AREA looks back over the 2nd half of 2020 with a breakdown of the impact of the pandemic on the commercial real estate markets and the economy, as well as looking to the future and what is expected in 2021.
With input from our senior leadership, our brokers and our analysts, we aim to provide you with the most relevant and recent info including notable deals and important trends in the economy and in the commercial real estate markets.
INDUSTRIAL MARKET: E-commerce growth and re-shoring of U.S. manufacturing is fueling strong industrial growth in KC and throughout the country. That is to say, strong demand and positive market dynamics allows the industrial market to thrive during the pandemic. AREA sees these positive trends continuing in 2021 as the pandemic is accelerating warehouse distribution needs.
MULTIFAMILY MARKET: The pandemic slowed multifamily investment activity in 2020. The outlook remains bullish as investor demand for KC metro area multifamily assets remains strong. As the recovery continues, aided by ultra-low interest rates, expect an uptick in transactions in 2021. With a recovering economy and strong demand, market fundamentals will remain steady.
RETAIL MARKET: All brick and mortar retailers and restaurants have been forced to adapt to the changing consumer environment that was forced on by the pandemic. Retailers will continue to balance and incorporate an omni-channel approach to support online shopping demands.
OFFICE MARKET: New office leases hold asking rates despite increase in sublease space across the metro. Activity ticked up post-lockdown but not to pre-pandemic levels. Vaccine rollout will bring clarity to office users, allowing for increased activity in 2nd half of 2021. The future impact on office usage is yet to be seen, differing by region and industry.
ECONOMIC REVIEW: The pandemic pushed the U.S. economy to the brink in the spring of 2020 with record job losses and total economic disruption. However, with trillions in fiscal aid from Congress and the Fed anchoring interest rates near zero, the economy held on and began to recover as lockdowns lifted. Vaccine breakthroughs and a sooner than expected rollout, bring hope that the economy will recover at a faster clip in the 2nd half of the year.
For more insights, or questions on the information in this report, please reach out to one of our AREA experts.
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