What the Next President Means for Commercial Real Estate Activity

Over the holiday I was thinking about what the change in administration will mean for deal activity next year. Especially since we’re coming out of a two-year period of the lowest amount of commercial real estate transaction activity since the GFC. With Trump coming back into office I think we’ll see several things:

• Tax Reform 2.0

• Opportunity Zones 2.0

• Pressure from the White House on the Fed to keep Interest Rates Low

• New FTC Commissioner that is much more M&A friendly

• Possible Easing of Financial Regulation

Additional tax reform will likely mean lower corporate taxes leading to increased economic activity. The opportunity zone program will be probably be refreshed, with enhanced incentives, new opportunity zone locations and extended deadlines for the recognition of deferred gains. This will create a new wave of opportunity zone related investment activity. (Belpointe OZ’s stock is up 10% since the election.)

The administration will keep pressure on the Fed to keep rates low similar to his last term. Whether the Fed will bend to that pressure remains to be seen but I think it’s unlikely we’ll see a large increase in rates, at least in the short term.

We’re going to see a new FTC Commissioner come in that will be more deal friendly. While this is more a direct benefit to M&A than commercial real estate we should see a greater movement of capital overall throughout the economy, some of which will find it’s way to CRE.

We’ll also see a general easing of regulation on all fronts which will promote economic activity that will trickle down to CRE activity. A lot of CRE capital has been sidelined the last two years because of high interest rates, regulation and uncertainty over the election. I expect that we’ll see a rapid uptick in deal volume in Q1 that will last through the rest of the year.

TLDR: 2025 will be a busy year.

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