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Economists Say 2016 Presidential Race Will Impact US Markets, CRE


The 2016 presidential race is getting pretty heated. This election year has been momentous—with Hillary Clinton’s email scandal, Donald Trump’s raucous racial and gender slurs, and Bernie Sanders’ unyielding campaign during the primaries.

As the general election nears, economists tell Bisnow the presidential race will impact US markets and commercial real estate, especially once a new president is elected. Here's what experts had to say. 

Jay Rollins, managing principal at JCR Capital

JCR Capital Managing Director Jay Rollins

“First I’d like to say that I’m not endorsing or making a statement about any candidate, just looking at the effect each candidate will have on the real estate market.

I’ll start with Trump. The Trump candidacy brings a lot of uncertainty with it. That’s obvious to everybody. In general all markets—real estate and the stock market—do not like uncertainty, so we think that a Trump presidency would bring volatility to the market.

For us volatility is a good thing, there is more money to be made in volatile times because there is a larger separation of winners and losers. People will react more on emotion than on fact. You would also see liquidity. And another thing you have when some people have uncertainty is they tend to want to go to cash. I think you would see some selling going on.

Moving on to a Hillary presidency, I think you would see in the first six to 12 months a lot of sales. People would be afraid in the real estate business. You’d have much more status quo in terms of equity and in terms of the overall international market. But the middle market, the individual owners of real estate would be inclined to sell more rapidly in the first year out of fear that the capital gain laws, the 1031 laws would be changed. For Hillary, the market is going to fear tax increases, but an overall stableness in the economy and world view.

I think what happens in the election is going to (have a momentary effect) the first six to 12 months as a reaction, but that’s going to pass.” 

Ken McCarthy, Cushman & Wakefield chief economist


“While the presidential election will cause some degree of uncertainty in the near term, it’s unlikely to have a significant impact on the US economy’s performance. 

The US has powered through much uncertainty in this expansion and looks poised to do so again in the second half of 2016. In addition, despite the election uncertainty, the US is still a much more attractive location for global investors than most other developed nations where uncertainty (Brexit), weak economic performance (EU, Japan), and low or negative interest rates are making investors even more wary than they are here.

The US is still by far one of the most attractive options for global investors and will continue to attract capital.”

Ray Torto, Harvard lecturer and retired CBRE global chief economist

Ray Torto, Harvard Graduate School of Design lecturer

“Uncertainty leads one to have more liquidity in the portfolio—for smaller investors that is usually cash. This risk-averse behavior dampens any upside in a market or accelerates the downside. And I would expect more uncertainty between now and the election and slower trends in markets.

As the election proceeds, people will speculate on the outcome (based on their preferences) and adjust their portfolios accordingly. In other words, polls will lead some to move/make investments and decisions ahead of the election day. I would not expect much effect on the market post-election day as, given the poll results, etc., I would expect the outcome will be priced in. 

Hence the bigger effects come if the market is surprised, as it was in Brexit.