The incoming Donald Trump administration putting a 20% tariff on all products imported into the country could end up being a driver of more manufacturing in Dallas-Fort Worth, supercharging a trend of foreign companies looking for plant space in the Metroplex, according to industrial brokers.
An unnamed Chinese manufacturer looking to open a 400K SF plant in North Texas came across the desk of Champion Partners co-Managing Partner Steve Modory as a prospect in the weeks leading up to Tuesday’s election.
“They felt like [opening a plant in DFW] would have a lot more traction internally if Trump did put tariffs on goods coming in because it’s going to force some of these foreign companies to have to put their manufacturing in the States,” Modory said Wednesday at Bisnow‘s DFW Industrial Outlook event, held at Inbound on Inwood in Farmers Branch. “So it could be a good thing.”
Texas is far better positioned to benefit from the changes expected to be made by the Trump administration than any other state, Modory said.
Laredo, Texas, became ground zero of the nearshoring boom in the wake of the pandemic. Dallas has picked up an outsized piece of that in the years that followed.
“There’s going to be great opportunities here, not just the next four years but the next 10 to 20 years,” Modory said. “We’ll continue to be the place capital is going to want to come to [and where] companies are going to want to come to.”
Lower regulations and taxes could create an environment that is beneficial to commercial real estate, Crow Holdings CEO Michael Levy said. But the Republican Party’s policy on tariffs could have repercussions, he added, and there is a distinct possibility the U.S. could end up in a tariff war.
“The strength of our economy has grown so much … that I think it would be naive to think that other countries are just going to sit by, but this is just unknowable,” Levy said. “It’s not economics for the sake of economics. This policy clearly is economics for the sake of security. It could get ugly or it could be just fine. I don’t think any of us know the answer to that.”
With the prospect of a Republican in the White House and a GOP-controlled Congress, M2G Ventures co-founder Susan Miller said she is curious to see whether Republicans will be able to push policy through quicker. However, that could have its downsides, she said, noting CRE’s financial markets are very sensitive to any fiscal policy changes.
“Over the next three to six months, it probably will be bumpier, with an overall sentiment toward the markets opening back up,” Miller said. “The Treasury system will continue to be volatile, which is a challenge to all of us.”
By: Billy Wadsack
Source: GlobeStreet
