President-elect Donald Trump’s proposed economic policies are expected to significantly impact the commercial real estate (CRE) sector. Commercial property owners and investors should closely monitor these policy developments to assess their potential effects on the CRE market.

Key aspects of the agenda include:

Tax Policies:

•Extension of 2017 Tax Cuts: Plans to prolong the Tax Cuts and Jobs Act, maintaining reduced corporate tax rates and favorable provisions for CRE investors.

•Further Corporate Tax Reductions: Proposes additional cuts, potentially lowering operating costs for businesses occupying commercial spaces.

Trade and Tariff Policies:

•Universal Baseline Tariff: Intends to implement a 10% tariff on all imports, with higher rates for countries engaging in unfair trade practices.

•Increased Tariffs on Chinese Goods: Advocates for a minimum 60% tariff on Chinese imports, aiming to reduce trade deficits and encourage domestic production.

Regulatory Policies:

•Deregulation Initiatives: Plans to eliminate regulations deemed unnecessary, potentially streamlining development processes and reducing compliance costs for CRE projects.

Immigration Policies:

•Stricter Immigration Enforcement: Proposes aggressive deportation policies and restrictions on immigration, which could affect labor availability in construction and property management sectors.

Monetary Policies:

•Federal Reserve Oversight: Seeks to limit the Federal Reserve’s independence, potentially influencing interest rates and monetary policy decisions that affect CRE financing.

Energy Policies:

•Energy Independence: Aims to boost domestic energy production by removing regulations, potentially affecting energy costs for commercial properties.

Potential Impacts on Commercial Real Estate:

•Increased Construction Costs: Higher tariffs on imported materials may raise development expenses.

•Labor Market Constraints: Stricter immigration policies could lead to labor shortages in construction and maintenance.

•Inflationary Pressures: Tariffs and deregulation may contribute to inflation, affecting property values and rental rates.

•Financing Challenges: Changes in Federal Reserve policies could influence interest rates, impacting mortgage rates and investment returns.

Commercial property owners and investors should closely monitor these policy developments to assess their potential effects on the CRE market.