An early look at the president-elect’s impact on commercial real estate

As unlikely as it is, President Trump will be sworn in on Jan. 20, 2017, as our new president.

Like him or hate him, we all can expect drastic changes at the executive branch of our government. It would seem likely that the future President Trump will refine himself somewhat as he settles into his new role as leader of the free world. However, Donald Trump is what he is and that is not a dyed-in-the wool, lifelong politician. Whether it’s right or wrong, better or worse, what a dramatic change from the Washington status quo political rhetoric — and he hasn’t even gotten started yet.

So what impact has this unprecedented event had on the northern Nevada commercial real estate market? It’s obviously too early to tell, but certainly business has embraced the idea of Donald Trump running the country — equities markets have quickly zoomed to new record heights, and on the heels of highly incorrect predictions of faltering markets under Trump to boot. With business values up, credit frees up and new resources are available for business expansions. Some of those expansions will surely look to new western locations, and northern Nevada is at the top of the list. In general, business leaders we have spoken with remain upbeat and positive over the election results. Having a positive business leadership outlook always tends to stimulate business growth.

Among Trump’s proclaimed changes are several to the U.S. tax laws. He has mentioned several outright repeals, lowering this, raising that, cutting here, adding there, new tax brackets with new tax rates, and simplifying the tax code.

With no specific attention to real estate tax codes, certainly we will see proposals with adjustments to tax codes that will likely heavily impact real estate ownership, investing and possibly leasehold occupancy.

Until these proposals are fleshed out and debated on the floor of the House, real estate investors may be well advised to hold back a bit, to wait and see what the proposed new tax laws do to their real estate investment ownership business models.

On one hand, President-Elect Trump’s victory seems to have enlivened the business sector and accordingly the commercial real estate sector. On the other hand, proposed tax change policies still need to be drafted and debated. And the very least, they need to develop clear direction in order to avoid a potential cooling impact on real estate development and investment.

Tom Miller is the president of Miller Industrial Properties.