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Report: U.S. Commercial Real Estate Market Yet to Feel Significant Change under New Administration

President Trump’s policy proposals are undergoing lengthy legislative alterations, delaying discernible shifts in the commercial real estate landscape

CHICAGO (May 24, 2017) – President Donald Trump’s election coincided with a slowdown in real estate demand and returns in late 2016 and into early 2017, as core real estate investment portfolios felt muted economic growth and higher interest rates in 2016, according to a recent report issued by LaSalle Investment Management’s Research & Strategy team.

To download the full report, please visit:

To frame the report, it is important to note that the largest owners of core commercial real estate in the US are institutional investors, including tax-exempt pension funds, which together own $534 billion of well-leased office, industrial, retail, apartment, and hotel properties.

The report reveals that many of President Trump’s proposed policies could be positive for the U.S. economy and real estate market, but so far little has changed for investors. At this early stage, few signs indicate a sharp improvement in the real estate market, while there is little reason to expect a downturn over the next few years.

Unlike other asset classes which experienced a "Trump Rally" followed by subsequent choppiness, real estate asset prices have generally held steady from November through mid-May.

Jacques Gordon, Global Head of Research and Strategy at LaSalle, said: “Real estate lags the broader economy and a boost in future growth will likely take a year or two to translate into tangible real estate demand. Unlike the positive earnings surprises by a wide variety of U.S. companies in the first quarter, the real estate sector has been relatively quiet. Nonetheless, we expect real estate growth to steadily trend upwards, as real estate reacts differently to these forces than stocks and bonds and is a good place to ride out the turbulence.”

Additional findings by LaSalle include:

  • A reduction in the top marginal corporate tax rate could boost U.S. growth and demand for real estate. Corporations with a cash surplus and low debt could make significant investments again in the event of a corporate tax reduction.
  • President Trump’s promise to fix U.S infrastructure has seen little follow through, though if enacted could provide strong fiscal stimulus that may produce direct benefits to real estate.
  • A renegotiation of trade agreements have potential negative impacts on real estate, as increased tariffs could lead to product shortages, higher inflation, reduced warehouse demand and disrupt supply chains. The administration is addressing NAFTA first and has opted for negotiation rather than withdrawal.


Property sector insights include:

  • Apartments: President Trump’s policies have the potential to impact both apartment demand and supply, as well as financing. On the demand side, U.S. household growth depends on legal international migration to the United States. Trump has proposed changes to the U.S. legal system that could include caps that could negatively impact demand, especially in gateway cities that depend on skilled immigration. Conversely, if a merit-based immigration policy is implemented, which Trump has indicated he supports, it could be a demand boon.
  • Retail: Despite higher consumer confidence, there has not yet been a major spike in retail sales. The Trump Tax Plan announced on April 26 excludes the proposed 20% Border Adjustment Tax, so a major threat to retail sales is currently not expected to be enacted.
  • Warehouse/Industrial/Logistics: While there have been no major changes to U.S. trade policies to date, a decline in imports due to higher tariffs would be a negative for retail sales and therefore warehouse demand. Although import restrictions would lead to increased domestic production, the overall impact of increased tariffs on warehouse demand would be negative.
  • Office: Office buildings are the property type most exposed to a general slow-down in economic growth that could result from any specific adverse legislative or regulatory change (not our expected base case). With the assumption of steady economic growth in mind, it’s likely there will be specific regional impacts resulting from potential domestic program cuts in the federal budget.


About LaSalle Investment Management
LaSalle Investment Management is one of the world’s leading real estate investment managers with approximately $58 billion of private and public equity and private debt investments under management of all LaSalle Investment Management affiliates. LaSalle Investment Management’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle Investment Management affiliates sponsor a complete range of investment vehicles including separate accounts, open- and closed-end funds, public securities and entity-level investments. LaSalle Investment Management affiliates are wholly-owned, operationally independent sub­sidiaries of Jones Lang LaSalle Incorporated (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit

This press release does not constitute an offer to sell, or the solicitation of an offer to buy any interests in any product offered by LaSalle Investment Management, Inc., or for the advisory services of LaSalle Investment Management, Inc., in any jurisdiction where prohibited by law or where contrary to local law or regulation. Any such offer to invest, if made, will only be made by means of a private placement memorandum. Past performance is not indicative of future results.

Matt Schuler