Trump’s First 100 Days: Top Commercial Real Estate Policies to Watch

President Donald Trump’s second term is rapidly taking shape, with sweeping executive orders, quick nominations and bold policy announcements advancing in the first few days of his second administration. From tax policy to housing, immigration, and energy initiatives, the commercial real estate sector faces a dynamic and fast-changing landscape.

Tax Policy

  • TCJA Renewal: Efforts to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are a key priority for the Trump administration and Republicans in Congress, with significant implications for commercial real estate.
  • A number of RER priorities are at stake, including maintaining the reduced tax rate on capital gains, extending Opportunity Zones and the Section 199A deduction, safeguarding like-kind exchanges and enacting federal tax incentives for property conversions to address the housing shortage. (Roundtable Weekly, Jan. 10)
  • The content of the reconciliation package continues to be heavily debated, with multiple areas of intra-party disagreement among Republicans to overcome in order to reach a deal. Concerns about pay-fors, the growing debt, budget cuts and proposals to eliminate the state and local tax deduction (SALT) remain. (Politico, Jan. 22)
  • RER President & CEO Jeffrey DeBoer appeared on Marcus & Millichap’s 2025 Economic & CRE Outlook webinar with a panel of industry leaders discussing the macro environment, the potential policies of the new administration and tariffs, affordable housing, tax policy expectations and more.

Tariffs

  • Proposed Tariffs: Trump has signaled a desire to implement sweeping tariffs, including a 25% tariff on goods from Mexico and Canada that could go into effect on Feb. 1. Trump has also considered a universal 20% tariff on all imports and a 60% tariff on China. (CNN, Jan. 21)

  • These measures are aimed at boosting domestic manufacturing and addressing trade imbalances but could have ripple effects on construction costs and material availability. Any tariffs on imported materials like steel, aluminum and lumber are likely to drive up costs for developers and impact efforts to address the housing shortage. (BisNow, Jan. 17)

  • The scale and scope of the President’s tariff plans are in flux. Trump’s advisors have reportedly considered a phased-in tariff approach. It’s also possible that Trump makes use of the White House’s exemption authority to protect certain industries or goods deemed vital. (Bloomberg, Jan. 13)

Regulatory Work

  • President Trump also signed an executive order freezing all ongoing regulatory work across the federal government, halting the proposal or publication of new rules until reviewed and approved by his administration.
  • The freeze delays the effective date of recently published rules by 60 days, allowing time to decide which Biden-era regulations to keep, rewrite, or discard. (National Law Review, Jan. 23)
  • As with many other parts of the U.S. financial regulatory framework, the pending Basel III Endgame proposal may end up being reproposed with a capital neutral scheme, giving a potential boost to liquidity and credit capacity under the new Trump administration. 

Disaster Aid and NFIP Extension

  • California Fires: Congress and the new administration will soon need to provide billions of dollars in aid to assist those affected by the Los Angeles wildfires. The catastrophe could reach up to $275 billion, with then of thousands of homes and businesses will need to be rebuilt, making federal assistance essential. (Roundtable Weekly, Jan. 17)
  • NFIP: The increasing severity of natural disasters—including the devastating hurricanes last year—has increased the importance of the National Flood Insurance Program (NFIP), whichis set to expire on March 14 unless reauthorized. The Senate Banking, Housing and Urban Affairs Committee held a hearing on Thursday to discuss the program’s renewal. (Politico, Jan. 22)

Housing

  • Fannie Mae and Freddie Mac Privatization: Trump’s team is expected to resume efforts to privatize the government-sponsored enterprises (GSEs), which could significantly reshape multifamily financing markets.
  • Trump has nominated Bill Pulte, to lead the Federal Housing Finance Agency (FHFA), which oversees the GSEs—a move experts say is part of Trump’s push towards privatization. (CRE Daily, Jan. 17)
  • Deregulation to Spur Housing Development: Trump has pledged to roll back environmental and building regulations that hinder housing construction. This includes streamlining permitting processes, relaxing restrictions and accelerating project timelines.
  • Trump’s nominee for the Department of Housing and Urban Development (HUD), Scott Turner, has pledged to cut regulations that he says are stifling development. These efforts aim to increase housing supply, particularly in high-demand markets. (BisNow, Jan. 17)

