The new issue of RealAccess, a report from Nuveen Real Estate, a TIAA company, takes a look at the impacts of the pandemic on the built environment. The study shows Arizona and other Sunbelt states faring well.
Migration to Sunbelt states was already a strong factor in commercial real estate, and the pandemic accelerated it.
Enhanced appeal to Millennials for space in suburban areas, and the movement of more Baby Boomers into senior housing also are demand drivers.
Migration is contributing to demand for distribution and fulfillment, healthcare, retail, and other supporting services.
Major employers relocating to less expensive Sunbelt locations from more expensive traditional core markets is another major influencer.
The pandemic put development in medical offices and life sciences development – already significant growth sectors – into greater focus.
Since economic growth is expected to slow down, post-pandemic, investors are turning to alternative properties in hopes of maximizing their returns. These include alternative housing – such as single-family rental and manufactured homes – and data centers.
E-commerce penetration went from 11.2 percent in Q3 of 2019 to 14.3 percent year-over-year in 2020. Experts predict another 5 percent -10 percent growth by 2025. Warehouse, supply chain and distribution outlet space is expected to see major growth as a result.
To ensure supply chain consistency, many corporations are localizing activities to areas nearer the end consumer, which should accelerate growth in North American markets.
Finally, single-family home permits were up 14.4 percent at the end 2020, following a slight decline in 2019. This has driven demand in light industrial and warehouse to serve new residents. (Source)