Shorter lease tenor property types, such as hotels, self-storage and apartments would see strongest and most immediate benefit if the Trump administration succeeds in accelerating US economic growth with infrastructure spending and tax and regulatory reforms, according to a new report released by Fitch Ratings.
However, more restrictive trade and immigration policies could undermine the President’s growth oriented policy agenda if they contribute to meaningful appreciation in the US dollar and higher wage inflation. Long-tenor triple net retail and healthcare properties are less able to offset higher interest rates with pro-cyclical rent growth. However, their triple net lease structures commonly have contractual rent escalators that will provide some support.
However, more restrictive trade and immigration policies could undermine the President’s growth oriented policy agenda if they contribute to meaningful appreciation in the US dollar and higher wage inflation. Long-tenor triple net retail and healthcare properties are less able to offset higher interest rates with pro-cyclical rent growth. However, their triple net lease structures commonly have contractual rent escalators that will provide some support.
ÒThe Trump administration has cast a wide policy goal net that could directly and indirectly help shape demand and valuations across most commercial real estate property types,” says Stephen Boyd, Senior Director, US Corporates.Ê”However, the policy details will be key and president Trump’s ability to navigate the political waters in DC are still unproven.”
The full report, “What Investors Want to Know: US REITs,”Êis available for download via the link below.
What Investors Want to Know U.S. REITs.pdf
