The landscape is rapidly changing with the new administration, and many commercial real estate investors are wondering what it might mean for them. If this resonates with you, take a deeper dive into the potential impacts of various scenarios.
Economic uncertainty has been the name of the game for a while now, and 2025 is no different. Despite the overall volatility, retail and industrial markets remain steady as all sectors continue to recover from a prolonged post-pandemic downturn. The increasing requirement for a full or partial return to the office has contributed to the recovery of this once-dwindling market.
Nobody can predict the future, but you can be prepared to act—either offensively or defensively, depending on which way the tides turn. The impact of the new administration remains to be seen, but one thing we can count on is some level of disruption.
Regulatory Changes
With clear goals to streamline operations and reduce government controls, commercial real estate developers could see some benefits such as fewer regulatory hurdles and faster permitting processes. It’s also possible that more land will open up for development, so investors would be wise to keep an eye on key markets where investment opportunities might arise.
Changes in banking regulation could also significantly impact commercial real estate investors seeking funding through traditional channels. Given the current administration’s pushback on the Basel III Endgame, borrowers could potentially benefit from more flexible terms. Identify your ideal real estate acquisitions now so you’re poised to act if borrowing conditions become more favorable. It’s also a good idea to identify potential commercial hard money lenders in case you’re unable to get a conventional loan or need to act more quickly than a traditional bank allows.
Trade Policies
The combination of tariffs, supply chain structures, and the rising cost of construction labor will likely lead to higher development costs. For investors, this means extended project timelines and the need to offset increasing costs. On the other hand, as manufacturers and consumers turn to US-based suppliers, the demand for industrial and manufacturing properties could increase, so keep an eye on this space if you’re looking to enter a new market or expand your industrial holdings.
Housing Growth
Investors in residential multifamily markets could see more opportunities as the regulatory landscape evolves. With more housing comes higher demand for retail and multi-use spaces, so commercial investors can ride the wave as new housing developments emerge, both affordable and market-rate.
Climate Concerns
Real estate investors of all types should consider the factors that might contribute to an investment's success or failure, and the climate is no exception. Relaxing regulations could lead to higher risk on a faster timeline, depending on the property location and condition. When taking the long view, consider factors such as natural disasters, changing weather patterns, and higher-risk locations that could be impacted by climate change.
Emerging Technologies
The current administration’s favorable outlook on cryptocurrency, AI, and advanced technology could provide opportunities for investment in data centers and other related facilities. This relatively new asset class might not be for all investors, but if you’re looking to specialize, more opportunities will arise in this space.
Set Yourself Up for Success with Socotra
The commercial real estate market is poised for growth—and has potentially even reached the bottom—so savvy investors should take a closer look at opportunities and consider taking advantage of this unique timing as the current administration settles in. With a relatively volatile market, the ability to move quickly will be critical.
When traditional lending channels become unavailable or too slow, Socotra is here to help with hard money loans for commercial investment. With expertise in markets throughout the country, our team can quickly underwrite loans that allow you to act fast.
If you intend to purchase commercial real estate that needs additional investment before tenants can move in, a bridge loan might be the solution you need. When you work with commercial hard money lenders, you can quickly close on the property and obtain funds for renovation while you secure tenants. Learn more about commercial bridge loans from Socotra Capital.
