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Commercial Real Estate Predictions for 2021

[Updated: Dec 07, 2020 ] Dec 02, 2020 by Marc Rapport

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The second half of 2021 will likely be a better year than 2020…. While there will likely be some social distancing in place, I expect that in the second half, there will be a resurgence in many activities related to leisure, sports, and travel, and more people will return to the office. As cash flows and business activity improves, absorption of vacant offices, retail brick-and-mortars, and lodging will also tend to increase. Continuing job growth will enable more commercial and multifamily tenants to pay rent.
Secondary/ tertiary metro areas [will] do better than the top-tier cities like New York, Boston, San Francisco, the primary reason being affordability. This is based on the job growth prior to the pandemic and the migration trends in these areas, as people are moving out of expensive areas like the Bay Area and New York. Tech workers may also be able to work from home permanently, which will mean increased out-migration from the Bay Area. My bets for the geographic markets that will do well are Atlanta, Raleigh, Charlotte, Jacksonville, the D.C. metro area, Dallas, Phoenix, Boise, Colorado Springs, and Salt Lake City.

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