Immigration and Labor

  • Deportations: Trump’s plans for mass deportations could have significant effects on the housing industry. Immigrants make up over 25% of the construction laborer workforce in the U.S., an industry where more workers are sorely needed—especially if affordable housing goals are to be met. (Bisnow, Jan. 17)
  • Depending on the extent of Trump’s deportation plans, CRE projects may face rising costs and delays if the construction workforce is severely affected. (NBC News, Jan. 21)
  • According to the Associated Builders and Contractors, the construction industry needs 439,000 new workers this year to meet rising demand. The need for construction resources is urgent, with Los Angeles requiring rebuilding after devastating fires and a nationwide surge in data center construction on the horizon. (Axios, Jan. 24)

Energy and Infrastructure

  • Emergency Powers: On the day Trump took office, he declared an energy emergency—giving the White House new authority to speed up the manufacture of certain products under the Defense Production Act, issue waivers on certain gasoline restrictions and restrict energy trade, among other powers—likely in service of Trump’s stated effort to “drill, baby, drill.” (The Hill, Jan. 20)
  • Data Centers: Trump also announced a $500 billion “Stargate” initiative designed to expand AI-focused data center infrastructure. The executive order prioritizes the use of fossil fuels to power these facilities and streamlines permitting processes for large-scale projects. (AP News, Jan. 22)
  • The investment could help hasten the buildout of high-demand data centers, which are limited by the availability of energy resources and infrastructure. (BisNow, Jan. 22)

Looking Ahead

With the whirlwind of activity coming out of the Trump administration and Congress, RER will continue to proactively evaluate policy developments as legislative efforts and White House implementation of executive orders progress.

Incoming Trump Administration Prepares Energy Policy Shift

This week’s confirmation hearings shed light on the Trump Administration’s ambitious energy agenda, including plans to expand American energy production, streamline project approvals, and explore a carbon tariff on imports. (PoliticoPro, Jan. 16)

“All of the Above” Energy Policy

  • President-elect Trump has prioritized “drill, baby, drill” as a cornerstone of his agenda, emphasizing energy independence and dominance through increased domestic oil and gas production.
  • Chris Wright, the Energy Secretary nominee, told the Senate Energy Committee on Wednesday that he would use the role to “unleash American energy at home and abroad” if confirmed. (Reuters, Jan. 15)
  • Wright said in his opening statement that he would focus on three objectives: removing barriers for energy projects, accelerating innovation by the national laboratories, and advancing U.S. energy domestically and abroad. (Roll Call, Jan. 16)
  • North Dakota Governor Doug Burgum, the Interior Secretary nominee, said at his Thursday confirmation hearing that the U.S. must expand domestic energy production and electricity generation to meet growing demand, particularly from AI technologies. (Politico, Jan. 16 | Roll Call, Jan. 16 )
  • Burgum supports an “all-of-the-above” approach that would utilize renewables and fossil fuels.  Trump has also tapped Burgum to lead a White House-based energy council that would coordinate policy across the federal government. (Politico, Jan. 9)
  • Former Representative Lee Zeldin, the nominee for EPA Administrator, said at his Thursday hearing he would work in a bipartisan manner with career staff to fulfill the agency’s mission. (PoliticoPro, Jan. 16 | The Hill, Jan. 16)
  • Zeldin vowed to address climate change without “suffocating the economy,” and committed to private sector collaboration to “promote common sense, smart regulation.” (NBC News, Jan. 16 | Washington Post, Jan. 16)

Carbon Tariff Proposal

  • During his Thursday confirmation hearing, Treasury Secretary nominee Scott Bessent (see Policy Landscape story above) expressed interest in a carbon tariff on imports, suggesting it could be part of a broader Trump administration strategy to raise revenue, counter unfair trade practices, and boost negotiating leverage.
  • Bessent indicated the potential for such measures to align with the administration’s broader trade and economic goals. (PoliticoPro, Jan. 16)
  • Recently, Sen. Bill Cassidy (R-LA) proposed a bill, the “Foreign Pollution Fee Act” that would impose a “foreign pollution fee” on imported carbon-intensive products – including construction materials. (E&E News, Dec. 12)
  • The bill’s co-sponsor, Sen. Lindsey Graham (R-SC), spoke about the bill at Bessent’s hearing. “If you want to clean up the environment, a carbon fee seems to be a good way to do it, to punish China and India for bad carbon practices,” Graham said. (Politico, Jan. 16)
  • The Roundtable submitted comments today on the Foreign Pollution Fee Act. The letter raises concerns regarding the impact of a carbon tariff on affordable housing constriction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing.

