Real Estate Journal — 2017 Forecast — January 27 - February 9, 2017 — 5C
www.marejournal.com
M id A tlantic
R eal E state L aw
By Nicholas Racioppi, Jr., Riker Danzig Scherer Hyland & Perretti LLP Possible effects of the Trump presidency on the real estate industry
O
f course, it is impossi- ble to know how Don- ald Trump’s presiden-
ture spending would tend to reduce the supply of available construction workers. Sec- ond, significant deportations or a clamp down on immigra- tion would reduce the pool of labor available for construc- tion and real estate devel- opment. Such supply con- straints could tend to drive up labor costs and constrain real estate development. Further, although the lux- ury residential real estate market may thrive due to tax cuts on higher incomes as well as increased wealth arising from economic expansion, some commentators have
speculated that demand for luxury properties could fall if foreigners, who make up a large percentage of buyers in that segment of the U.S. market, perceive the Trump administration as hostile to those from certain regions, such as the Middle East. In addition, commentators have noted that Mr. Trump’s pro- tectionist policies could have a chilling effect on foreign investments in commercial real estate, particularly from China and Arab nations, that have in the past, but may not in the future, see the U.S. real estate market as a safe place
to invest their money. Of course, any effects re- sulting from Mr. Trump’s policies would occur in com- bination with other economic trends, making forecasting evenmore of a guessing game. Interest rates are always a key factor relative to real es- tate development, and based on current growth trends many economists predict that interest rates will increase in 2017, which may also tem- per capital investments in real estate. At this point in time, the one thing that the commentators agree on is that no one can forecast with
any real certainty what the future holds for real estate development under a Trump administration. Nicholas Racioppi, Jr. is the Chair of the Real Estate Group at Riker Danzig Scherer Hyland & Perretti LLP, with offices in New Jersey and New York. He has considerable experience in all areas of commercial real estate, particularly in the acqui- sition, leasing, develop- ment, land use and sale of commercial and industrial properties, as well as in real estate litigation. n
cy will affect e i t he r t he commercial or residential real estate i n d u s t r y . However, in view of his stated goals, and with Re- publican ma-
Nicholas Racioppi, Jr.
jorities in both houses of Con- gress increasing his ability to translate those goals into law, possible outcomes have emerged. In general, based on our review of a number of commentaries, the pundits are cautiously optimistic that Mr. Trump’s business friendly proposals are likely to stimu- late real estate investment activity. Many commentators have noted that the following fac- tors, which could flow from the implementation of Mr. Trump’s policies, may result in increased capital spending and real estate demand: • Increased monies avail- able for real estate invest- ment due to corporate and personal income tax cuts; • Infrastructure spending that could lead to increased jobs and development; • Repatriation of income by U.S. companies due to domes- tic corporate tax cuts spurring investments in the U.S.; and • Increased development/ lending due to the reduction of environmental and bank- ing regulations, including the Dodd Frank Act. However, the prospect of an energized real estate industry is tempered by concerns about how Mr. Trump’s immigra- tion and trade policies may affect the economy. On the one hand, there is concern that tariffs discussed by Mr. Trump could lead to trade wars, which would likely de- crease GDP as well as spend- ing and demand in the real estate market. On the other hand, there is concern that Mr. Trump’s immigration policies may drive up the cost of labor and chill foreign investments in real estate. Many surmise that Mr. Trump’s policy of increased federal infrastructure spend- ing, coupled with a reduction of immigrant labor, may result in increased develop- ment and construction costs. First, increased infrastruc-
REAL ESTATE LAW
The main advantage to our real estate law practice? Our knowledge of the landscape.
Riker Danzig earned a national ranking in Tier 2 for Land Use and Zoning Law by U.S. News - Best Lawyers on its “Best Law Firm List” for 2017. U.S. News - Best Lawyers awarded Riker Danzig a Tier 1 ranking in New Jersey
Our comprehensive understanding of commercial real estate law and the governmental landscape in the northeast comes from practicing in this region for over 130 years. Our real estate attor- neys work together with our corporate, environmental, lending and litigation practice groups to provide for all of our clients’ needs. Negotiating contracts of sale and options on behalf of sellers and purchasers of improved and unimproved real property Representing retail, commercial and industrial developers, landlords and tenants All aspects of major redevelopment projects Sale-leaseback transactions Obtaining zoning, planning and other developmental approvals and permits
for Real Estate Law and Real Estate Litigation.
1031 tax-free exchanges
Representing borrowers and lenders with loans secured by real property Brownfields Real estate litigation and arbitration matters Condemnation proceedings
To find out how we can help your business, contact Nick Racioppi at 973.451.8492 or nracioppi@riker.com.
A T T O R N E Y S A T L A W
See www.bestlawfirms.usnews/methodology.aspx for methodology. This advertisement has not been approved by the Supreme Court of New Jersey.
MORRISTOWN, NJ 973.538.0800
TRENTON, NJ 609.396.2121
NEWYORK 212.302.6574
WWW.RIKER.COM
Made with FlippingBook - Online catalogs