How a Trump Administration May Impact NYC Commercial Real Estate

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Well before Donald Trump was ever involved in politics, he was famous for his powerful role in real estate, and his name has been synonymous with the industry as it is displayed on prominent buildings all around the world. With his new role in the political realm, many people within the real estate industry are wondering how Trump as, President of the United States, may influence and mold the real estate market, globally, nationally, and especially in his hometown, here in New York City.

In this article, we’ll explore the impact that an incoming President, Donald Trump, may have on commercial real estate markets, and more specifically on commercial office space Manhattan in NYC.

Housing for the Rich and Poor

In his campaign, Trump proposed tax breaks for wealthy Americans, which could strengthen the luxury real estate market. However, there are concerns that this could reduce the amount of affordable housing that could put vulnerable Americans at risk, as well as fair housing rules and housing subsidies. However, Trump has always been pro-business, and his campaign promoted eased government regulations that could drive infrastructure improvement and construction projects.

Possible Impacts on Office Space Manhattan

Not only does a Trump presidency stand to impact the residential housing market, but also the commercial one. According to a Shearman & Sterling LLP report, many economists believe that Trump’s administration will bring higher interest rates, tax cuts, and construction spending to New York City. The report points out that the Trump administration will likely preserve parts of the tax code that are in the favor of real estate developers. However, Trump’s strong stance on immigration may cut the supply off low-cost labor and limit the number of international investors interested in supporting U.S. projects.

Construction, Manufacturing, and Policy

In the past, Trump has supported policies that favor the construction industry, including improved infrastructure across the U.S. In his victory speech, Trump proclaimed, “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”

Trump has also indicated that he supports the growth of domestic manufacturing, which would require more commercial real estate properties like warehouses, factories, and office space. But there are concerns that limited immigration may affect the construction industry and make new building projects more expensive to complete.

Tax Reform Under Trump

Forbes contributors have written extensively about discussions regarding tax reform in the Trump administration that will likely impact the commercial real estate industry. The like-kind exchange tax deferral that commercial real estate practitioners have been used to, could end in favor economic growth. Trump has also payed close attention to depreciation as a way to avoid taxes, which could come up in larger discussions about the tax code in the future.

The Role of Inflation

Another issue that has come up in discussions about Trump’s possible impact on the real estate market is inflation. With tax cuts and more spending on infrastructure, inflation is likely to rise. This could mean higher rental prices, which would impact business looking for office space Manhattan. Inflation may also be impacted by Trump’s new international trade policies and labor restrictions.

Foreign Investments in Real Estate

Experts also anticipate that foreign investments in commercial real estate may decline once Trump is in office. This speculation is due to expected higher interest rates, stricter immigration laws, and political uncertainty. Open dialogue with leaders of other nations may help to secure foreign investments and keep the market strong.

Industry Professionals Most Impacted 

While certain professionals may be worried about what a Trump presidency may bring to the real estate market, others couldn’t be more excited for it.  Some real estate developers look forward to what Trump’s administration may do to help their businesses, for example, while others fear the impact of increased inflation. Overall, both the commercial real estate industry and the construction industry have been fairly optimistic about how a Trump presidency could help their businesses.

Uncertainty May Lead to Hesitation

Economists say that political uncertainty directly impacts the economy, which affects commercial real estate indirectly. When investors are uncertain about the future of policy, they tend to delay making significant decisions until new details become available. And when capital markets feel a shock to the system, construction financing can be more difficult to obtain. This can discourage investment and real estate growth in the short-term, but pick up rapidly once new favorable policies are made public.

For Your Conference Room Rental NYC Needs

Finding rental office space Manhattan can be a challenge, especially in light of current events. But since Trump has indicated that he still plans to spend a significant amount of time in New York, demand for office space may very well increase.

NYC Office Suites provides convenient and affordable conference room rental NYC to help you connect with the people and businesses you need to make a difference. Contact us today at 800-346-3968 while space is still available to facilitate planning and strategizing meetings that will prepare you for whatever a Trump presidency brings.

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