28 August How Do Election Years Affect CRE? August 28, 2024 By Melisa Rana Commercial Real Estate News, Property Investment business tips, real estate trends 0 HOW DO ELECTION YEARS AFFECT CRE? August 28, 2024 | Property Investment, Commercial Real Estate News | real estate trends, business tips You may not have noticed, but this is actually an election year. That’s right! Currently, the two major parties are jockeying for political seats all across the United States at the local, state, and federal levels. All jokes aside, especially in our polarized political climate, it can often feel like the presence of an election year touches every industry and every aspect of our daily lives. For those who work in the real estate industry or anything tangential to commercial real estate, you’re certainly aware of the ominous reputation associated with election years. According to prevailing belief, election years wreak havoc on investments–projects can stall as uncertainty muddies the waters until the market finally comes up for air post-election. Though this is the prominent impression, do election years truly have such an outsize impact? Or is this another myth causing hesitation from quality opportunities? Let’s take a look! Political Factors that Impact CRE Commercial real estate is, of course, influenced by many policies from the local level all the way to the white house. From tax codes to zoning laws, policies can fluctuate from administration to administration, which certainly affects investment plans. Additionally, one candidate may focus on a particular issue and support corresponding incentives like with environmental building practices. Certainly, partisan politics can often mean that the party that gains office and majority control in congress will have the ability to steer new policies in their desired direction more easily, but sometimes trends that support CRE will occur regardless of election results. For example, infrastructure investment bills are often passed with bipartisan approval once the need is recognized. The most important point to highlight here is that, while elections do matter for the commercial real estate market due to the policies that are more likely to be passed into law down the road, these impacts don’t go into effect during the actual election year. So, why do elections have such a notorious reputation when it comes to affecting CRE? Impact of Election Years on the Real Estate Market The truth is that the CRE tension that arises during election years isn’t entirely our imagination. As the election date draws near, investors do tend to enter into a “wait-and-see” mindset period that spans a few months before and a few months after the presidential election. However, this time period is less influential than most people think. According to experts like those at JP Morgan, the impact of election years on the commercial real estate market is limited and temporary, with overarching economic conditions being far more consequential. Additionally, it’s important to remember the potential of gridlock as the result of any major election, leading to a sizable period of maintaining the status quo. All in all, commercial real estate investors and developers would generally be wise to take all market factors and trends into account and not rely too much on election year hesitancy. For more insights on CRE market trends, property maintenance, and all things inspection, you’re in the right place! Looking to schedule your next inspection at one or more of your properties? Speak with the NPI National Accounts team to get started. Comments are closed.