In spite of not being very chummy with Wall Street and those who run it through much of his campaign, President-elect Donald Trump is turning to them to be a part of his administration and his agenda.
Trump has chosen former Goldman Sachs executive Steven Mnuchin as Treasury Secretary, investor Wilbur Ross as Commerce Secretary, and Wall Street deal lawyer Jay Clayton as director of the Securities and Exchange Commission.
Whether that means happy days are here again for the financial sector remains to be seen. Until all his appointments are confirmed by Congress, it’s all speculation.
The speculation largely points to a Trump administration that is friendly toward lenders. Loosening regulations on banks would likely mean an increase in lending for commercial real estate development. Or does it?
With more traditional financing opportunities encouraging projects, owners, developers and borrowers can look to direct private lenders like Kennedy Funding for fast, short-term financing to get projects moving. The funding can be used for land acquisition, or to pay operating costs during construction.
Even if regulations remain stiffer than some would like, it would be an opportunity for direct private lenders to step up where traditional lenders may not be able to.
In a New York Times analysis, Clayton’s appointment is seen as a sign the SEC will be part of the Trump agenda to reduce regulations on the financial sector, including rolling back the Dodd-Frank Act.
Some ways deregulation could impact commercial real estate development were pointed out in a recent Forbes article. With lower compliance costs, smaller banks could loosen the pursestrings, stimulating development. Easing of land-use and zoning regulations could also stimulate building projects, especially in the residential sector, which includes multifamily developments.