Post Trump election changes will undoubtedly emerge, however economic momentum and positive demographics should sustain healthy and positive real estate fundamentals.
These prospects are bolstered by the coming reduction of gridlock on Capitol Hill as both houses of Congress and the White House come under a single party. This will support the establishment of fiscal policy, including a new budget and an increase of the debt ceiling when needed.
In addition, the potential of reduced taxes, increased infrastructure spending and deregulation could give the economy a boost over the short term. While more rapid economic growth could spark inflationary pressure and push interest rates higher, the acceleration could also generate more jobs and stronger wage growth, both positives for the commercial real estate sector. Stable 5% unemployment and 5.5 million unfilled job openings point to a tight labor market and prospects of 2.0 – 2.5 million new jobs over the next year.
Barring a significant unanticipated event, these positive drivers will be sustained into the coming year, supporting commercial real estate demand, tight vacancies and sturdy rent growth.
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