Eye-Opening Historical Data Indicates Election Years Have Little Effect on CRE Investment

Posted on May 28, 2024

With the 2024 Presidential Election approaching, the commercial real estate (CRE) industry is closely following the political scene. It is commonly believed that Presidential Election years are seen as riskier times for transactions, but data suggests otherwise. Evidence shows minimal impact on portfolio performance or transaction volumes.

 

Key Insights:

  1. Investors, landlords, and tenants at times slow down their decision making on major transactions during election years. However, data indicates that election outcomes have little to no impact on the volume of leases or sales. Over the past five Presidential Elections, transaction volumes have remained comparatively steady.
  2. Interest rates and inflation are far more of a factor than political changes.
  3. While policy changes can affect investor decisions, there is minimal evidence that federal election outcomes significantly impact investment returns.
  4. A nationwide survey shows that investor concerns are split along party lines, with equal worry about the opposing party gaining power or the current administration remaining.
  5. Despite political changes, the real estate market is driven by interest rates and supply-demand factors.

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