Other Energy News This Week

  • President Biden issues executive order to advance U.S. artificial intelligence (AI) infrastructure: President Biden issued an executive order directing agencies to lease federal land for “gigawatt-scale” to support new data center construction. (AP News, WH Press Release, Jan. 14)
  • 179D energy efficiency tax deduction: The Energy Department (DOE) launched the 179D Portal, offering tools for new commercial construction and retrofits to estimate energy savings and qualify for potential federal tax incentives. (DOE Press Release, Jan. 14)
  • California wild fires raise electricity costs: The Los Angeles wildfires, which caused over $250 billion in damages and severely impacted the region’s electrical infrastructure, have driven a nearly 50% increase in California’s residential electricity rates since 2019, raising concerns about the fairness of passing these wildfire-related costs onto customers. (Politico, Jan. 15)
  • Maryland building emissions standards lawsuit: A coalition of trade organizations filed a federal lawsuit arguing that the Maryland Building Energy Performance Standards (BEPS) is illegal because it is “pre-empted” due to its conflict with federal laws. The Maryland law mandates large buildings to reduce greenhouse gas emissions by 20% within five years and achieve net-zero emissions by 2040. The lawsuit claims the rules exacerbate the housing crisis, strain the power grid, and violate consumer choice. (Baltimore Banner, Jan. 14 | (Baltimore Sun, Jan. 16)

Electric Grid Strain: CRE’s Role in Addressing Energy Challenges

Demands for artificial intelligence (AI), advanced manufacturing, electric vehicles, and building electrification are straining the U.S. electric grid—creating challenges and opportunities for commercial real estate (CRE). (Deloitte, Dec. 9)

Why it Matters

  • The grid is at a “tipping point.” Heightened demands for power by consumers, businesses, and government are posing significant risks to energy reliability and driving data center construction to meet the needs. (PoliticoPro, Dec. 18)
  • The organization authorized by Congress to assess grid capacity highlighted last month the “critical reliability challenges” needed to satisfy “escalating energy growth,” as retiring power plants age-out of service. The report also noted the need to accelerate construction of transmission projects to bring electricity to the nation’s cities and suburbs. (N. American Electric Reliability Corp., 2024 Assessment.)
  • President Joe Biden is expected to issue an executive order as soon as today to boost the construction of data centers on federal land to support AI, while also aiming to increase geothermal and nuclear energy production to power them. (PoliticoPro, Jan. 9)
  • Data center construction is surging to meet demand with site selection largely driven by power availability. Microsoft and Meta recently announced billions of data center investments. (E&E News, Jan. 10 | CBRE, Aug. 2024)
  • The Department of Energy (DOE) estimates data centers could consume up to 12% of U.S. electricity by 2028, largely attributed to demand from cloud and AI providers. (DOE News Release, Dec. 20)
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11)

Bipartisan House Report on AI

  • Policymakers and industry leaders are focusing more than ever on solutions to expand power generation and modernize the grid.
  • The Bipartisan House Task Force on AI released a report last month finding that AI’s critical role in U.S. economic and national security interests hinges on a robust power grid. (House AI Report, December 2024).
  • Recommendations from the Bipartisan House AI Task Force report include:
    • Develop metrics and standards to measure energy use and efficiency.
    • Allocate infrastructure costs to customers who benefit most from upgrades.
    • Use AI to improve energy infrastructure, production, and efficiency.

EPA’s Energy Data Campaign

  • Looking ahead, utilities, policymakers, and data center operators must collaborate to balance priorities such as grid upgrades, renewable energy procurement, water resource management, and equitable cost allocation. (Deloitte, Dec. 9)
  • This week, EPA continued its building energy data campaign to assist real estate owners in coordinating with utilities to access tenant space energy data.
  • To aid both owners, operators, and utility representatives in understanding this issue and potential solutions, EPA has prepared a number of energy data resources that can be found here.

