Markets in Focus
Though the global economy is in a much better place and vaccines have generally made it much safer for people to gather, the “Great Return” that many were hoping for to commercial office space in the back half of 2021 has not still not occurred. Whether it be concerns over the Delta variant or employers simply trying to adapt to employee’s new desire to work more from home, office space leasing activity remains well below pre-pandemic levels. However, activity is up significantly from the lows of Q121 and it is believed that this trend will continue into 2022.
On the other hand, the multifamily and industrial sectors continue to have strong performances throughout the pandemic. National apartment rents continue to climb, and vacancy rates saw their largest drop in Q2 2021 as inflation and increased housing demand continue to cause upward pricing pressure. As for the industrial side, warehouse space continues to be a hot commodity as the increase in e-commerce and the need for storage in a time where supply chain difficulties continue to be an everyday problem for most business have created significant pricing pressure for this sector. According to Chicago-based Cushman & Wakefield PLC, vacancy stood at 4.1% at the end of Q3 and average rents soared to $7.18 per square foot, both all-time records.¹