Volatility spurred by the current tax, regulation and tariff regimes could yield opportunities for well-positioned industrial and multifamily assets, according to an analysis authored by Transwestern executive managing director of research Hans Nordby.
“We believe growth is the natural state of the U.S. economy and there will be rent and value gains on top of good investment opportunities,” said the analysis.
Real estate may provide both an inflation hedge and value stability amid tariffs because it has long-term operating income attributes that resemble stock equity markets and steady yields similar to bonds, according to the report. Strategic industries and those that are more complex appear to be better positioned for expansion, including pharmaceuticals, computer chips, autos, as well as steel and energy, said Transwestern.
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“We have already seen indicators of onshoring, country of origin diversifications, and supply chain shifts in anticipation of tariffs and anti-globalization sentiment as risk mitigation strategies,” the report said.
If manufacturing activity increases, Transwestern predicts benefits for the industrial and multifamily sectors, especially in regions with labor force growth and pro-business policies. Existing properties may be purchased at a discount to replacement costs, if further noted. Industrial absorption could increase as demand grows through the supply chain. Meanwhile, job and economic growth, coupled with the country’s housing shortage and high cost of home ownership, support apartment demand.
In addition to industrial and multifamily, the healthcare sector has strong demand prospects. Metropolitan areas with exceptional demand drivers, such as above-average population growth, especially from domestic migration, are also expected to experience strong demand. Markets with good potential in either high or low tariff environments include the so-called Texas Triangle that encompasses Houston, Dallas and Austin/San Antonio, Nashville, Phoenix, Raleigh and Charlotte, according to the report.
“These markets have demonstrated strong growth demand since 2019,” Transwestern said.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
