In response to the volatility introduced by evolving U.S. tariff policies, Ryan Severino, Chief Economist at BGO, has recalibrated his AI-driven models to better forecast impacts on the commercial real estate (CRE) sector. Recognizing that traditional datasets and historical patterns have become less predictive, Severino integrated behavioral signals and decision-making patterns from previous administrations into his models. This approach aims to simulate the current administration's negotiation tactics more accurately, offering a nuanced perspective on how trade policies might influence CRE dynamics.
Severino's models suggest that the administration is unlikely to retreat from its tariff stance, regardless of external pressures. This persistent uncertainty is causing delays in leasing decisions, as potential tenants face increased scrutiny regarding their business operations and exposure to tariff risks. Additionally, equity capital markets are experiencing extended due diligence periods, deal repricing, and, in some cases, transaction failures. Despite these challenges, Severino maintains a cautiously optimistic outlook, noting that while the CRE market is recovering, it is doing so at a slower pace due to the prevailing uncertainties.
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