Real estate 2021 crystal ball
- Office – demand remains sluggish as tenants re-evaluate their space needs and plan for workers to gradually return to the office throughout 2021. Vacancy rates may not peak until early 2022.
- Retail – curbside pickup remains important as brick-and-mortar sales are expected to rebound while e-commerce sales are expected to stall. CBRE forecasts a decline in e-commerce sales growth for the first time since 2008.
- Industrial – including logistics, nearly 250 million s.f. of industrial net absorption is expected this year. Warehouse rents remain high and vacancy will remain low.
- Data centers – the reliance on technology became clear in 2020, leading to 373.6 megawatts of data center development now in construction. Total data center inventory is forecast to grow 13.8%.
- Hotels – hospitality companies are expected to recover over 50% of revenue in 2021, but full industry recovery isn’t expected until 2023, though it could be 2025 for luxury properties.
- Multifamily – demand will remain strong with prices of properties expected to continue rising at a rate of 6% or higher.
- Residential – mortgage rates will slowly climb from the record lows of 2020, but existing home sales are expected to go up 7%, housing starts will be up 9%, and the median price for existing home sales will be up 5.7%.