Happy new year! As we kick off 2021, we’ve gathered our predictions but first, it only seems right to assess how accurate our predictions were for last year.
Who could have known? Wow, what a year! Challenges and hardships in abundance but opportunities, too, for good change and to develop resilience we may not have known we had.
2020 scorecard
So, how did we do? Here is our 2020 scorecard:
Certainly, COVID impacted many of the predictions above in terms of volume. And office rents have not yet resolved from 2020 so that impact is yet to be seen.
2021 predictions
Taking what we now know from 2020, here are our thoughts on what 2021 will bring:
Expect fallout from 2020
Some building owners will lose their properties and others who have cash will buy them at a good-sized discount. In addition, some businesses will close and/or be sold at a discount. Those still utilizing office space will solidify their strategy for space with a permanent change to HR policy allowing some level of at-home work.
Social justice, equity, diversity and inclusion efforts will remain at the forefront
Diversity is not a ‘check-the-box’ option. Last year proved that people, companies and professional associations alike will work toward social justice and inclusion for all. We expect to see this continue into 2021 and beyond.
A move in the right economic direction
We will be just fine under the new administration buoyed by the promise of the vaccine and a return to normal. As The Harvard Gazette reports, we may expect this ‘normality’ to start show an impact on our health and the health of the economy mid-year 2021.
Industrial real estate will be healthy
Industrial businesses and their real estate will continue to be healthy with a high level of investor interest.
Multifamily remains strong with a conversative approach
There is still plenty of capital and a strong appetite for multifamily investments, however investors will continue to adopt more conservative underwriting practices and adjust their strategies. All eyes are on rent trends. The Twin Cities will remain a desirable market for local and national investors.
We will see more sale-leaseback considerations
Cash-strapped businesses with good credit will consider a sale-leaseback to leverage owned real estate for cash without disrupting day to day business operations.
Technology solutions will continue to evolve at great pace
We saw a concerted effort to increase smart amenities in response to the pandemic in 2020 and we will continue to see real estate technologies evolve into 2021. Everything from solutions for cleaner air inside buildings to solutions for safe work collaboration environments will be a focus in the new year.
A focus on wellness
Individuals’ well-being will be a focus with companies ensuring physical and mental wellness are priorities even more than before. According to the 2021 Large Employers’ Health Care Strategy and Plan Design Survey, the total cost for health benefits will rise upwards of 5.3% this year in response to expanding wellness benefits amid COVID concerns.
Travel and hospitality will rebound
As people look forward to traveling again and vaccines are distributed, both leisure and business travel will increase. However, more judicious decisions will be made around business travel expenses given the success of virtual meetings and with an eye on the bottom line.
We will see how we have done with our predictions next January. In the meantime, we wish you all the best 2021 has to offer and we are counting on our theme word of promise for the year—the promise of good things to come!
Julie, Ericka and Kate