Numbers of March 10, 2021
Trailing 7-day average for daily Coronavirus cases
As we pass the one-year mark of the pandemic, the light at the end of the tunnel is getting brighter. The recently passed $1.9T stimulus combined with the ongoing vaccine rollout is boosting the 2021 outlook.
- The hard-hit Hotel & Retail sectors will benefit as reduced restrictions encourage travel and shopping.
- Apartment demand may strengthen as household formation re-invigorates amid rising job growth.
- Strong momentum will likely continue for Industrial, though rising supply does pose some risk.
- Vaccinated workers may accelerate the return to the Office, though the future of working remains unclear.
Economic Forecasts for 2021 Increasingly Optimistic
- The recently passed third round of stimulus and the rising rate of vaccinations have bolstered the 2021 outlook
- Economists are forecasting 2021 GDP growth from 5% up to 8.1%, which would be the highest growth since 1950
- The pace of job recovery is expected to accelerate as vaccinations allow more states to loosen restrictions
Economic Recovery Will Bolster Hardest Hit Property Types
- Vaccinations could encourage summer travel, raising Hotel occupancies and restoring some hospitality jobs
- Reduced restrictions could help stabilize Retail, which had negative absorption of 26M sq. ft. last year
Stronger Outlook Provides New Tailwinds for CRE
- Apartments could get a demand boost later in the year as job creation invigorates new household formation
- Industrial is expected to maintain its strong momentum, but risk of elevated supply remains
- While vaccinated workers can return to the Office; uncertainty remains on how quick that recovery will be