Real estate doyen Sam Zell expressed confidence that Donald Trump's election to the US presidency will benefit the country in keynote remarks at the PERE Summit: New York on Tuesday.
The Equity Group Investments chairman said that, counter to popular opinion within the private real estate sector, Trump's victory could herald a number of benefits for it.
According to a poll run by PERE, more than 70 percent of respondents felt that a Hillary Clinton victory would have been more beneficial for private real estate investors.
But Zell said: “I'm optimistic Trump can make a difference. 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…I think it's a very positive scenario for the US and the world.”
President-elect Trump mounted a controversial campaign against established politics, positioning himself as the anti-globalization candidate opposite Democratic nominee Clinton. Trump's campaign included a promise to build a wall along the Mexico-US border to stop illegal immigration, which social activists and business interests alike have condemned.
In response to Trump's rhetoric regarding the wall, Zell said: “The word wall has all kinds of ramifications to it…Securing the border is a way of saying 'let's enforce the (immigration) rules that exist. We don't need any new walls if we enforce the (rules that exist).”
Trump also spoke against foreign interests, campaigning against free trade agreements and labeling China a currency manipulator.
In the last week, several private equity real estate executives expressed concern that Chinese investors would pause real estate investments in the US. According to property transactions research firm Real Capital Analytics, Chinese investors accounted for more than 20 percent of all deals in gateway US cities and would therefore deal a great blow to deal volume if they were to pause their investing programs.
However, Zell said these concerns were overblown. “I can't imagine, assuming the rules stay the way they are, why continued flows of foreign investment will not continue to flow, both into London and the US,” he said. “They represent the cleanest markets in the world…I don't think there's anything, either in Brexit or Trump, that will discourage those flows going forward.”
Trump also talked about reducing or abolishing financial regulations, including Dodd Frank. However, Zell did not predict that a tapering down of financial regulation would impact real estate markets, both in terms of occupation and investment.