Don’t Worry, CRE Firms Not Likely To Come Under Scrutiny On Trump's Twitter Podium
Since his upset victory last November, President-elect Donald Trump has chosen Twitter as his personal podium.
In the past few weeks, Trump has taken to Twitter to criticize multinational companies for taking jobs overseas, pronounced top media outlets “fake news!” for reporting stories that paint him in a negative light and condemned A-list celebrities for speaking out about him mocking a disabled reporter. But commercial real estate companies haven't come under fire — and as economic beneficiaries rather than economic drivers, they're not likely to.
Most of Trump’s Twitter rants support his political agenda and align with policies he’s outlined on the campaign trail, such as his push for job creation to stimulate further economic growth or infrastructure spending.
“Very similar to what he did during the campaign where he would really dictate the issues regarding his opponents, he’s very much doing the same in terms of the economic issues when it comes to job creation,” BDO Corporate Real Estate Advisory Services Practice consulting managing director Tom Stringer told Bisnow. “He is setting the stage and communicating directly to the customer base of these companies, staking out a position and really compelling them to respond in some fashion.”
This has been the case for companies like car manufacturers General Motors and Mercedes-Benz, and extending to big-box retailers like Walmart—all of which do business and own manufacturing facilities outside of the country.
However, unlike multinational companies that are drivers of economic growth in both foreign and domestic markets, the commercial real estate industry is a byproduct of the economy, CoStar economist Hans Nordby told Bisnow, and would have little influence on job creation, GDP growth and all those economic factors that are driving Trump's policies. For example, Nordby said CRE firms are only going to build a high-rise office building if the economy or demographics call for it.
“It’s not like I’m going to locate my 50-story office building in rural Idaho so you [can] give me a tax rebate for 50 years,” Nodby said. “Nobody would do that because there aren’t a lot of office operations you can staff with rural Idahoans. Whereas an auto plant can pick any place in the country and say ‘give me a deal.’”
The commercial real estate investor “reacts to the opportunities within a geography, rather than creating the opportunities in the geography,” Nodby said, so it’s very unlikely these firms will come under scrutiny from the president-elect on Twitter.
However, those multinational companies on Trump’s radar will need to prepare themselves to conduct negotiations publicly with Trump and his administration, Stringer told Bisnow. What used to take place in the privacy of a company’s offices will now take place in the public eye, and it has become a very effective tool for Trump.
Several major corporations have backtracked on plans to open or expand facilities overseas following criticism from Trump on Twitter, shifting their investments to fund expansions at their domestic plants, stimulating job growth in often rural markets.
“Corporate C-suite executives of all shapes and sizes are going to have to prepare for ... a new tool that they’ll have to respond to,” Stringer said. “It touches not only the company and the media, but it touches their customer base. It touches the public directly in real time … and that’s fairly unique.”