CHICAGO—The election of Donald Trump to the presidency caused some uncertainty as people tried to figure out in what direction this unconventional politician would take the country. The election also coincided with a slowdown in real estate demand and returns in late 2016 and into early 2017, as core real estate investment portfolios felt muted economic growth and higher interest rates in 2016, according to a recent report issued by LaSalle Investment Management's research and strategy team.
The researchers say, many of President Trump's proposed policies could strengthen the US economy and real estate market, but so far little has changed for investors. And although few signs indicate any sharp improvements, the experts also see little reason to expect a downturn over the next few years.
Unlike other asset classes, for example, which experienced a “Trump Rally” followed by some rough patches, real estate prices have held steady since November.
“Real estate tends to lag the broader economy,” Jacques Gordon, global head of research and strategy at LaSalle, tells GlobeSt.com. “It looks at what is going on in the broader economy, waits, and then acts.” The stock market may have gotten a temporary boost , “but real estate is not an asset class that regularly 'pops.'” That aspect of the market is fine with most investors, who typically expect real estate to generate income and stability.
And unlike the positive earnings surprises by a wide variety of US companies in the first quarter, the real estate sector has been relatively quiet. Nonetheless, we expect real estate growth to steadily trend upwards, as real estate reacts differently to these forces than stocks and bonds and is a good place to ride out the turbulence.”
Additional findings by LaSalle include:
- A reduction in the top marginal corporate tax rate could boost US growth and demand for real estate. Corporations with a cash surplus and low debt could make significant investments again in the event of a corporate tax reduction.
- President Trump's promise to fix US infrastructure has seen little follow through, though if enacted could provide strong fiscal stimulus that may produce direct benefits to real estate.
- A renegotiation of trade agreements could have negative impacts on real estate, as increased tariffs could lead to product shortages, higher inflation, reduced warehouse demand and disrupt supply chains. The administration is addressing NAFTA first and has opted for negotiation rather than withdrawal.
CHICAGO—The election of Donald Trump to the presidency caused some uncertainty as people tried to figure out in what direction this unconventional politician would take the country. The election also coincided with a slowdown in real estate demand and returns in late 2016 and into early 2017, as core real estate investment portfolios felt muted economic growth and higher interest rates in 2016, according to a recent report issued by LaSalle Investment Management's research and strategy team.
The researchers say, many of President Trump's proposed policies could strengthen the US economy and real estate market, but so far little has changed for investors. And although few signs indicate any sharp improvements, the experts also see little reason to expect a downturn over the next few years.
Unlike other asset classes, for example, which experienced a “Trump Rally” followed by some rough patches, real estate prices have held steady since November.
“Real estate tends to lag the broader economy,” Jacques Gordon, global head of research and strategy at LaSalle, tells GlobeSt.com. “It looks at what is going on in the broader economy, waits, and then acts.” The stock market may have gotten a temporary boost , “but real estate is not an asset class that regularly 'pops.'” That aspect of the market is fine with most investors, who typically expect real estate to generate income and stability.
And unlike the positive earnings surprises by a wide variety of US companies in the first quarter, the real estate sector has been relatively quiet. Nonetheless, we expect real estate growth to steadily trend upwards, as real estate reacts differently to these forces than stocks and bonds and is a good place to ride out the turbulence.”
Additional findings by LaSalle include:
- A reduction in the top marginal corporate tax rate could boost US growth and demand for real estate. Corporations with a cash surplus and low debt could make significant investments again in the event of a corporate tax reduction.
- President Trump's promise to fix US infrastructure has seen little follow through, though if enacted could provide strong fiscal stimulus that may produce direct benefits to real estate.
- A renegotiation of trade agreements could have negative impacts on real estate, as increased tariffs could lead to product shortages, higher inflation, reduced warehouse demand and disrupt supply chains. The administration is addressing NAFTA first and has opted for negotiation rather than withdrawal.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
