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Events and activities in the political arena can have a significant impact on the commercial real estate marketplace. For investors, keeping a close eye on the current political environment will often provide greater insight into the likely effects on real estate prices and availability. Understanding the potential for change in the CRE industry caused by political initiatives can help you make the most appropriate choices when planning your real estate acquisitions and investments in the modern economic environment. Here are some issues to keep an eye on in the upcoming months.

Infrastructure Issues

Depending on the direction taken by the current administration and Congress on infrastructure investment, the viability of certain urban areas for corporate real estate acquisitions and expansions may be reduced. These areas may require extensive work on roads and other transportation options or upgrades to electrical grids and communication networks. Factoring these costs into the overall expense involved in acquiring commercial properties will help you make the most practical investments in today’s economy.

Rural-to-Urban Population Shift

While several socio-economic factors contribute to this phenomenon, the decline in manufacturing and agriculture has resulted in a population shift from rural areas to larger cities and metropolitan areas. This will likely create greater demand and higher prices for real estate acquisitions in these areas. Making sure that you can acquire the right properties for your investment or development requirements will help you take advantage of new opportunities created by population migration in the United States.

ReProp built its foundation on valuing agriculture, and as populations move toward cities, we are left with a higher concentration of savvy farm-entrepreneurs willing to leverage the land to its highest and best use. We work with them routinely to create win-win CRE financing arrangements.

 

Federal Deficits

Increased spending and tax cuts have resulted in a large federal deficit. While this is not an immediate concern for the CRE marketplace, ReProp Financial’s prudent underwriting based on current local appraisals and broad market value of any given commercial real estate financed insulate our portfolio from sudden cold spells in capital investment interest. Loose underwriting based on niche-markets could cause serious issues for investors and could spell real trouble for the entire economy. This is why ReProp keeps our Loan to Value ratios reasonable and underwrites our loans without consideration for the specialty industry. By using caution when purchasing properties and maintaining a conservative financial position, you can ensure the best outcomes for your investments at ReProp Financial.

Climate Change

Despite some political disagreements on the extent or even the existence of climate change, it is having a significant effect on the types of projects and the potential for natural disasters in all areas of the United States. Wildfires are on the rise in the western states and could pose a serious threat to investments made in these areas. Additionally, drought conditions and severe weather must be considered when planning for future investments in the commercial real estate market.
At ReProp Financial, our team works with you to provide the most practical funding for commercial real estate investments and projects in the western half of the United States. We are a specialty lender offering alternative lending options for investors that work with their needs and their ongoing financial obligations. Give our team a call today at 1-800-444-2948 to submit a loan or to discuss your requirements with us. We look forward to the opportunity to serve you.
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