Why Real Estate Stocks Took a Hit as Developers Cheered Trump

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Investors fear tariffs, deportation and high rates. Builders bet on deregulation and taxes.

Patrick Clark, Prashant Gopal, and Natalie WongMark Wiseman, former chair of AIMCo and former CEO of CPPIB, joins BNN Bloomberg to talk about investing in real estate and alternative assets in the market.The day after Trump’s reelection, even as builders and landlords personally celebrated his win, investors had a grim answer. Property stocks fell 2.6% that day, making real estate the S&P 500’s worst-performing sector. D.R. Horton, the largest US homebuilder, fell 3.8%.

The buoyant mood reflects the central tension of the pre-inaugural period, in which it’s hard to know whether Trump’s cabinet picks will even be approved, let alone how they’ll attempt to carry out the president-elect’s campaign promises. For the real estate crowd, that means anchoring hopes for tax cuts and deregulation. Across-the-board tariffs are “more of a negotiating tactic,” says Henry Manoucheri, chief executive officer of apartment landlord Universe Holdings.

The first Trump administration delivered key wins for the industry. The Tax Cuts and Jobs Act, which Trump signed into law in 2017, created a deduction for business partnerships that benefited many real estate firms and a new way to defer and eliminate capital gains by investing in underserved communities through the creation of “opportunity zones.”

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