With Donald Trump back in the White House, his administration’s approach to China is once again in the spotlight—and the implications for U.S. commercial real estate (CRE) markets are significant. In his first term, Trump’s China policy was marked by tariffs, investment restrictions, and a broader decoupling of the U.S. and Chinese economies. Now, in his second term, real estate investors, developers, and stakeholders are bracing for a potential repeat—or even an escalation—of those measures. The consequences could reverberate throughout the U.S. commercial real estate sector in both expected and unexpected ways.
1. A Sharp Decline in Chinese Investment
One of the most immediate ways Trump’s China stance could impact CRE is by discouraging Chinese capital from entering the U.S. market. Between 2013 and 2016, Chinese investors poured tens of billions of dollars into American real estate, purchasing marquee assets like the Waldorf Astoria and numerous high-end office towers and hotels. But during Trump’s first term, inbound investment from China fell sharply due to regulatory crackdowns both in China (capital controls) and the U.S. (CFIUS restrictions).
If Trump doubles down on his previous policies—such as restricting Chinese ownership in strategic U.S. sectors or tightening scrutiny over foreign real estate transactions near military installations—Chinese investors are likely to pull back even further. This could reduce competition for high-end commercial properties in cities like New York, Los Angeles, and San Francisco, potentially impacting prices and liquidity.
2. Increased Volatility in Capital Markets
Trump’s confrontational approach to trade—particularly his penchant for escalating tensions via tariffs or sanctions—can introduce considerable volatility into global capital markets. For the CRE sector, this matters a great deal. Commercial properties are heavily dependent on financing and investor confidence, both of which can be undermined by geopolitical uncertainty.
If markets anticipate prolonged economic tensions between the U.S. and China, we could see rising risk premiums, tighter credit conditions, and reduced investor appetite for large-scale projects. This is especially critical for office towers, retail centers, and industrial parks that depend on long-term planning and funding.
3. Supply Chain Disruptions and Construction Costs
Many commercial developments rely on building materials, fixtures, and equipment that originate in China or are part of a China-linked supply chain. If Trump revives tariffs on Chinese steel, aluminum, glass, or manufactured goods—or escalates trade restrictions—developers may face inflated material costs and delayed delivery schedules.
Higher construction costs could push developers to postpone or cancel new projects altogether, especially in regions where profit margins are already thin. For existing assets, particularly in value-add strategies or redevelopment plays, cost overruns may diminish returns or even render some projects financially unviable.
4. A Boon for Industrial Real Estate?
On the flip side, a renewed decoupling from China could benefit the industrial real estate sector. One of the unintended consequences of Trump’s original trade war was the acceleration of “reshoring” and “nearshoring” strategies by U.S. companies. To reduce dependency on Chinese manufacturing, businesses began investing in domestic production and distribution hubs.
If this trend continues—or gains momentum under Trump’s influence—we may see increased demand for warehouses, logistics centers, and manufacturing facilities, especially in strategic corridors like the Midwest, Inland Empire (California), and Southeast U.S. Markets with strong infrastructure and affordable land may see a boost in industrial development and leasing activity.
5. Changes in Tenant Demand and Leasing Strategies
U.S. commercial real estate is intrinsically tied to the fortunes of global business. Trump’s hawkish China policy could push multinational firms to reconsider their U.S. expansion plans, particularly if they face retaliatory tariffs or regulatory pressures from Beijing. Technology companies, exporters, and Chinese-backed startups may scale back office leases or delay commitments to U.S. commercial spaces.
Additionally, Chinese companies operating in the U.S.—including those in the retail, manufacturing, and technology sectors—may face more rigorous oversight or even forced divestitures, as was threatened in Trump’s prior administration. This could reduce demand for commercial spaces leased by foreign tenants and create vacancies in buildings that catered to Chinese-backed enterprises.
6. Foreign Buyer Retraction and Shift to Other Countries
China was once the leading foreign buyer of U.S. commercial and residential real estate. However, with increasing restrictions and the risk of political backlash, wealthy Chinese individuals and institutions may redirect their real estate investments to other countries perceived as more politically neutral—such as Canada, the U.K., or Australia.
This reallocation of global capital can have long-term implications for U.S. CRE, particularly in the luxury hotel, retail, and office segments that previously benefited from Chinese interest. In some gateway cities, Chinese buyers were instrumental in pushing up values and helping developers close large financing rounds. Losing that capital could lead to a cooling of prices or more reliance on domestic funding sources.
7. Opportunity Zones and Reinvestment of Diverted Capital
One potential wildcard in this discussion is how Trump might use tax incentives and programs like Opportunity Zones to redirect or replace lost foreign capital. During his presidency, Trump championed Opportunity Zones as a way to stimulate investment in distressed communities. A second-term Trump administration could further promote these zones—perhaps as a domestic alternative to Chinese investment—to entice private equity and institutional investors to deploy capital in underdeveloped areas.
If successful, this pivot could create new investment opportunities and unlock growth in secondary or tertiary CRE markets that weren’t previously hotbeds for development. However, such programs would need strong policy support and investor confidence to gain traction at scale.
8. A More Politicized Real Estate Landscape
Perhaps one of the most underappreciated effects of Trump’s China stance is the increasing politicization of real estate investments. Foreign buyers, particularly those from China, may be viewed with suspicion by lawmakers or the general public. Transactions that once flew under the radar may now be subject to congressional hearings, media scrutiny, or regulatory review.
This creates an additional layer of complexity for deal-making and due diligence, particularly for developers and brokers working in regions close to sensitive infrastructure or government installations. Expect more background checks, CFIUS filings, and compliance hurdles if Trump’s administration enacts tougher enforcement measures.
Trump’s approach to China is likely to have a far-reaching impact on the U.S. commercial real estate market. While certain sectors like industrial real estate may benefit from supply chain shifts and domestic investment, others—like luxury office towers and trophy assets in gateway cities—may feel the pinch from a decline in Chinese capital and investor confidence.
The overall picture is one of cautious adaptation. CRE stakeholders should monitor geopolitical developments closely, diversify funding sources, and brace for continued uncertainty. Whether Trump’s hardline stance yields long-term benefits or short-term pain, there’s little doubt it will reshape the real estate investment landscape for years to come.
