How Could the result of the 2022 Midterms Impact CRE?
Election Results Cause Split Congress
- Republicans and Democrats will each control one chamber of Congress following inaugurations in 2023
- Split governments generally pass fewer policy changes, resulting in fewer market disruptions
How Do Political Environments Impact CRE Returns?
- Historically, real estate returns rise 10.8% on average during years with split sessions, a 250-bps premium over years with one party control
- CRE returns recorded strong and weak during each party’s control, but have consistently been higher during periods with divided government
Implications for CRE Investors in 2023
- Regardless of the impact of a policy, potential changes impact investors decision making
- Investors could have 2 years to lock in strategies with few policy changes affecting their playbooks
Sources: Marcus & Millichap Research Services, NCREIF
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