By NASH NUNNERY
Improved job growth and a strong demand for multifamily housing in recent years has resuscitated the commercial real estate market, according to experts.
And now with Donald Trump sworn in as America’s 45th president in 2017, what does this mean for commercial real estate in Mississippi?
As with all new presidents, uncertainty abounds about a new political regime coming to Washington, although many real estate industry insiders believe that President Trump, a longtime real estate mogul, will likely be a friend to the industry.
Some national economists predict that Trump’s presidency will bring with it higher interest rates, inflationary policies, tax cuts and infrastructure spending. It’s been said that such an environment would have mixed consequences for the US commercial real estate market.
Jackson-based EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets such as Florida, Texas, Arizona, California and North Carolina.
EastGroup CEO Marshall Loeb says the company was doing well before the election and he is “modestly encouraged” that a Trump presidential administration will be kind to the commercial real estate industry.
His encouragement was solidified by a strong December following the election.
“We have mostly industrial properties and were prepared to ‘gear down’ for the holidays,” said Loeb. “But our business remained brisk and we’ve seen a lot of expansions.”
Though a little concerned about possible new international trade policies due to EastGroup’s heavy involvement in warehouses on the US/Mexico border, Loeb is hopeful that less regulation will breathe fresh air into America’s business sector overall.
“I’m optimistic that the new administration will be a good thing for commercial real estate markets across the nation,” he said.
Taking a ‘wait-and-see’ approach, John Ditto believes the markets will be volatile, at least for a while, since a Trump’s election was so unexpected.
Ditto, who serves as president for State Street Group in Ridgeland, says a stricter enforcement of current immigration laws may push up construction costs, as cheap labor becomes less available.
“New construction is probably going to cost more,” he said. “But I do feel that Trump will be a positive in the lending arena. He appears ready to unwind a lot of restrictive banking regulations.”
State Street Group specializes in commercial, self-storage and multi-family communities.
Cook Commercial Properties president and owner Bill Cook, Jr. says new blood in the White House “can’t do anything but help” the commercial real estate market, particularly in Jackson.
“The Jackson market has been stagnant in recent years, with nothing new having been built,” he said.
“We deal in industrial-type properties and I believe with Continental Tire coming online (in Hinds County) the next few years, we’ll see a renewed interest in building new spaces.”
Cook envisions better times ahead for business in general with the new presidency.
“We’ve been doing okay but we see a huge upside with Trump and his team,” he added.
What they can bring to the table will be good for real estate and the economy.”