Intro: The Overlooked Forces Reshaping Real Estate Profitability
Interest rates get the headlines. But it’s tariffs, labor shortages, and immigration policy that are quietly driving costs and reshaping margins for real estate investment managers. On Navatar’s A Game podcast, David Valger, President of DVO Real Estate, broke down how policy volatility hits operators hard—and what forward-thinking firms can do about it.
Tariffs: A Hidden Tax on Construction and Renovation
Many real estate firms rely on imported materials for value-add renovations—stone, appliances, steel, and flooring among them. When tariffs spike, margins suffer.
“When tariffs go up, our costs go up—and that affects the bottom line,” says Valger.
Supporting Insight: In May 2024, the U.S. reimposed tariffs on $18 billion of Chinese imports, directly impacting key construction categories. ( Reuters )
How Navatar Helps: CRM isn’t just about tracking deals. Navatar helps firms surface cost exposure across portfolios, flag at-risk assets, and align teams early—so investment decisions reflect real risk.
Labor: Scarce, Expensive, and Hard to Replace
The construction labor shortage is worsening—and immigration bottlenecks are a major cause.
“Without legal immigration, there’s no scalable way to build or maintain housing stock,” Valger explains.
Supporting Insight: The Associated Builders and Contractors estimate a 500,000-worker shortfall in U.S. construction for 2024. ( ABC Workforce Report )
How Navatar Helps: With dynamic dashboards and team-wide visibility, Navatar lets investment managers track labor volatility by region, monitor cost trends, and dynamically adjust underwriting assumptions across opportunities.
Immigration: The Silent Driver of Housing Economics
Immigrants build housing. Immigrants live in housing. Legal immigration supports both supply and demand.
“This isn’t political—it’s economic. Immigration supports the housing market at every level,” says Valger.
Supporting Insight: Immigrants make up 30% of the U.S. construction workforce and over 20% of renter households. ( BPC Report )
How Navatar Helps: Navatar allows deal teams to map demographic shifts to investment zones, track submarket dynamics, and run firmwide analytics on tenant trends—helping you move where the demand is moving.
Uncertainty Freezes Capital—Speed Wins
“Investors hit pause when they don’t know where costs are going,” Valger notes.
Whether it’s trade policy or labor volatility, institutional capital moves slower when risk isn’t quantified. Forward-thinking firms are using platforms like Navatar to turn unknowns into signals—and signals into conviction.
Supporting Insight: The IMF warned that escalating tariffs in 2025 could reduce U.S. GDP by 0.5%, reflecting broader uncertainty across capital markets. ( IMF Global Outlook )
What This Means for Investors
- Factor macro volatility into your investment screens—not just rent trends
- Track supply chain exposure, labor disruption, and demographic movement in real time
- Don’t wait for perfect clarity—move with confidence built on better information
Responding to macro volatility requires more than spreadsheets. Navatar helps real estate investors track geopolitical risk, uncover exposure, and align teams in real time. Built for firms who see CRM as a competitive advantage—not just a record-keeping system.