309. Yes, Tariffs Will Hit Commercial Real Estate Hard | Office Hours

Key Takeaways:

Tariffs will significantly impact commercial real estate, especially industrial and retail sectors, by increasing construction and material costs.

Manufacturing relocation back to the US will take 4-5 years minimum, with full impact potentially taking 10+ years.

Businesses are likely to face immediate price increases due to tariffs, potentially causing economic uncertainty and reduced transactions.

Coastal cities and port-heavy markets may be hit hardest by import/export disruptions.

Opportunities still exist in commercial real estate, particularly in value-add projects involving renovating existing buildings.

Landlords should:

Communicate openly with tenants

Be flexible with lease terms

Prepare for potential vacancies

Focus on long-term strategies

The current economic environment suggests caution, with an emphasis on making steady, conservative investments rather than seeking big wins.

Interest rates may rise to combat inflation caused by tariffs, making current rates attractive for investment.