Democratic Midterm Sweep Brings Policy Certainty, Not Relief, to Commercial Real Estate

Data center development and trade tariffs remain largely outside congressional reach, leaving landlords and investors to navigate Trump's executive actions.

By the Family Office Real Estate Daily Desk·Monday, November 9, 2026·2 min read

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Democratic Midterm Sweep Brings Policy Certainty, Not Relief, to Commercial Real Estate — Image: editorial illustration · Story sourced from Bisnow

Commercial real estate investors spent the second half of last week recalibrating as markets digested an overwhelming Democratic victory in the midterms. Stock indexes climbed Wednesday, then reversed sharply Thursday in a sell-off that erased $2.5 trillion in market value from the Nasdaq and pushed the index into correction territory. By Friday, markets had recovered some of the losses.

The swing reflected investor uncertainty about the pace of artificial intelligence infrastructure investment, said Jeff DeBoer, chief executive of The Real Estate Roundtable, a Washington trade group. More than half of voters told an NBC exit poll that data centers were a crucial or major factor in their decision to vote. Across statewide races and referendums, voters supported measures limiting data center development in more than 40 local ballot initiatives.

"Maybe 'uncertainty' was the buzzword of the last year, and hopefully 'certainty' will be the buzzword going forward," DeBoer said. "We're much more certain that we're not going to wake up every day and have another wild fluctuation in some sort of policy."

That certainty will not bring relief from higher costs, scarce labor, and expensive debt, however. Those issues stem from President Donald Trump's executive actions and remain outside congressional reach. Trade policy, which has driven up construction costs through tariffs, sits almost entirely within the executive branch under authorities Congress delegated years ago.

"The swing in Congress, the results of the election, are very unlikely to have a significant impact on the president's trade agenda and the tariffs that are in place," Blake Harden, managing director for trade policy at Ernst & Young's Washington Council office, told Reuters. "This is because there is so much trade authority within the executive branch that's been delegated by Congress."

Democrats have floated changing the tariff laws Trump relies on for his protectionist trade regime, but the party remains short of a veto-proof majority. They are also working on a plan to roll back tariffs directed at Canada, The Wall Street Journal reported Thursday. The U.S. war with Iran, which drove up energy costs and added to already elevated inflation, emerged as the top issue for voters. The election was at least in part a referendum on the war, said Hans Nordby, executive managing director of research and investment analytics at Transwestern.

"And it was a 'no' vote," Nordby wrote in an email to Bisnow on Friday. "The new Congress could defund the war or otherwise force a withdrawal. If that were to happen, it would seem likely that oil prices could retreat to prewar levels, which would put downward pressure on inflation." Yields for 10-year U.S. Treasury bonds, a key benchmark for debt costs, declined following the midterms. Cushman & Wakefield analysts wrote in a postelection report that a divided government adds fiscal policy stability that "should be calming for markets," though the Iran war and its downstream impacts on prices and inflation remain the greatest "swing factor for inflation and rates."

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

The midterm outcome removes one layer of policy volatility but leaves the cost structure unchanged. Family offices with capital earmarked for data centers should revisit sponsor underwriting on local entitlement risk. The 40-plus ballot measures restricting data center development signal that permitting timelines will stretch and site-control costs will rise in secondary markets where opposition is organized. Co-GP structures alongside established operators with municipal relationships now carry less execution risk than direct ownership of greenfield sites.

On the debt side, the congressional shift does not alter the rate path. Treasury yields ticked down after the election, but inflation remains elevated because tariffs and energy costs sit outside legislative reach. If Democrats force a withdrawal from Iran, oil could retreat to prewar levels and pull borrowing costs lower. Until then, underwrite bridge debt at current all-in rates of 8% to 9% and assume no Fed cuts before the second half of the year. Floating-rate exposure should be capped or hedged.

Sector allocation favors industrial and multifamily over office. The Democratic Congress may advance housing affordability legislation, but supply constraints and construction costs will persist regardless of the party in power. Industrial fundamentals remain strong as long as trade policy keeps goods flowing through domestic distribution networks. Office remains under pressure from hybrid work and will see no legislative catalyst for lease velocity. Avoid value-add office plays that depend on a return-to-work policy shift — that lever does not exist in the new Congress.

Original reporting

Bisnow

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