The volatility in the new administration is starting to wear on investor sentiment. While many real estate professionals were hopeful that the Trump presidency would mean business-friendly legislation, the recent events—like the Comey testimony—have investors concerned. Brandon Carrillo, a principal at Lee & Associates, says that investors have taken a pause while they wait to see exactly how some of the issues in the market will play out. To find out more about how the administration has affected investor sentiment and the long term effects, we sat down with Carrillo for an exclusive interview.
GlobeSt.com: Have you seen a change in investor sentiment?
Brandon Carrillo: We are seeing investors press the pause button to see how things play out. It feels like every day, something is happening in the news, most recently with the Congressional shooting and Comey testimony. There is concern about what is going to play out with this administration. So much time has been tied up with these conversations, and there has been no real legislative change. There still hasn't been any new legislation in regards to healthcare, infrastructure spending and so on. My clients want to see infrastructure spending and a lot of contractors are concerned about how these things are going to take form. We haven't seen that yet.
GlobeSt.com: Is this a recent change, or have you seen investor sentiment decline since the election?
Carrillo: The conversation during the election, my clients really assumed that it Hillary Clinton would become president and there would be another four years of Obama's policy. Those conversations changed dramatically when Trump was elected, because there was an assumption that there would be more business-friendly policy. I immediately had clients wanting to spend money and find investment product. Now, in the recent months, there has been a souring. Investors really don't understand how this is going to play out because it is such a non-traditional situation. It is unusual to have a president tweet information in regards to policy and how those tweets are viewed globally. My clients want to know what is actually going to get passed, especially with the house and senate. Yet, a lot of the policies are not getting passed, and the things that he wanted to push through have been stalling. The question now is whether or not he is going to get anything through these two houses, and what the repercussions are going to be if he can't. For that reason, a lot of investors have developed a wait-and-see approach.
GlobeSt.com: Are investors merely taking a pause, or has this resulted in changes to acquisition and investment strategy?
Carrillo: My investment clients are still going to take a great deal in a great market, if they can find it. That is never going to change. However, for the clients that are running a business, those clients want to see how things play out. A lot of people believe that we are in one of the final innings of this run up, and no one wants to pay at the top of the market. Some investors realize that, and are trying to factor that into their offers, but some are just so flushed with cash and they want to get that money out.
GlobeSt.com: You focus on industrial product. Has the rhetoric around trade policy had an affect on investor sentiment?
Carrillo: When Trump was first inaugurated, trade agreements were a concern because some of the rhetoric that he was using was pretty strong. Once he met with the Chinese leaders and there was a lot of positivity coming out of that meeting, a lot of shippers and warehousing companies that operate out of the ports felt much better after that meeting.
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Kelsi Maree Borland
