T
he commercial real estate sector is poised for a resurgence under President Donald Trump's leadership, with CBRE Group Inc. (NYSE:CBRE) likely to outperform the S&P 500. Despite warning signs, CBRE has consistently outperformed the market, rising by +300% over the past decade compared to the S&P 500's 200%. The stock has also excelled in recent years, with a 1-year return of +54% versus the S&P 500's 17%.

    Several policy shifts are expected to favorably impact the CRE sector. Elon Musk's directive for federal workers to return to office full-time will increase demand for federal leases, while large corporations like Amazon have also implemented stricter working-from-office policies. The new administration's tariffs on imports from Mexico, Canada, and China will drive up construction costs, making existing real estate more valuable.

    The withdrawal of the US from the Paris Agreement will reduce compliance requirements and bureaucracy in the CRE sector. These tailwinds come at a time when interest rates are expected to decrease, according to the Fed dot plot, which should pull valuations up. With CBRE generating most of its revenue directly or indirectly from commercial real estate, it is well-positioned to benefit from these trends.