Key Takeaways
- The Trump administration has pursued both fiscal and regulatory policies that have influenced commercial real estate markets, including tax provisions, development incentives, and deregulation efforts.
- Key tax policies affecting real estate investors include the preservation of 1031 exchanges, adjustments to bonus depreciation rules, the creation of Opportunity Zones, and modifications to pass-through entity deductions.
- Regulatory approaches have shifted toward streamlining development approvals and adjusting financial institution oversight, which can impact lending conditions and project timelines.
- Different property sectors respond differently to policy changes based on their underlying fundamentals, tenant demand patterns, and sensitivity to economic conditions.
- Important consideration: Real estate is inherently a long-term asset class. Short-term policy shifts—including those tied to presidential administration changes—should be evaluated within the context of longer investment horizons and fundamental property performance metrics rather than treated as primary investment drivers.
Commercial real estate (CRE) investors are closely watching how President Trump’s second term might shape the industry. With Republicans back in control of both the White House and Congress—and with the president’s own background in high-end real estate development—the industry is paying attention to how new policy priorities could influence the market.
Many business leaders anticipate more business-friendly strategies and lighter regulations that could support short-term growth in CRE. At the same time, higher interest rates remain a challenge. Depending on how fiscal and trade policies interact with inflation and broader economic conditions, borrowing costs could stay elevated, creating headwinds for the sector.
Looking Back: CRE Under Trump’s First Term (2017–2021)
Commercial real estate is a long-term investment; presidential terms are short. Policy changes can shape investor behavior at the margins, but fundamentals like demographics, interest rates, and supply-demand dynamics drive the market over decades.
During President Trump’s first term, several initiatives stood out:
Tax Policy Highlights
- The Tax Cuts and Jobs Act (TCJA) of 2017 preserved 1031 exchanges for real property, expanded 100% bonus depreciation for qualified improvements, and created Opportunity Zones to stimulate investment in low-income areas.
- The Section 199A Qualified Business Income (QBI) deduction was established, allowing eligible taxpayers to deduct up to 20% of qualified business income and REIT dividends.
Regulatory Environment
- Environmental and permitting rules under the National Environmental Policy Act were rolled back to shorten review timelines.
- Mid-size and regional banks gained greater lending flexibility through changes to Dodd-Frank thresholds.
Market Performance
- Industrial and multifamily assets surged due to logistics demand and housing needs.
- COVID-19 slowed CRE transaction volumes but recovery was swift in most sectors. Office and retail remained weaker throughout the pandemic.
What’s Changing Now: Early Trends in Trump’s Second Term
As of mid-2025, publicly announced policies and early legislative actions point to these themes:
Tax and Economic Policy
The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, permanently extended 100% bonus depreciation for qualified property placed in service after January 19, 2025, eliminating the phase-down set by the 2017 TCJA.
The OBBBA also introduced tiered gain exclusions for Qualified Small Business Stock (QSBS):
- For a stock held for 3 years, the investor may exclude 50% of gain
- For a stock held for 4 years, the investor may exclude 75% of gain
- For a stock held for 5 years, the investor may exclude 100% of gain
No changes to Section 1031 exchanges have been proposed or enacted to date.
Interest Rates and Monetary Policy
The Federal Reserve sets rates independently of the White House, but fiscal policies can influence inflation and rate expectations.
Moody’s projects the Fed will gradually lower its target rate range from the current 4.25%–4.50% to 2.50%–3.00% in the coming years. However, longer-term interest rates, influenced by broader economic conditions, may not fall as sharply. The 10-year Treasury is likely to remain in the 4%–5% range, a level that continues to challenge commercial real estate development.
Focus on Domestic Development
The second Trump administration is continuing with the “America First”-style policies of the first administration. President Trump will likely continue to emphasize U.S. infrastructure, reshore industrial production, and promote domestic energy expansion that may create CRE opportunities.
Immigration and Labor
Changes to immigration and labor policy could impact construction labor availability and commercial tenant demand, especially in the hospitality, industrial, and retail sectors.
The second administration has set a goal of executing the largest deportation in U.S. history.
Since one of the sectors most affected by deportations is construction, CRE investors investing in areas with higher deportation rates may need to consider potential construction challenges.
Additionally, publicized deportations may be affecting the tourism and hospitality industries; more data is needed.
What Investors Should Watch
Over the remainder of this administration, investors may want to track:
- Proposed tax changes (especially to 1031 exchanges, depreciation, or capital gains)
- Regulatory adjustments impacting lending, permitting, or zoning
- CRE sector performance under broader economic policy
- Availability of DSTs and passive investment vehicles as alternatives to active property ownership
Navigating CRE in a Changing Policy Environment
Trump’s first term created CRE tailwinds through tax reform and deregulation; his second term is still unfolding, but appears to be heading in a similar direction, with added focus on domestic development and more restrictive immigration policies.
Commercial real estate is a long game. Policy shifts matter, but fundamentals drive long-term value. Stay informed, and consult your advisors to align tax and investment strategies with changing conditions.
Our team at 1031 Crowdfunding has the experience and resources to help you navigate these changes and identify alternative investments that align with your investment goals. Register for a free account to get started.
This material does not constitute an offer to sell or a solicitation of an offer to buy any security. An offer can only be made by a prospectus that contains more complete information on risks, management fees, and other expenses. This literature must be accompanied by and read in conjunction with a prospectus or private placement memorandum to fully understand the implications and risks of the offering of securities to which it relates. As with all investing, investing in private placements is speculative in nature and involves a degree of risk, including loss of your principal. Past performance is not necessarily indicative of future results, forward-looking statements and projections are not guaranteed to achieve the results described, and your actual returns may vary significantly. Investments in private placements are illiquid in nature, and there may be no secondary market or ability to sell the investment should the need for liquidity arise. This material should not be construed as tax advice, and you should consult with your tax advisor, as individual tax situations will vary. Securities offered through Capulent, LLC Member FINRA, SIPC.