A resilient electric grid is critical to sustaining economic growth. These issues will be featured in discussions at The Roundtable’s State on the Industry meeting on Jan. 22-23.

CRE’s Year of Transformation: Lessons from 2024 and Outlook for 2025

As 2024 comes to a close, the commercial real estate industry has made significant strides in recovery and adaptation.

2024 Roundtable Highlights

  • Over the past year, industry confidence has rebounded. RER’s Q4 Sentiment Index reached 73—a three-year high—and a 12-point jump from Q1 of this year. Despite ongoing challenges, the industry has demonstrated resilience and emerged stronger.
  • RER President & CEO Jeffrey DeBoer spoke about the industry’s 2025 priorities in a recent episode of the Leading Voices in Real Estate podcast, saying, “Real estate cuts across all aspects of our economy, and it’s what makes cities strong. You can’t find a time in history where nations have been strong without healthy cities. Right now, cities are struggling, and we want to help them back.”
  • Looking ahead to 2025, RER remains focused onadvancing policies that support liquidity, innovation, and adaptive reuse to ensure CRE remains a pillar of economic growth and community development.
  • 2025 Policy Priorities Survey: Next week we will be distributing our Policy Issues Survey to all members to gather input on our policy priorities for 2025.

Top Takeaways from 2024

Construction skyline
  • Key drivers of the industry’s growing confidence include easing interest rates and improving financial conditions, which have helped to stabilize asset values and encourage investment activity. By year-end, easing monetary policy and growing investor confidence have started to open up capital availability, with more progress expected in 2025. (Roundtable Weekly, Nov. 8)

  • Office-to-residential conversions saw a banner year, with more than 70 projects completed in 2024. Bolstered by the growing number of state and local incentive programs, 71 million sq. ft. (1.7% of U.S. office inventory) was undergoing or planned for conversion​ as of Q3. Property conversions will continue to see growing momentum in 2025, helping to alleviate elevated vacancy rates. (CBRE, Nov. 11)

  • Loan modifications and extensions, encouraged by regulators and supported by RER, have helped many distressed owners stabilize properties and avoid defaults. While 2024 was a challenging year for the office sector, markets have started to reach an inflection point as capital becomes more available, vacancy rates start to peak, return-to-office momentum grows, and transaction activity picks up. (Roundtable Weekly, Nov. 15)

  • Meanwhile, multifamily and industrial assets—especially data centers—continued to demonstrate strength, benefiting from robust tenant demand and the rapid expansion of AI-driven technologies. (CBRE, Dec. 11)

Prospects for 2025 and Trends to Watch

  • Economic growth: The CRE sector is poised to benefit from moderate economic growth and a more favorable interest rate environment. Investors are cautiously optimistic about improving liquidity and stabilizing valuations, which could unlock much-needed capital. (Commercial Observer, Dec. 10, CBRE, Dec. 11)

  • Office recovery: In San Francisco, office vacancy rates have dropped for the first time in four years—a sign that the office sector is beginning to turn the corner on the pandemic-era economy. Conversion activity is also expected to remain robust, supported by state and local incentives. (S.F. Chronicle, Dec. 16, GlobeSt., Dec. 17)

    • As RER Chair Emeritus William C. Rudin (Co-Executive Chairman, Rudin) recently told Squawk Box, “the demise of office and New York City are greatly exaggerated…there is capital, the CMBS market is back, the banks are coming back to the market,” indicating a welcome trend that could help drive an office revival across America’s downtowns.

  • The data center market will likely see explosive growth driven by artificial intelligence and cloud computing, although power constraints may limit development. Demand for data centers is expected to grow 160% by 2030, driving the buildout of the physical infrastructure needed to support the next digital revolution. (Goldman Sachs, May 14) (McKinsey, Oct. 29)

  • Political and regulatory shifts following the 2024 election—including potential changes to trade, immigration, and fiscal policies with a new Congress and presidential administration—could pose new opportunities or risks in 2025.  Collaborating with and educating policymakers on the impact these policies have on real estate will be crucial to ensuring that public policies support economic growth, job creation, housing affordability, and industry stability.

Heading into 2025, RER will continue advocating for policies that strengthen economic growth and capital availability while addressing industry challenges, including expanded tax credits for affordable housing and property conversions, permitting reform, and other initiatives that support a vibrant and resilient CRE sector.