WASHINGTON – (By Dale King, Realty News Report) — The Urban Land Institute’s spring 2021 real estate economic report anticipates a rebound from coronavirus pandemic slowdowns, with the single-family housing sector, hotel and industrial markets set to grow dramatically over the next three years, but office and retail improvement lagging, says a report released during a recent members-only seminar.
However, Office Vacancy Continuing to Rise
However, office vacancy rates are expected to rise by a three-year average of 16.2%, above the average of 14.3%. Steady office growth isn’t in the cards until 2023, the report says.
In the meantime, retail trade is nudging up a tad and should hit a growth level of 9.8% level, just below the average of 9.9%.
Industrial growth will remain strong, but other property classes may be slower to recover from low pandemic levels.
42 Experts Surveyed
The conclusions are based on an April-May survey of 42 economists and analysts at 39 leading real estate organizations.
“While the fall 2020 forecast was notable in its reversal of many of the pessimistic forecasts from spring 2020, the current expectation goes even further, with several forecasts now ahead of long-term averages,” said ULI leading member William Maher, director of strategy and research, RCLCO.
“Among the 2021–2023 metrics predicted to outpace long-term averages are GDP and employment growth, the unemployment rate, real estate transaction volumes, warehouse and apartment occupancy, rent growth, single-family housing starts and price appreciation.”
The A-List – Housing and Warehousing
Other key findings in the report include:
- Housing starts exceeded the 20-year average in 2020 for the first time since the Great Financial Crisis. Housing starts are expected to continue to increase to 1.1 million in 2021, 1.2 million in 2022 and remain there in 2023.
- Industrial again leads all property types, with an average return of 9.8%, followed by apartment at 6.2%, office at 3.6% and retail at 2.5%.
- National vacancy and availability rates are expected to continue performing below the 20-year average for industrial and apartments, but above average for office.
- Over the next three years, availability for industrial property will average 7.3%, below the 20-year average of 10.4 percent, and apartments will average 4.4%, below the average of 5.3 percent.
- The rent growth expectation for the next three years is likely to be uneven depending on the sector. Industrial rent growth continues to lead all sectors with an average of 3.6% between 2021-2023, followed by multifamily at 2.6%, retail at -0.1% and office at -0.3 percent.
ULI Chairman Jonathan Brinsden
The Urban Land Institute, or ULI, is a global nonprofit research and education organization.
Houstonian Jonathan Brinsden, serves as chairman of ULI Americas. Brinsden, who had been with the Midway company in Houston, was recently named president of Irvine Company’s Office Properties in Newport Beach, Calif.
At Irvine Co., Brinsden will be overseeing a 53-million-SF operating portfolio that includes properties in Orange County, San Diego, West Los Angeles, Silicon Valley, Chicago and New York City.
May 27, 2021 Realty News Report Copyright 2021
Photo Credit: Ralph Bivins, Realty News Report. Copyright 2021
File: ULI Economic Forecast Survey: Rebound Ahead
File: (2)Jonathan Brinsden, Chairman of ULI Americas. ULI Economic Forecast Survey. Irvine Co. Midway.
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