The election of United States President Donald Trump in 2016 has left California investors wondering about the future of commercial real estate. There were many reasons to be optimistic; after all, the Trump fortune was largely built on his real estate development acumen, and thus it would stand to reason that this sector may flourish under his administration. After more than six months of Trump in the White House, however, the bullish sentiment on commercial real estate has subsided to some extent. Nevertheless, there is still plenty of action in this economic sector.
According to the recent NREI/Marcus & Millichap Investor Sentiment Survey, the initial enthusiasm of having a major developer as commander-in-chief has been replaced with a certain level of uncertainty. Commercial real estate closings are still taking place, but not as much as they did before the election. Survey respondents believe that the economic recovery that started in the Obama administration will continue under Trump, but investors are also expecting to see the sector soften over the next two years.
It is important to remember that the commercial real estate market is highly cyclical. As such, an overall slowdown has been noticed since 2014. In other words, the sector could be settling into a more stable period.
As to whether the current time is better for acquiring or selling assets, a little less than half of the aforementioned survey respondents feel that now is a good time to buy. Only 18 percent believe that selling would be a better deal. To sum up the survey results, investors are approaching the market in a more cautious manner. Those who are looking to buy or sell may do well to retain legal support.
