NYC Real Estate Optimistic, Nervous About Second Trump Presidency

He might have moved to Florida after his first stint in the White House, but President-elect Donald Trump is still a New York City real estate lifer — which gives his longtime colleagues in the city's industry hope that his return to the Oval Office will benefit their businesses.

But many remain apprehensive about the potential long-term effects of his economic policies, like cutting taxes and implementing high tariffs on imports, which could increase the expense of doing business in an already expensive city.

“I would like to think that, because he comes from our industry, he's going to be thinking about those sorts of things just inherently,” said David Goldoff, a president at boutique management firm Camelot Realty Group Cos. and general partner at Penn South Capital. “By proxy, I think that there are going to be things that will roll out that will make sense.”

NYC developers, investors, property managers and analysts told Bisnow this week that Trump's experience as a NYC commercial landlord and developer, plus his track record during his first term, could bode well for the sector. 

With quick and decisive results for the presidency and control of the federal Senate emerging in the early hours of Wednesday morning, commercial real estate figures expressed relief that business decisions no longer have to contend with uncertainty over leadership.

Already, many players in the industry are ready to take decisive action that was impossible only a few weeks ago, Okada & Co. CEO Christopher Okada said.

“Human resources plans were put on hold. Growth plans were put on hold, in terms of office in commercial real estate, until there was a little more clarity,” he said. “Now it's time to get back to business. We have four years.”

New leadership in the White House is “just like a New Year's Day,” Okada said, adding that the results represent a new chapter for the industry with its own possibilities and unknowns.

Among the things Okada expects to see from Trump is protection for 1031 exchanges, a popular mechanism for avoiding taxes on property sales that helped Trump amass his own fortune and that President Joe Biden promised to go after.

Also known as like-kind exchanges, 1031 exchanges allow investors to sell a real estate asset and use sale proceeds to buy another property of similar value within 180 days, avoiding capital gains taxes through reinvesting the proceeds. 

Trump's most significant policy achievement was the 2017 Tax Cuts and Jobs Act, which introduced opportunity zones. The policy, which defers capital gains taxes for real estate investments in economically distressed communities, is due to sunset in 2026, but Trump and Congress could extend or add to the program.

New York had 514 census tracts statewide that were classified as opportunity zones, including hundreds across the five boroughs. Areas that were designated opportunity zones, including the Brooklyn Navy Yard and housing projects in parts of Jamaica, have undergone dramatic changes in recent years.

Trump has not yet commented on whether or not he plans to renew the incentive once in office, but executives see it as likely.

“With the Republicans controlling both houses and the Presidency, it makes the ability to extend it much easier,” Miller Samuel CEO Jonathan Miller told Bisnow.

Miller also believes that a promised change to property tax laws could help property owners in the NYC metro area. As part of the 2017 law, Trump introduced a $10K cap on state and local taxes, known as SALT, that could be deducted from federal income taxes.

“That $10K [deduction] is nominal in the context of a home in Westchester that might have $30K a year in property taxes,” Miller said.

The change made living in high tax states like New York and California more expensive for middle class and wealthier residents. High earners left New York state in droves in the following years, which state leadership attributed to federal laws around tax policy, LoHud reported.

Trump promised to reverse SALT on the campaign trail this time around rather than renew when it expires next year — a promise that many NYC-area executives hope he sticks to, The Real Deal reported. 

But property taxes are the least of housing concerns for the majority of New York apartment tenants who struggle to afford their homes. High demand for housing, record low vacancy rates, constrained supply and exaggerated wealth inequality postpandemic all add to the city’s housing crisis.

Trump’s campaign has been light on housing policy, sticking to talking points blaming illegal immigration for housing shortages while also pledging to open up federal lands for housing development, nonprofit news outfit Capital & Main reported last month.

The Real Estate Board of New York, which represents the industry’s most consequential players, avoided naming Trump in a statement about the results of the election, which touched on the housing shortage.

“REBNY congratulates and looks forward to working with our future federal, state and local representatives,” the statement reads. “Whether it be addressing inadequate housing supply, strengthening our infrastructure network, charting a realistic plan for the green economy or improving overall quality of life, significant work lies ahead. We are optimistic for New York City’s future, as history shows you should never bet against New York.”

Further glimpses of what could be in store for federal housing policy are visible in a Project 2025 chapter authored by Trump's former secretary of the Department of Housing and Urban Development, Ben Carson. It includes directives to dismantle Biden-era policies aimed at reducing race-based discrimination for property appraisals and other federal housing policies.

While the consequences of another Trump administration for affordable housing developers are yet to be unveiled, Desmonde Monroe, president and CEO of affordable developer The Monroe Group, is apprehensive.

“When Ben Carson was in charge of HUD, it was terrible,” he said. “I've worked with HUD most of my career, in development and disaster recovery — it was terrible.”

Experts are alarmed about new tariffs on imported goods, which are expected to be anywhere between 10% and 100%. Tariffs could seriously add to the cost of building and add inflationary pressures, Miller said. Okada also said that tariffs could have long-term economic consequences for the U.S. economy, but that they aren’t an insurmountable obstacle.

“We may have lower interest rates, but then if costs of goods continue to spike, we're going to have to reverse that,” he said. “If there is a 10, 20, 30% increase on the tariffs for inbound construction goods like sheetrock, flooring, glass walls, then that could be hazardous to construction costs. But then the workaround is: just ship it to Canada.”

Trump's proposed tax cuts and regulatory cuts have kicked off a stock market surge on expectations of boosted corporate profits, but the nonpartisan nonprofit Committee for Responsible Federal Budget estimated it would add $7.5T to the national debt over the next decade, according to NPR.

If Trump's policies cause inflation to rise, Miller said, that may lead to higher interest rates that worsen the distress in NYC’s office market. Any offices with balloon mortgages coming due in the next few years may find themselves having to refinance at higher rates, he said.

“It's not that we'll see more distress. It'll pull it forward sooner, just because interest rates are much higher than when most of these buildings were levered up,” Miller said. “What it does is it accelerates the process of moving these buildings from weak hands to strong hands.”

There is concern in the industry that Trump may try to take funding away from New York as payback for the way that its prosecutors have gone after Trump and his businesses in the years since he left office.

“I'm sure the commercial real estate business is hopeful that there'll be something out of Washington that will help them,” Miller said. “But beyond that, given the animosity with the state of New York in general, I'm not so sure that there's going to be tangible benefits to the real estate industry. I hope I'm wrong.”