Election Impact on REIT Industry
Following the news of Donald Trump’s election, the capital markets, including participants in the real estate investment trust (REIT) industry, scrambled to assess the likely impact of a Trump Presidency and a Republican-controlled Congress. Individual REIT sectors experienced re-pricing, fluctuating week to week. Despite an initial downturn for REIT stock prices after the election, all REIT sectors managed to rally in the weeks following.
While President-elect Trump has not made any public statement regarding REITs, and there is uncertainty as to exactly what his administration’s policies will be, it seems clear that his election, combined with a Republican-controlled Congress, will result in some policy changes and reforms that will impact the REIT industry. In addition to intensified speculation regarding the likely effects of rising interest rates, markets are also trying to assess the impact of major anticipated changes in the healthcare industry, changes to the tax code, and Trump’s extensive infrastructure spending plan. As REITs are creatures of the tax code, any major tax reform will almost certainly affect the REIT model. Read the entire article here.
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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.