Commercial Real Estate Forecast: Urban Multifamily Properties Will Rebound in 2021
Moody’s Analytics today announced new forecasts for commercial real estate (CRE) rents and vacancies covering eight property types and more than 3,000 submarkets across the United States. These forecasts reflect the latest Q1 data on US CRE markets available via the REIS platform, the cornerstone of Moody's Analytics CRE Solutions.
The outlook for the apartment sector has taken a positive turn, with effective rents expected to return to near pre-pandemic levels in 2022. National average effective rents fell a record
“We anticipate that the combination of returnees and first-time movers, now attracted by lower rents, will be enough to stabilize the apartment sector in key urban centers,” said Thomas LaSalvia, Senior CRE Economist at Moody’s Analytics, “However, the office sector in these areas still has a ways to go before recovery.”
Much uncertainty surrounds the fate of the office sector and this will likely lead to continuing distress this year. Vacancy rates are forecast to rise to
Similarly, we expect the retail sector to continue to deteriorate in 2021 with national average effective retail rents forecast to fall a further
As the retail sector suffers the consequence of the shift to e-commerce, the outlook for the industrial sector is looking up. “We expect the industrial sector to benefit from tailwinds from the robust economic forecast and the continued rise in e-commerce,” said Dr. LaSalvia, “The need to warehouse inventory and match consumers’ expectations for expedient shipping will provide more than enough absorption to push rents higher and vacancies lower.”
We now expect the national average industrial sector effective rent to rise by
CRE market participants can access these forecasts through the Moody’s Analytics REIS platform and read more on the Moody’s Analytics CRE Solutions Insights page.
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