5 Election Takeaways for NYC Multifamily Investors
What does the election mean for New York City Multifamily owners? Will it impact values? Will rents go up or down? Our research team at Marcus & Millichap released a special report highlighting the impact that Trump’s presidency will have on multifamily owners. The election results may redefine the playing field and it is important to understand the implications involved in this governmental change.
The markets are repricing both debt and equity to factor increased government infrastructure and defense spending and preparing for the possibility of higher inflation. In this post, I’ve tried to highlight areas investors should be watching, so, let’s explore 5 election takeaways for NYC Multifamily owners.
1.Congressional gridlock will ease. Single-party control of Congress and the White House increases probability of action. Fiscal policy including tax changes, setting the federal budget and raising the debt ceiling will likely be less contentious.
2.Reduced taxes could favor investors. Reduced business and personal taxes could favor investors, but the details will matter. Potential changes to carried interest may affect developers and fund managers.
3.Short-term stock market volatility. Elevated post-election uncertainty could cause short-term stock market volatility as Wall Street re-calibrates.
4.Potential for rising inflation. Deregulation, infrastructure spending, and reduced taxes may spark economic acceleration and increase inflationary pressure.
5.Upward pressure on interest rates. Anticipation of increased government debt will place upward pressure on Treasury rates
Obviously, a wide range of factors will determine if the campaign rhetoric is put into action. But the U.S. economy now stands in its seventh year of durable but moderate expansion, supporting job creation, wage growth and consumption. Nationally, stable five percent unemployment and 5.5 million unfilled job openings point to a tight labor market and prospects of 2.0-2.5 million new jobs over the next year.
If you would like to explore any of these topics in greater detail, I have posted a link to the entire research report here:
Connect with us to stay in the loop on additional information & analysis!
Buy Peter's Book Today! Available on Amazon.
Catch up on our most recent posts here:
When the 2017 Tax Cuts and Jobs Act passed, accountants, investors, entrepreneurs and others scrambled to understand the implications- for multifamily owners there is one clear benefit, the creation of Qualified Opportunity Zones.
This month, I have asked Michael Hurwitz and Abe Schlisselfeld of The Real Estate Group at Marks Paneth LLP to provide some insight about these Qualified Opportunity Zones (“QOZ”).
New York City multifamily owners are bombarded with an overwhelming amount of information they need to process. What information really matters?
As our team looks at the current environment, we believe 3 trends deserve focus in 2019.
The secret to long term investing is figuring out how to be active in every market. It’s all about having a “line in the water.” Today, most NYC multifamily investors have been pushed to seek higher yield, and sometimes more risk, in their investments.
This has kept pricing very competitive in the value-add segment of the NYC multifamily market, while pricing on repositioned and finished assets have softend since 2015. Some observers call this a “mispricing of risk.”