments, could see renewed momentum, providing attractive tax incentives that may fuel more investment across the commercial real estate sector. Rising Industrial Demand A proposed 15% corporate tax reduction for domestic manufacturers could positively impact the industrial real estate sector. Demand for facilities supporting local production is likely to surge, pushing up industrial land and property values. Multifamily Investment Rebound Multifamily investments are projected to rebound by mid-2025 through 2026, as new supply growth slows. Land acquisitions are ramping up, and construction lending conditions continue to improve, paving the way for long-term growth. These perspectives offer an overview of expected trends. As we enter this new chapter, it’s valuable to consider the sentiment and data-backed insights of industry leaders like Jay Parsons and Carl Whitaker. Agree or disagree? What trends do you think will shape the market?