2020: a look ahead at commercial real estate
What are investors, developers, architects, and contractors betting on for 2020? Here are views from varying perspectives – reporter Ralph Bivins, advisory firm Baker Tilly, Bisnow Houston, and commercial real estate firm Avison Young. Veteran Houston real estate writer Ralph Bivins shared his 2020 predictions in a recent newsletter. For commercial real estate, Mr. Bivins’ crystal ball sees: a slight slowdown in industrial construction starts though the sector will remain hot; more new amenity-rich Class AA office space despite the current 20% vacancy rates due to the “flight to quality”; and a denser Inner Loop leading to more multifamily, office, and retail space. HBJ asked experts from advisory firm Baker Tilly, and they see interest in Opportunity Zones remaining high, though they caution that the benefits of these developments vary greatly and should be considered on a deal-by-deal basis. They are optimistic about incentive deals in general, due to the broad discretion Texas cities have when putting together incentive packages targeted to specific industries. Bisnow Houston foresees the healthcare sector to be the city’s largest job creator in 2020. The evolution in healthcare delivery continues to impact providers’ real estate strategies; outpatient facilities are still popular due both to easy patient access relative to the Med Center, and higher revenues for hospitals. CRE company Avison Young laid out the ten general trends they see impacting investment and construction. Highlights include increased resilience in buildings of all types, more emphasis on placemaking in mixed-use developments, a rebirth of retail that incorporate digital and mobile technologies for experiential immersion, and a push for wellness in office spaces to aid HR departments in the war for talent.