Only 20 days out from the presidential election, the CRE market is already anticipating changes that may come with the new administration. The Republican trifecta victory will substantially impact both the number of policy changes and how big the changes will be, said John Chang, national director of research and advisory services at Marcus & Millichap.
He highlighted three focus points of the Republican campaign that could impact the CRE market:
- The renewal of the 2017 Tax Cuts and Jobs Act provisions that are scheduled to phase out or expire in 2025.
- The implementation of broad-based trade tariffs.
- Potential changes in immigration policies and the deportation of illegal immigrants.
The impact is most visible in the interest rate outlook since early October when betting odds began to favor the re-election of President Trump, said Chang. Since then, the 10-year treasury has climbed about 70 basis points, and the rise of interest rates puts upward pressure on the cost of CRE financing.
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