Exterior of White House The next occupant of the White house is expected to drive changes in fiscal policy, among other areas.

CALABASAS, CA—While the “unanticipated turn of events’ that was Donald Trump’s election to the presidency coincides with healthy real estate fundamentals, Marcus & Millichap is anticipating changes in the investment landscape along with the change in administration. That will be the case even as economic momentum and positive demographics help help to sustain those fundamentals.

In a special report released the week after Trump’s remarkable upset victory, Marcus & Millichap notes that the transition from the Obama era to the Trump regime will take months, “and many of the modifications will transpire over years.” However, commercial real estate investors are likely to see pronounced change in five areas, including fiscal policy.

“With a united Congress and White House, Republicans will likely coalesce around a combination of tax cuts and increased investment into infrastructure and defense,” the report states. “In addition, much of the gridlock that stalled past budgets and debt ceiling increases could be avoided, bypassing the debates and gamesmanship that plagued Congress” over the preceding eight years. One product of a clear path could be the elimination of carried interest, “causing developers and some investor syndicates to reconsider their business structures.”

Infrastructure represents another area likely to spur change, thanks to the president-elect’s proposal for a “dramatic increase” in infrastructure development. “While there has long been consensus that additional infrastructure investment would be beneficial, the significant costs surrounding such an undertaking have stalled action thus far,” according to Marcus & Millichap’s report. “Should meaningful additional infrastructure development be undertaken, it could yield substantive returns, including the creation of jobs and increased efficiency. Roads, transit, bridges, the electrical grid and numerous other projects would vie for funding, potentially benefiting surrounding commercial properties.”

Post-election, according to Marcus & Millichap, “trends have remained stable enough to sustain the probability of a rate increase at the Federal Reserve’s December meeting, though a significant disruption would cause the Fed to reconsider.” This sets the stage for changes in monetary policy. “If greater fiscal engagement including increased spending and reduced taxes accelerates economic growth as Trump believes, then higher inflationary forces will merit close monitoring by the Federal Reserve. The accelerated economic growth and ensuing inflationary pressure could prompt a quicker pace of rate hikes that are potentially more aggressive” than the relatively dovish stance the Fed has taken over the past year.

Regulatory policy represents another realm in which considerable change may be in the offing. “A main point of agreement among the Republican Party is the desire to reduce regulations in several key areas of the economy,” according to the Marcus & Millichap special report. “This could include the repeal of the Dodd-Frank Act, which introduced numerous regulations on banking and Wall Street in an effort to protect consumers and investors. A rollback of environmental restrictions and increased access to federal land for oil and gas drilling could also emerge.”

Last but certainly not least is trade policy. “A cornerstone of the president-elect’s campaign focused on the rejection of notable trade agreements such as NAFTA and TPP,” the report states. “Based on this, future trade agreements would likely carry a more protectionist tone in an effort to bolster American manufacturing and employment. While these policies could crimp the flow of imports and exports, a potential increase in the US dollar value could partially offset the rising cost of foreign goods.”

One industry veteran who sees the prospect of such change as wholly positive is Sam Zell. “I’m optimistic Trump can make a difference,” Zell said Tuesday in a keynote address at the PERE Summit: New York. “We in the US have been through eight years attempting redistribution at the cost of growth. [Now] we’re likely to see a reorientation toward growth and a reduction in the regulatory environment.” All in all, Zell said, “I think it’s a very positive scenario for the US and the world.”