What Trump’s Election Could Do for Commercial Real Estate

Now that the election results are in and our country’s president and congress makeup has been determined, we can look forward to a further period of growth and opportunity in commercial real estate.

Trump’s acceptance speech

It was reassuring to hear President-elect Trump’s acceptance speech right after the election results were in. He immediately highlighted the need for more government spending:

“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.”

For those unfamiliar with American politics, the idea that a Republican president would put more government spending at the top of his agenda is anathema to the party’s traditional “smaller government” stance. Unfortunately, as Milton Friedman said, “We are all Keynesians now.”  While a smaller federal government with a smaller budget would be ideal, if increased growth and prosperity results from more of this type of spending (rather than the prior eight years of transfer payments) it should improve the outlook for our country.

In case you nodded off in your Economics 101 class, Keynesian Economics is the theory that the government should increase spending (and cut taxes) to stimulate a slow economy, and conversely, should cut spending (and raise taxes) when the economy is at risk of overheating.  Of course, that’s theory.

Nevertheless

The one thing that matters about what Trump said, is that he wants to actually develop and redevelop our infrastructure. That to me means that where ever that happens, the properties close to it will also rise in value or be a great redevelopment site as well. That translates into more opportunities for all.

Commercial real estate plays an important role in the U.S. economy. As new policies are written and legislation moves forward and as regulatory burdens are lessened, it will be good for the industry, your tenants, and the economy generally will benefit from fair and steady government policy that incentivizes growth.

We at Tower Commercial Mortgage are optimistic that the president-elect will develop and successfully advance a pro-growth agenda for all Americans. What is good for commercial real estate is good for our country!

Much success!