What’s In Store for Shared Office Space Rents Under Trump
The recent presidential election victory of Donald Trump has economists and business experts perplexed about the plight of shared office space, among a myriad of other topics. In our view, shared office space is in for quite a ride and it is likely that we’ll see rents drop in the intermediate to long term. Our analysis is based upon ideas presented at the Bisnow NYC 2017 Forecast event.
According to the Bisnow Conference, Trump is a dealmaker and seen as very commerce friendly. His intention to roll back laws such as Dodd Frank was viewed as favorable for business. Slackening of the regulatory reigns may stimulate bank lending, making it easier for real estate firms to obtain money for development of cutting edge shared office space facilities, the experts claimed. A higher supply of shared office spaces on the market may drive down rents and cost of real estate per square foot.
The experts at the Bisnow Conference believe that Trump is likely to put more money into taxpayers’ pockets. Many real estate professionals welcome the sustenance of the 1031 exchange deferral. All of this would increase supply of new properties coming onto the market. Higher supply of property would mean lower prices, assuming that demand were to stay constant. This would likely drive down rents in shared office space centers.
To the team of real estate experts at Quest Workspaces, the ideas presented at the Bisnow conference imply that Trump’s policies could reduce demand for commercial shared office space due to its repercussions on the tech sector. His talk of restricting immigration, specifically the H-1B Visa program, could put a chokehold on the supply of technology talent migrating to the United States from abroad. This a reduction of skilled labor may be enough to dampen the boom of the US technology sector. Shared office space typically attracts dynamic companies on the cutting edge that flexibility. Indeed, many of our Questers are tech firms seeking virtual offices, conference rooms, or coworking space. Shrinking tech sector productivity may lower demand for shared office space, leading rents to dip for commercial workspace properties.
Regardless of whether or not the ideas at the Bisnow Conference come to fruition, shared office space is a great way to go for expanding companies that want the perks of luxury office space without the commitment of signing a long term lease. For more information about Quest Workspace’s nine shared office space centers, please contact us!
Sources: All economic ideas in this blog post were taken from those presented in Bisnow‘s December 8th, 2016 Conference entitled “NYC 2017 Forecast.” It was held in NYC and presented by JEMB Realty Corporation.