MIPIM Wraps With One Thought On Everyone’s Mind: What’s Trump Going to Do?

It was clear from the first question during the March 11 keynote of the annual MIPIM global real estate convention in Cannes, France, what the topic on everybody’s mind was going to be this year.

Mario Draghi, the former Italian prime minister and the ex-president of the European Central Bank, was asked his thoughts about President Donald Trump and what the United States’ relationship with Europe is going to be like now. 

“People like me, and most of you, have grown up basically thinking that we share with the United States much more than we have something to share with Russia or with China,” Draghi said. “The question that is deep, and without an answer, is will all commonality continue … during this cultural revolution that is taking place in the United States?”

“The big ‘T,’” as AEW Capital Management Europe CEO Rob Wilkinson put it, was on everybody’s mind during the convention as they wondered what the impact of Trump’s policies and tariffs would be as they try to finance deals, get development projects off the ground, convince Europeans to invest in U.S. real estate, or branch off to create European divisions.

One U.K. property owner described the situation as a “cocktail of confusion” for the real estate industry, which is sometimes scrambling to keep up with the latest Trump news while simultaneously worrying about a potential recession in the U.S. And the political situation seems to be top of mind for people in the industry more so than in years past.

“The conversation around geopolitical uncertainty is real,” said Michael Lehrman, president of the United Kingdom for Newmark (NMRK) and former CEO of BGC Real Estate. “Investors have told us they can’t remember a time when the market talked about geopolitical uncertainty so much and how this will be reflected in pricing.”

Lehrman added that the main worry was how all of this was going to “affect real estate fundamentals.”

An American working for a London developer, who asked not to be named, said the issue has caused “paralysis to everyone” over the “instability” of the quick, and hard-to-predict, pace of Trump 2.0.

While candidate Trump came up a bit during MIPIM last year, most people in the industry were hopeful that once the election ended, the topic would exhaust itself. That clearly hasn’t been the case.

“The concept of everything post-election that things are going to be stable is not going to pan out,” said Max LaVictoire, managing director of investor relations for student housing developer Landmark Properties, which recently ventured into the U.K. market.

Instead, Trump’s quick and sweeping policy decisions — from giving Elon Musk near carte blanche to gut the federal government to berating Ukrainian President Volodymyr Zelenskyy in front of cameras in the Oval Office — has everybody scratching their heads about what will happen next. (It should be noted that, whether intentionally or not, the U.S. booth was across the aisle from the Ukraine booth on the MIPIM convention floor this year.)

“When the election happened, people were feeling more bullish because people thought it was going to be a pro-business administration,” said Thibault Adrien, CEO of single-family rental operator Lafayette Real Estate. “But with what’s going on right now I think people are just stopping and trying to understand — if there’s anything to be understood — what’s going on right now.”

Both LaVictorie and AEW’s Wilkinson said Europeans were thinking about starting to return to invest in the U.S. before the election, but the relative chaos from the White House has caused them to pause plans and retreat back to their home markets for the time being.

“Let’s just wait and see, focus back on my market,” Wilkinson said of investor sentiment. “It’ll come back, but it’ll be a slower burn than the GFC [Global Financial Crisis].”

The Trump administration’s tariffs policy has caused the most uncertainty for the real estate industry, with fears it could turn into a global trade war and lead to a recession. 

Trump has imposed — then pulled back, then imposed — numerous tariffs on different countries’ goods. He most recently threatened a 200 percent tariff on wine and champagne coming from Europe, and implemented a large 25 percent one on steel and aluminum coming into the U.S. from anywhere. The latter is not exactly the best news for developers who rely on those materials for construction. 

Europeans hoping for the perspective of heavy hitters at the convention’s annual panel “Trends in U.S. Real Estate and Capital Markets” were disappointed as those bankers swiftly dodged the question during the panel’s Q&A.

MIPIM attendees on the development side said they’ve been monitoring the potential effect on material costs the tariffs could have, but so far it’s been hard to say.

“We have not seen the impact yet,” said Adrien, who has a build-to-rent platform called Marquis Homes. “Vendors have not increased their pricing on our ongoing projects, so we have to rely on analysts in the space.”

Adrien said he’s seen some projections that showed tariffs will increase his construction costs 2 to 3 percent, something he’s not too concerned with. “It’s completely manageable for us, especially because we do [construction] in-house, so I feel like we have better control,” he said. “It shouldn’t impact our underwriting on the 1,500 lots that we need to build.”

