The impact of Trump’s presidency on US commercial real estate

The policy implications from a second Trump presidency are expected to affect US commercial real estate (CRE) through curbed immigration, tax cuts, and increased tariffs. However, CRE’s relative pricing to bond yields will probably most influence values in the short term.

What you will learn:

• Looser fiscal policy is likely to provide a tailwind to occupier performance in the near term as we now expect stronger GDP growth, while the prospect of tariffs could lead to some goods stockpiling, which would be a positive for warehousing demand.
• Offsetting this, curbed immigration will possibly add to costs in the hospitality, manufacturing, and construction segments, while increased tariffs will impact industrial and retail in the long run as higher costs are passed on to consumers.
• Our expectation for the 10-year Treasury yield to persist at a higher rate compared to our October baseline will have a negative impact on CRE investment performance. We expect CRE property yields would need to gradually move higher to maintain an appropriate risk premium relative to 10-year Treasuries.

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