A
second Trump presidency is expected to impact US commercial real estate (CRE) through policy changes. In the short term, CRE's relative pricing to bond yields will likely have a greater influence on values.
Key takeaways include:
Looser fiscal policy may boost occupier performance in the near term due to stronger GDP growth. However, tariffs could lead to stockpiling, benefiting warehousing demand. On the other hand, curbed immigration may increase costs for hospitality, manufacturing, and construction sectors, while increased tariffs will affect industrial and retail segments in the long run.
Our forecast for a higher 10-year Treasury yield will negatively impact CRE investment performance. To maintain an appropriate risk premium, CRE property yields would need to rise gradually relative to 10-year Treasuries.
