11/18/2016

The Mixed Bag of a Trump Presidency

CALABASAS, CA--That’s a question that is, for very good reason, on everyone’s mind in the industry. In a special report, Marcus & Millichap sees a mixed bag of outcomes in the months ahead. It is important to note here that the report focuses on industry issues and none of the more controversial social issues associated with the campaign. Here are just some highlights from “Special Report: Trump Election Investor Implications”:

On the plus side of the ledger, M&M predicts that Congressional gridlock will ease, increasing “the probability of action” on many issues. That would include an increase in capital going to infrastructure spending, bringing with it a “potential for economic growth and job creation.”

The report also sees good coming out of the possible repatriation of overseas capital. The “proposed temporary tax incentive for corporations to repatriate overseas capital could boost domestic corporate investment,” says M&M. Further, a reduction in taxes would favor investors, depending of course on the details of the tax overhaul, for instance, “potential changes to carried interest may affect developers and fund managers.”

And there are other concerns, beyond carried interest, among them rising inflation. The report sees the possibility that “deregulation, infrastructure spending and reduced taxes could spark economic acceleration and increase inflationary pressure.” Not helping matters would be the possibility of rising interest rates.

In all, Marcus & Millichap sees job creation, wage growth and “a generally limited development pipeline” as positive drivers of the commercial real estate industry in months ahead.

Of course, we all have to wait and see.

To read the full article, please click here.

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