How Occupiers and Investors Can Succeed During Economic Uncertainty
President Trump’s first 100 days in office have triggered a wave of uncertainty across the marketplace.
Economic policy has shifted dramatically under the new administration, from trade and immigration reforms to cost-cutting measures and tax and spending policy changes, according to a Cushman & Wakefield analysis. The property sector has been largely resilient during the first 100 days, with leasing fundamentals remaining steady and the capital markets recovery continuing through the first quarter, the report said.
Looking ahead, tariffs may disproportionately impact industrial and retail in terms of occupier demand, and rising construction costs and more restrictive immigration rules could further slow the construction pipeline, said the report. Meanwhile, a gradual recovery in the debt and capital markets is expected to continue and gain momentum into 2026 despite credit and risk spreads potentially widening in the short term, said the report.
For both occupiers and investors, the heightened level of uncertainty is a reminder to maintain a long-term perspective, said Cushman & Wakefield. Occupiers should continue to implement workplace strategies with a focus on long-term objectives, while investors should prioritize investments that capture consistent value appreciation over time.
Occupiers may be able to leverage tariffs and uncertainty to shape business strategies and negotiations, using terms and credit to their advantage, the report said. Diversifying supply chains will be a key risk management strategy for manufacturers regardless of tariff impacts. Operational risk can be diversified through the strategic use of third-party logistics (3PL), said the report.
Large corporations should work to position their organizations to capture increased market share when uncertainty subsides by proactively targeting high-quality assets and locations, advised Cushman & Wakefield. In addition, occupiers may consider re-evaluating and reassessing their real estate strategy to align with their business outlook and tailor their approach to optimize space utilization. They should be prepared for more expensive construction fit-outs in the immediate term as well, said Cushman & Wakefield.
Investors, meanwhile, can take advantage of market volatility by strategically acquiring assets from sellers that are motivated by short-term market fluctuations. With interest rates unlikely to return to pre-pandemic levels, investors should look for opportunities when long-term debt dips below historical averages and capitalize on short-term rate movements, said Cushman & Wakefield.
CRE assets represent stability during periods of uncertainty, particularly because they encompass a variety of necessity-based categories, including residential, grocery-anchored retail and healthcare that often outperform during weaker growth environments, said the report.
Source: GlobeSt/ALM