Sara Queen, managing director and head of real estate equity for MetLife Investment Management, said during a panel that when she returned to New York from the convention she was going to have to relook at the construction deals MetLife has in its pipeline and evaluate if they still make sense.

“One of the things that we have to do next week is we have to go back through and [see] whether we locked in rates on steel,” Queen said last week. “If we haven’t, is it worth continuing to spend money on it if we know it’s not going to pencil?”

And, while people are hoping the U.S. tariffs are going to just be a temporary measure, Draghi warned people during his keynote not to get their hopes up.

“People think it’s going to be temporary — well, it’s not going to be temporary,” he said. “Why would people say that tariffs would be a source of tax revenue — which is something the U.S. government is counting on — if they were going to be temporary? They’re going to stay.”

Tariffs aside, many people said the questions around Trump haven’t squashed any deals between U.S. and European firms so far. Rather, they insist the uncertainty is something that has to be baked into dealmaking, and that it may delay some deals as people wait to see how it all shakes out.

But one thing it has done is create an unease among some Americans traveling to the continent and talking to European investors.

“It’s starting to feel a little bit embarrassing to be American again,” said Aaron Block, co-founder and managing partner of proptech venture capital firm MetaProp, adding he hasn’t felt this way since the days of President George W. Bush. “I feel like we’re right back there.”

Of course the convention wasn’t all dominated by talk of Trump or of the rain storms throughout the week. The main mood at MIPIM was positive as people expect more deals to close this year.

Dean Shapiro, global head of development for Oxford Properties Group, said other recent MIPIM conferences felt more like they were being used for information gathering for investors, but that has shifted for 2025.

“The mood is certainly better every year — people seem to be investing again,” Shapiro said. “There’s always caution, but it feels more transactional now.”

And Shapiro wasn’t the only one singing that positive tune about the industry.

“The sentiment has been a lot positive,” Landmark’s LaVictoire said. “People are looking for a reason to do something as supposed to not do something.”

Oxford, the real estate arm of the Canadian pension fund Omers, has been looking for opportunities to invest in office and retail projects, especially in New York, as the recovery of those markets seems to be in full swing.

“We see opportunity, we see history repeating itself,” Shapiro said, pointing to the recovery in the wake of the GFC, where there was a lack of high-quality office space on the market — something Oxford partnered with Related Companies to address with the massive Hudson Yards project. “There still is an awful lot of toxicity on the whole idea of office, but it’s irrational.”

Indeed, what a difference a year makes regarding office. Many last year viewed the asset class as a four-letter word. That’s started to change in certain markets, especially New York, where Manhattan’s strength spurred Blackstone (BX) for one to make its first office acquisition in the borough in almost three years.

Michael Lascher, a senior managing director and global head of real estate debt capital markets for Blackstone, confirmed during a panel that the private equity giant was under contract to buy a 49 percent stake in 1345 Avenue of the Americas from Fisher Brothers for a yet-unknown price.

“[It’s a] really high-quality office building, a great partner, and really a testament to the strength of the New York City office market,” Lascher said. 

Panelists said that “banks are back” with liquidity to lend again, while others said the time is ripe for certain developers.

“There’s never been a better time to be a borrower,” said Laurent Morali, the CEO of Kushner Companies, during “The Big Picture for Real Estate Today” panel. “If you’re looking to borrow money to refinance an asset or acquire an asset, you’re going to get a full array of proposals from all types of lenders.”

On the technology side, MetaProp’s Block agreed that it feels like “the clouds have parted” and the mood’s sunnier again. And much of the attention has been on the artificial intelligence market, with Block joking that “six out of 10 of the people I met have changed their surname to A.I.”

However, even with the increased optimism, there’s a realization in the industry to temper expectations for 2025. 

“We’re still not completely out of the woods,” AEW’s Wilkinson said. “People have adapted, they’ve seen the adjustments. They still feel there’s a little bit of inertia in the market.”

Peggy DaSilva, the head of asset management for PIMCO Prime Real Estate in the United States, said the mantra of staying alive until 2025 might need to be altered as people adjust their expectations for the year.

“It’s hardly … back to what we were seeing in the early 2020s,” DaSilva said during a panel. “Hopefully, we’ll get there. Maybe now we need a slogan for 2026.”

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.