With Republicans regaining control of the White House and Congress in 2025, significant policy changes could impact commercial real estate, from regulatory rollbacks to potential tax reforms. 

“Business leaders sense the new administration’s policies will be pro-business, with reduced regulatory red tape. A better business environment and economy should benefit commercial real estate as well,” said Ginger Chambless, Head of Research for Commercial Banking at JPMorganChase. “What’s less clear is whether some proposed policies could cause interest rates to stay higher for longer—generally a headwind for commercial real estate trends.” 

Early policy priorities point to several key issues for commercial real estate:

1. Regulation

The new administration has advocated for deregulation across industries, including real estate development. Many regulations affecting housing and commercial sites—such as zoning, permitting and environmental impact—are governed at the state or local level. They aren’t directly controlled by the federal government. But the federal executive, legislative and judicial branches each exert influence, said Al Brooks, Vice Chair of Commercial Banking at JPMorganChase. 

“The administration can encourage policy changes, and regulatory challenges may find a more receptive audience at the federal level,” he said. 

2. Tax policy

Key provisions of the 2017 Tax Cuts and Jobs Act affecting commercial real estate—including bonus depreciation and the qualified business income deduction—are scheduled to expire. 

President Trump campaigned on plans to extend these provisions, though implementation could be complex given budget constraints and procedural requirements in Congress for passing tax legislation. 

Explore how the potential extension or modification of these tax provisions could affect commercial real estate owners, in the J.P. Morgan Private Bank’s post-election analysis of tax policy. 

3. Inflation and interest rates

The administration’s early moves on trade policy, including tariffs, could put upward pressure on prices. But the full impact on inflation will depend on how these policies evolve and interact with other economic factors.

That complicates the outlook for interest rates. The Federal Reserve, which aims to balance stable inflation and full employment, cut its benchmark rate by 100 basis points last year before pausing the easing cycle in response to stalled progress controlling inflation, Chambless said. 

“We expect the Fed’s approach to potential rate cuts will remain independent from the White House and driven by economic data,” she said. 

Moody’s expects the Fed to reduce its target rate range from 4.25% to 4.50%, the current level, to 2.50% to 3.00% over the coming years. 

That doesn’t mean longer-term interest rates, which are driven by the broader economic outlook, will drop in lockstep. Moody’s expects the 10-year Treasury rate to stay in the 4% to 5% range—a level that creates headwinds for commercial real estate development—“for the foreseeable future,” said Tom LaSalvia, Head of Commercial Real Estate Economics at Moody’s. 

“We do not anticipate a V-shaped recovery, but instead more of a U shape. The market is likely at or near the bottom, but it will remain in this position longer than in previous cycles,” he said.

4. Housing policy

The new administration has identified housing costs as a priority, expressing support for expanding supply and reducing costs. Early policy moves show competing pressures on these goals.

Zoning, construction and environmental regulation reform could make developing apartments and other asset classes easier, but other policy outcomes could create hurdles, given American reliance on imported construction materials and immigrant workers in construction trades.

“If dramatic immigration and tariff policies are successfully implemented, construction costs will rise through higher wages, material costs and financing costs,” LaSalvia said. 

Moody’s has not made significant changes to its construction forecasts, citing the more measured policies pursued during the president’s first term as a reason for caution in projecting the impact of new proposals. 

Meanwhile, an attempt to pause payments for grants and other federal programs in January caused turmoil in the affordable housing and community development sectors, where projects often count on federal funds. Even temporary funding interruptions can have significant consequences.  

Focus on the long term

It’s important to stay informed about potential policy changes, but presidential administrations generally have a limited impact on the commercial real estate industry. Policy is just one factor affecting the market, alongside broader economic and supply and demand trends shaped over generations. 

“A presidential term is four years. Real estate assets last decades. There are trends that come and go, but this is a long game,” Brooks said.  

The bottom line: Focus your commercial real estate strategy on fundamental market drivers—demographics, interest rates, economic growth and supply-demand dynamics—while staying informed about tax or regulatory shifts that could affect specific investments. 

Work with experts—such as your JPMorganChase team—to understand how policy shifts fit your business’s long-term commercial real estate strategy.