How Trump’s Return To Office Reset Commercial Real Estate In 2025

President Donald Trump didn't waste any time wading into commercial real estate in his second term, signing a two-paragraph executive order sending federal workers back to the office just hours after being sworn in.  

Beyond the return-to-office mandate's immediate implications for commercial real estate, the move signaled something more abstract: A real estate developer and investor was back in the White House. 

“The golden age of America begins right now,” Trump told the country after taking the oath of office for the second time. 

Trump’s Day 1 executive orders set the stage for a year when a cascade of tariffs, policy shifts and organizational overhauls have sometimes inspired hope across commercial real estate and other times instilled fear.

Over the past year, Bisnow has chronicled the administration’s transformative policy moves, their immediate impacts and the potential knock-on effects that are yet to come. It’s been a busy year. 

DOGE, Gone But Not Forgotten 

Trump laid out a commitment to dismantle the federal bureaucracy on the campaign trail. But it was Elon Musk, the world’s richest man, who was at the time calling himself the “first buddy,” who Trump tapped to take a chainsaw to the administrative state. 

Musk pledged to cut at least $2T from the federal budget through his Department of Government Efficiency, but the tech magnate began walking back that number almost as soon as he arrived in Washington, D.C.  

Still, Musk shook up the federal bureaucracy with deep staffing cuts and a seeming embrace of the tech world’s motto of “move fast and break things” that sowed confusion in Washington and beyond. 

DOGE briefly explored selling the FBI headquarters after it said it identified more than 440 properties to offload. The General Services Administration, the agency that manages the federal real estate footprint, walked back most of those plans.

By the end, and after several downward revisions, DOGE said it saved taxpayers roughly $53B by canceling contracts and leases. An analysis by Politico found that DOGE’s savings from January through July were closer to $1.4B.

The GSA has shed some 6M SF of owned and leased office space across the country but still leased roughly 171M SF at the end of October, according to Avison Young.  

Musk walked away from the high-profile campaign in June, and DOGE officially disbanded as an agency in November. But the space-saving mission lives on, and there’s an expectation around Washington that the GSA’s effort to shed offices will accelerate in 2026. 

Tariffs, Trade’s Reset Button

A large cohort of investors, analysts and economists assumed — or hoped — Trump was bluffing on the campaign trail when he promised a sweeping tariff regime. 

The expansive tariff package the president announced on Feb. 2 dispossessed them of that notion — and kicked off a trade war that has defined the macroeconomic landscape.

The cost of new construction, already strained, was pushed higher as new protectionist trade barriers were erected. Commercial real estate dealmakers got “major whiplash,” as one described it to Bisnow in March, as they tried to close deals amid on-again, off-again tariffs. 

There was quiet hope by the end of March that the president’s much-hyped “Liberation Day” speech would break through the growing uncertainty. Instead, the White House unveiled a sweeping reciprocal tariff regime imposing new fees on imports from practically every country, spooking markets and solidifying tariffs as the administration’s primary lever for trade negotiations. 

The surprise of Liberation Day led to a brief slowdown in both investment sales and demand for industrial space, but firms have since largely plowed forward. Despite widespread uncertainty, dealmaking in 2025 has surpassed expectations and propelled brokerage earnings.

But tariffs have been harder to swallow across the development landscape, where tariff-driven hikes were showing up in pricing just days after Liberation Day and contributed to a 3.5% increase in construction input prices by September. Coupled with pandemic-era increases, the price of construction inputs is up more than 43% since February 2020, according to the industry group Associated Builders and Contractors. 

Trump’s authority to impose many of the sweeping tariffs is being challenged in the Supreme Court, but the trade regime has already dented development as more projects are delayed or abandoned. If they are overturned, there’s also an expectation that the White House would use different presidential powers to keep at least some tariffs in place.  

Big, Beautiful Tax Breaks

Presidents typically only get one legacy-defining tax bill. But Trump’s path to a second term gave him a rare chance to extend and expand on legislation he worked to pass eight years earlier. 

Trump seized the opportunity to build on top of the Tax Cuts and Jobs Act of 2017, christening his 2025 policy package as the One Big Beautiful Bill Act amid a monthslong debate about what exactly the legislation would look like. 

Early proposals — including a change to a popular corporate tax deduction, a provision that came to be called the revenge tax and steep cuts to federal housing aid — sent real estate lobbyists scrambling but were ultimately gone by the time Trump signed the bill to fanfare on July 4. 

Proponents herald the reform package, one of the largest tax cuts in history, as fuel for economic growth. Critics complain it’s a handout for corporations and the wealthy. The nonpartisan Congressional Budget Office estimates it will add roughly $3.4T to the U.S. deficit. 

For the commercial real estate sector, it was more what was on the inside of the bill that counts. 

Opportunity zones not only became permanent as part of the law but were also updated to redefine which census tracts qualify around the country in an attempt to better target underinvested areas. 

The Low-Income Housing Tax Credit, a widely used affordable housing incentive, also became a permanent fixture of the tax code, while the legislation loosened capital requirements for LIHTC benefits.

