Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. REAL ESTATE
June 21, 2017 01:00 AM

Real estate investors watching Washington to glean sector impacts

Good news or bad news depends on which policies get enacted, LaSalle report shows

Arleen Jacobius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Scott McIntyre/Bloomberg

    Unlike some asset classes, commercial real estate did not participate in the so-called Trump bump. But real estate growth in coming years could, in part, be affected by which of the administration’s policies becomes reality, according to a new white paper by real estate money manager LaSalle Investment Management. Real estate investors, collectively owning a combined $534 billion in core properties, did not participate in the market’s highs and lows following the election of President Donald Trump.

    While real estate lags the economy in general, Mr. Trump’s election and the early days of his presidency coincided with a slower real estate market, resulting from higher interest rates and slow economic growth, the LaSalle paper stated. Real estate vacancy rates flattened in the first quarter after several years of steady improvement. For example, apartment vacancy rates were up 50 basis points from the prior quarter and 20 basis points from the year-earlier period as more apartment buildings came on the market, the paper stated.

    The impact on real estate of any of the Trump administration’s policy initiatives that do become reality would depend on the property type and region. This leaves real estate investors’ eyes on Congress.

    “We continue to track the ‘dance of legislation,’ ” said Jacques Gordon, LaSalle’s Chicago-based global head of research and strategy, referring in an interview to a phrase attributed to President Woodrow Wilson. Mr. Gordon co-authored the white paper.

    Except for possible high-impact changes — such as the repeal of the Affordable Care Act — real estate performance will be relatively unaffected by what the administration does, Mr. Gordon said. “The economy is much larger than the tiny part executive orders or presidential policy influence,” he said.

    Still, administration policy could have an impact depending on the sector, the paper stated.

    Sluggish economic growth resulting from legislative or regulatory changes would affect the office sector the most. Domestic spending cuts would first affect the Washington metro area. Research budget cuts including Mr. Trump’s proposed $1.2 billion at the National Institute of Health could affect other markets, such as Boston, with its high concentration of university-based medical and biotech research.

    Immigration law changes that restrict the flow of highly skilled workers could make the U.S. less attractive for technology companies, affecting Seattle and San Francisco. Fewer foreign students due to immigration changes would impact university cities and towns where education is the key economic driver such as Madison, Wis.

    The apartment sector would be rocked should fewer people move to the U.S.

    “The Pew Research Center estimates that 88% of U.S. population growth over the next 50 years will be driven by future immigrants and their children,” the LaSalle paper stated. Fewer migrants due to immigration policy changes would mean less demand for apartments.

    A major overhaul of the Affordable Care Act could make the overall health-care system less profitable and would be a major hit to health-care real estate, Mr. Gordon said. An ACA repeal or overhaul would not impact prevailing health-care trends of delivery moving to outpatient settings from hospitals, which benefits medical office buildings, and the aging population, which supports memory care centers and other properties serving older Americans. But, real estate investors would need to concentrate on areas where there are large populations of insured people.

    Mr. Gordon noted that “23 million to 24 million Americans losing insurance would be a major hit to health-care real estate.”

    Medical real estate in areas in which there are large numbers of people who are self-employed, are low-income, are Medicare/Medicaid recipients or have pre-existing conditions would suffer the most, he said.

    “There would be less impact on higher-income areas,” Mr. Gordon said. “People who work for large to medium-size corporations still have insurance.”

    Some sectors are not likely to be affected at all by what happens in Washington. Retail real estate is more affected by the changes in consumer purchasing habits brought on by e-commerce than policy shifts, the paper stated. A possible 20% border adjustment tax, which would have negatively affected retail, is not expected to be enacted.

    Related Articles
    Fed minutes show continued caution regarding economy
    Asset owners see Trump's Paris exit as speed bump, not brick wall, for climate …
    Investors leery of easing private equity regs
    Trump's policies on economy, Russia, China are still unknown, Bob Woodward tell…
    National Venture Capital Association files lawsuit against delaying foreign-bor…
    TPG lending hand to DACA workers
    Recommended for You
    Junghwan Kang headshot
    Greystar opens office in South Korea, names country head
    Josh Pristaw speaking into microphone and gesturing.
    Clarion Partners appoints former Pretium executive as president
    Headshots of Steve Reents, left, and Toby Phelps
    Real estate specialist BGO makes slew of executive changes
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print