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How could an increase in infrastructure spending impact the commercial real estate market?

We continue to hear rumblings of a push for major infrastructure spending in the U.S. As an international developer that specializes in urban real estate, we are curious to know how infrastructure spending might impact commercial real estate development?

  • Farazad Investments
    April 06, 2018

    As the Government increases infrastructure spending, this indicates the better transportations and facilities; and improving the country's transportation grid will likely increase the economy's potential for future growth. This leads to positive impact on commercial RE market. Unlike UK where people use train, the main transportation in USA is car/plane. It will be very helpful if there is train e.g. bullet train from one city to another major city. Infrastructure always improves growth for real estate!

  • Managing Director, Regent Park Advisors
    April 06, 2018

    Drive up the competition for labor.

  • Sumihiro Investments, LLC
    April 05, 2018

    Assuming US infrastructure spending increases, and this is a big if at this time, commercial real estate should also go up. Why? Infrastructure spend means construction, job and business growth. One of the critical infrastructure spends being targeted is for roads. Assuming the US doesn't create a road to no where (its happened), the road upgrade/creation will likely lead to an existing or to-be-built urban center. The road is being built under the assumption that (a) it will provide greater business growth in the urban center and (b) fix the pot holes. The urban center likely benefit by job and business growth which means a need for more housing, offices and things like data centers. A spend on infrastructure (roads) also means faster distribution which should lead to greater efficiency for companies that can spend more to expand, hence an increase in commercial real estate.

  • SPC Advisors, LLC
    April 10, 2018

    The first thing I would say is that while parts of the country greatly need infrastructure upgrades, it is not clear as to whether the federal government will provide funds or, if they do, how much will be available. There are always infrastructure programs in progress. Public-private partnerships are the largest providers today. Based on the types of development going on in so many cities, if you know the right places to look, infrastructure projects often provide the starting point for new projects.

  • Greenberg Traurig, LLP
    April 14, 2018

    The likely effect of increased infrastructure spending depends a great deal on where and how the funds are spent. Projects chosen will determine winners and losers. For example, the needed repair of our deteriorating roads and bridges will not change much but will allow things to be maintained as they currently exist, so it would not likely make a material difference in development or real estate investment. Adding new public transportation hubs, stations and lines could well have an impact on development and investment by changing commuting patterns and the choices people make about where to live, which spurs new demand for residential and commercial properties for people to live and work. In addition, major new airport construction can keep certain large cities thriving and prevent them from losing their edge to other cities that have better airports and other transportation facilities. Many of our cities have old and deteriorating infrastructure that cannot support the demand and trend of increased densification in urban areas, so those cities that are able to move forward in this regard will have the advantage to thrive in the future.