The One Big Beautiful Bill is also a springboard for the White House’s effort to boost domestic manufacturing. It extends and expands a widely used piece of the tax code that lets companies fully deduct the price of some large purchases in a single tax year rather than over time.  

Full bonus depreciation, as the tactic is known, is expected to spur new advanced manufacturing construction and has already led to a wave of investment in equipment-heavy real estate sectors like gas stations, where interest is at a fever pitch, Northmarq broker Jim Ceresnak told Bisnow in October.

Winning The AI Arms Race 

The day after being sworn in as president, Trump gathered a trio of tech billionaires at the White House to announce Stargate, a joint venture promising to invest up to $500B into infrastructure to support the rise of artificial intelligence.  

Since the January meeting, Trump has continued to try to clear the path for the rapid development and adoption of AI. The administration published its AI Action Plan in July, laying out a wide-ranging set of proposals meant to help the U.S. win the “race to achieve global dominance in artificial intelligence.” 

The nearly 100-point plan includes recommendations for export controls and limits on how the tech can be regulated along with a proposal to standardize the permitting process and expedite federal environmental reviews for the development of new data centers and power plants.  

Another executive order in December directs federal agencies to preempt or challenge state laws the administration thinks are standing in the way of AI development. The directive is likely to lead to lawsuits, but attorneys for Gibson Dunn wrote in an analysis that the federal government will face an uphill battle in court.

While the administration looks to clear the legal path for AI, the president’s focus on fossil fuels is threatening to hold back development. Trump has encouraged tech firms to use coal power for their data centers while gutting Biden-era clean energy incentives around which developers had already built development strategies. 

Nearly 2,000 U.S. power projects were canceled in 2025, 93% of which were for clean energy, according to a December report from energy transition tracker Cleanview.

Weighing In On Interest Rates

It would be easy to forget that Trump gave Jerome Powell his job in the top spot at the Federal Reserve in 2017. 

The president and his allies spent much of the year lambasting Powell and the central bank, with Trump first wading into Fed policy just two months after taking office, posting on his social media platform that Powell and the Federal Open Market Committee should “do the right thing” and cut rates.   

But the first bit of monetary easing in Trump’s term didn’t come until September. In the interim, Trump and other administration officials excoriated Powell for holding rates flat, fueling rumors that the president might set off a power struggle by trying to fire the chairman of the independent central bank.

The administration also took aim at a Fed governor. 

Bill Pulte, the director of the Federal Housing Finance Agency, took to X in early August to accuse Fed Governor Lisa Cook of mortgage fraud. Pulte spent weeks posting about Cook, and the Department of Justice opened an investigation in early September. 

By then, the president had already fired Cook, but she refused to leave, saying Trump lacked a legal basis for her removal. The Supreme Court is set to hear arguments over the standoff in January.

Fed officials are trying to balance a dual mandate of maximum employment and price stability as the White House throws new variables, from tariffs to government shutdowns, into the economic mix. 

Fed governors are split on the path forward, with December’s 9-3 vote to cut the federal funds rate the most divided of the current cycle and the last decade.

Some Fed watchers see the move to oust Cook as an effort from the White House to wrest political power from the independent institution. Stephen Miran, a Trump appointee who joined the Fed in September, has twice voted for a 50-basis-point cut when a 25-point trim ultimately passed. 

Powell’s term as chairman ends in May — though he could choose to stay on as a Fed governor through 2027 — and the president has already said he’s picked a replacement. During a primetime speech on Dec. 17, Trump promised that the next chairman would be “someone who believes in lower interest rates, by a lot.”

More Unfinished Business 

Trump’s high-profile immigration crackdown has reverberated across the construction sector, with 35% of contractors saying in August they had been impacted by rising enforcement actions. 

Labor availability is expected to remain a key pressure point for the sector in the year ahead as the administration tries to fulfill a campaign promise to “have the largest deportation in the history of our country.”

Amid the immigration crackdown, the president also rolled out a new path to permanent U.S. residency for wealthy foreign investors. The Trump “gold card,” originally announced in February and formally rolled out this month, offers a permanent visa in exchange for a $15K nonrefundable fee and a $1M gift, as the White House is calling it, to the federal government. 

The new path to a visa threatens to sap interest in the EB-5 program, a popular source of financing that lets foreign nationals invest in American development projects in exchange for legal residency status. 

In August, Trump also signed an executive order explicitly stating that 401(k) retirement accounts could hold private equity, real estate, cryptocurrency and other alternative assets, a move that money managers had been lobbying for to unlock access to a $12T capital market.  

The Trump administration also spent the year considering plans to release Fannie Mae, Freddie Mac and the other government-sponsored enterprises from federal oversight. 

Trump’s potential privatization of the mortgage market cornerstones has been rumored since even before he was sworn in for a second term. But the idea became enough of a potential reality that Pershing Square CEO Bill Ackman, one of the largest private investors in Fannie Mae and Freddie Mac, hosted an event on X in November during which he urged a “baby step” approach. 

The privatization debate is likely to continue in 2026, with Bloomberg Intelligence warning this month that an unwinding of oversight would take far longer than many investors expect.