The Strain on the Economy and Its Impact on Leasing Markets
As the media fixates on the 100-day mark of Trump’s second term, everyday Americans are coming to terms with the reality that we’re stuck with him for nearly four more years. While we knew his first term was tough, no one quite anticipated the level of chaos that would unfold this time, especially with the blatant grifting and overreach we’re seeing.
Even more concerning is the damage Trump, along with a compliant Congress, is doing during this term. A clear example is the ongoing tariff mess, especially with China. Consumer prices are rising, and the economic fallout is being felt by businesses and everyday people alike. One key indicator of this economic shift is the turbulence in both office and apartment leasing markets—these sectors often serve as early warning signs for consumer and business confidence, and right now, things are changing.
Commercial Leasing: A Silver Lining Amidst the Chaos
For businesses, the situation is a bit more optimistic. Many entrepreneurs are unsatisfied with their current office leases and are looking to downsize. Developers with vacant office floors are offering enticing deals, and it’s clear that the days of requiring employees to be in the office five or six days a week are behind us.
For many CEOs and managers, forcing employees to sit in offices staring at screens for endless Zoom calls feels like a waste of time, resources, and morale. No amount of free pizza on Fridays can make up for that. Managing teams has become increasingly difficult, and keeping people motivated is harder than ever.
For commercial landlords, especially those managing older Class B office buildings, it’s a tough time. However, for tenants and brokers, there are opportunities in the shifting market. Relocating to a smaller office, with potential cost savings, is becoming a smart business move—one that won’t be questioned by investors or board members. In an uncertain economy, reducing overhead by trimming office space seems like a safe bet.
Residential Renters: Stuck in Limbo
The situation is much more difficult for residential renters. Unlike businesses, renters face a range of challenges when considering relocation: moving costs, choosing a new neighborhood, finding schools for their children, dealing with security concerns, and handling large down payments in competitive markets. These are concerns that businesses don’t typically have to navigate when moving their offices.
Renters are especially hesitant to make any major decisions or commitments in today’s uncertain economic climate, particularly given the ongoing instability caused by Trump’s policies. Many who had planned to move now feel stuck. They may want to relocate, but the current situation makes it nearly impossible.
This sense of fear and uncertainty, driven by the economy, job insecurity, and the fallout from tariffs, is causing renters—whether they have families or not—to stay put. According to a recent Gallup survey, almost 75% of U.S. workers have seen significant changes at their workplaces in the past year, and that anxiety is contributing to higher rents, as landlords capitalize on the situation, avoiding apartment renovations and trying to offset rising property taxes.
Decline in Rental Movement
This combination of economic fear and rising costs is leading to a significant slowdown in renters moving to new apartments or homes. Typically, about 50% of leases that are up for renewal would result in renters moving to new residences. This year, however, that number has dropped to just 30%. Thousands of renters who would normally relocate to better their situation are instead staying put, even if they’re not entirely happy with their current living arrangements.
The Economic Consequences of a Stagnant Rental Market
While some city officials may see the lack of movement as a sign that their cities are retaining residents, the lack of mobility in the rental market is actually problematic. It means that newcomers—such as college students, recent graduates, or workers relocating for jobs—will struggle to find affordable housing in key cities. This could make it harder for businesses to attract top talent, further straining the economy.
The bigger issue here isn’t just Trump’s damaging policies that are costing jobs—it’s the broader sense of uncertainty and stagnation his administration is creating. Millions of Americans are being held back, stuck in a state of limbo, trapped by the constant anxiety and instability.
We’re already seeing these effects in the rental market, but it’s only a matter of time before these problems spread to other sectors, affecting decisions about investments, capital spending, and long-term commitments.
A Bleak Future Ahead
The truth is, nobody willingly signs up for a sinking ship, and right now, that’s exactly what we’re dealing with. The travel and tourism industries are already feeling the pain, and larger problems are on the horizon. Unfortunately, with no relief in sight, it seems we’re in for a rough ride ahead.
