Optimistic/Depressed: Los Angeles real estate players share mixed feelings about Trump presidency
L.A.’s real estate industry did not initially rush to support Trump’s candidacy in droves. Though local developer Geoffrey Palmer was a generous donor to the Trump Super PAC, a greater number of high-profile industry players put their money “with her,” including Beny Alagem, the Israeli-American entrepreneur who owns the Beverly Hilton; Bill Witte, the CEO of Related California; Karney Management CEO Aliza Guren; office developer Robert Herscu; Downtown L.A. developer Tom Gilmore; and Jeff Hyland, co-founder of Hilton & Hyland, campaign records show.
Now that the results are in, L.A.’s real estate players have different ideas about how a Donald J. Trump presidency will impact the country and the industry. Some are shocked and disappointed — Josh Flagg of Rodeo Realty said “depressed” — by the verdict. Others said Trump’s fiscal policies, including his stated goal of eliminating Dodd Frank, could bring new first-time buyers to the market and stimulate the economy. Several said they believed that the mogul, as commander and chief, would be good for L.A. real estate — if he listens to smart advisors and forms more concrete policies.
“The key for me [in terms of the impact on] real estate is that he hire people with tremendous talent and that he listens to them, which is important,” said John Cushman III of Cushman & Wakefield. “I want to make sure that our president listens and that he doesn’t decide he has all the answers.”
Read on for more thoughts, reactions and predictions from the industry’s bold faced names.
Josh Flagg, broker with Rodeo Realty and star of Bravo TV’s “Million Dollar Listing”
“Depressed is probably the first word that comes to mind [thinking of the results]. But there’s nothing we can do, so we have to just pray that he’s going to be an amazing president and prove us wrong. I’d be the first one to be so happy if he proves us wrong. I’d be the first to say, ‘Sorry, I was wrong. He’s a great president.’
In terms of real estate, this is either going to be great, or disastrous. It makes me think of the George W. Bush days. I do have a little more faith in Trump because he’s more educated than Bush.
I don’t know one person that voted for him. Well, I do, but we didn’t talk about it. Everyone I know has been very disappointed today.
Beth Styne, regional vice president at Coldwell Banker
“I have heard Mr. Trump’s position is to repeal Dodd Frank and if he in fact is able to make that happen, it will loosen some of the lending standards which could result in re-invigorating the first-time buyer market, which is sorely needed in California. In addition, he has talked about tax reform and I have heard that he is in favor of a flat tax across the board. If in fact that is the case, it would mean that everyone would pay taxes without the benefit of a write-off of expenses, including Mr. Trump. No one has a crystal ball, as was proven last night. They were expecting the stock market to fall by 800 points and low and behold the market was up over 250 points today. I am hoping to be pleasantly surprised and hoping the market improves.”
Todd Doney, vice chairman at CBRE
“Donald Trump made several proposals that could benefit our economy and he also made a few that could adversely affect property markets. [In terms of fiscal policy], he wants to increase defense and infrastructure spending and there is a potential for tax reform, which would lower taxes for businesses. He also wants to reduce business regulations. [In terms of trade], he wants tighter border security, and re-negotiating our trade deals and tariffs.
If he expands our fiscal policy, and if [his trade-related policies] are moderated, we will see growth potential in the short term, which supports the fundamentals of real estate — it would drive real estate demand. If you continue with that thought process, if the country feels like it is in a fiscal stimulus, you could see upward pressure on bonds and interest rates higher than we were already anticipating.
Then you look at his trade policies, which is a risk. It could have an effect on the goods going in and out of the country, which could have an effect on the industrial real estate market vacancies. We are going to have to keep an eye on trade deals because that could affect real estate markets. We think the U.S. economy is unlikely to be negatively impacted in the short term as long as there is continuity in our trade policies.
I’m just as curious as the rest of us on what this looks like. I was somewhat encouraged by his acceptance speech last night. He seemed humbled and normal.
It is fascinating that he alienated as many people as he alienated he still got [the presidency]. It will be a case study that is studied for a long time.”
Joyce Rey, head of the estates division at Coldwell Banker Previews International
Sold homes at the National Trump Golf Course development in Rancho Palos Verdes
“My hope is that we can all transcend our differences and move forward with great respect for one another.”
Carl Muhlstein, regional director at JLL
“Look, we have no choice but to try and be positive. We all were desperate for change. It is too bad we didn’t have more of a role model. I think domestic real estate might be one of the bright spots in this outcome. I’m stunned and speechless and taking it day by day.”
John Cushman III, chairman of global transactions at Cushman & Wakefield
“My take on it is that the the lack of certainty [during the election cycle] has caused volatility in markets. That volatility doesn’t go away because Trump is the president because the policies he really stands for have not been outlined.
We may be at the end of a cycle — I personally think we are. Often after an election, there is recession, and in this case it is not because of the election — markets have not been robust. We need to grow the GDP to 4 percent and then the real estate industry will thrive. So my take on it is that banks will continue to be very careful on the debt side in lending. Real estate is still highly desirable as an asset class, but I think that leasing will slow down, residential housing on the high end in New York will dramatically slowdown and the housing in Downtown Los Angeles is a question mark — when does it get overheated?”
Bob Safai, president of Madison Partners
“I think Trump has been active with banks, understands how regulations affect liquidity in the capital markets, and I think he’s going to do everything he can so that financial aspects of this country improve.
This is our first business-driven president, and I hope he surrounds himself with the right experts — which I think he will. Business has to go on as usual. This year, because of the election, there was a lot of people not making decisions, and I think that’s going to change. I’m hoping the capital flow continues and we get back to business — I think it will pick up.
I don’t think it’s going to elevate the real estate profession to have a developer in office. Foremost, he’s a businessman. He just pulled off one of the most amazing feats, in that sense, in the history of the world. The country comes first: real estate is what we do, not who we are. The country comes before your pocket. I think he understands capital markets and free trade that will help business, but running a country requires so much more than just that.”
Bob Foster, president of Greater Los Angeles for Coldwell Banker
Was also involved with the National Trump Golf Course, said he worked closely with Trump for two years
“It’s too soon to call but I’m cautiously optimistic that the election both locally and nationally will be positive for real estate. He understands what’s necessary to help move our housing, specifically in California, where at the entry level we price people out of the marketplace and it hurts the upper end of the market because of a domino effect.”
Linda D’Ambrosi, broker with Sotheby’s International
Also sold homes at Trump’s Rancho Palos Verdes development
“I know him very well. I know he can lead and will do a great job. He is a brilliant man who thinks outside the box and really gets the job done. He and the city (of Palos Verdes) worked well together, and they respect him.”
Michael Nourmand, president of Nourmand & Associates
“I don’t expect much to change. I think people are surprised by the results, thinking that the world’s gonna end, but I don’t think it’s going to have that much of an effect. Unless [Trump] had a helicopter dropping bags of cash for people to grab, it’s not as big of a deal as people are making.
The Fed was going to raise interest rate in December regardless of who became president. The president has limited influence on the economy. There’ll probably be some tax cuts, which will particularly benefit those on the Westside. There might be an argument for people wanting to sell now, thinking ‘Oh what’s going to happen?,’ but interest rates and the supply of housing are much more important factors for the housing market.”