Commercial Real Estate Trends to Watch in 2020
CBRE is the largest commercial real estate services company in the world. Each year, the firm produces a comprehensive outlook for the year ahead based on expert opinions, historical data, and current statistics. According to the company’s 2020 Real Estate Outlook Report, the United States economy is expected to continue its long expansion in 2020, and experts predict the real estate industry will follow suit, maintaining solid growth despite economic and political uncertainties.
As we prepare to usher in a new decade, we’re summarizing the major commercial real estate trends expected in the year ahead:
- Office Needs Shifting. Growth of traditional office jobs are expected to slow slightly in 2020, but the flexible-office sector will continue on an upward trajectory. CBRE predicts that new construction will outpace net absorption, increasing the vacancy rate, and slowing rent growth just slightly.
- Industrial & Logistics Remain Strong. Though trade unrest will continue into the new year, there will likely be minimal immediate impact on the need for industrial and logistical commercial properties such as storage warehouses and shipping facilities. CBRE predicts vacancies in this space will remain tight, and rents will increase by an average of 5%.
- Retail Still in Demand. Ongoing e-commerce growth is undeniable, but there is still a strong need for brick-and-mortar retail space. Predicted trends for 2020 include the conversion of outdated mall space to mix-used complexes, Generation Z boosting foot traffic, and health and wellness entities occupying more retail space.
- Multifamily Units Favorable. Multifamily housing will remain a reliable investment choice through 2020. While demand may decrease slightly due to steady new supply, the overall vacancy rate will remain low. One industry-wide concern in this category is potential rent control legislation. While this isn’t a concern for investors in the Lowcountry yet, it’s something to keep an eye on.
- Alternative Investments to Gain Popularity. Alternative commercial categories outside traditional office, retail and industrial space will become more widespread in the upcoming year. Expect to see more self-storage, medical offices, data centers, research facilities and senior and student housing at the forefront of investment opportunities. Considering these types of properties can open up your investment opportunities and widen the scope of your portfolio.
We are experts in the Lowcountry’s commercial real estate landscape and are well connected to the community. Whether you’re a new investor looking to purchase your first property in 2020, are looking to grow your portfolio, or just want to chat about a plan that’s right for you, the Simply Commercial team is here to help. Get in touch and let us assist you in making your investment and business goals a reality in the decade ahead.
· CBRE Real Estate Market Outlook 2020
· CBRE Expects Commercial Real Estate Market to Continue to Grow in 2020, Despite Economic and Political Uncertainties