Econometric Advisors ViewPoints

CBRE EA expects hotel revenue per available room to make a full recovery to pre-COVID-19 levels by 2024. Economy hotels have led the recovery, but the return of business and group travel will boost demand for upper-scale hotels.

U.S. multifamily remained the preferred investment sector in 2020, with its share of overall transaction activity reaching 36% - its largest share since 2001. EA expects national multifamily fundamentals to begin to recover in mid-2022, with secondary markets leading the recovery, followed by major metros.

The ongoing pandemic, fueled by the COVID-19 virus, has had dramatic effects on the industrial and retail sectors, particularly e-commerce and omni-channel adoption. The expedited shift toward e-commerce during the pandemic accelerated trends, benefitting industrial demand and eroding brick-and-mortar retail sales.

The return of group and business travel is a major factor in hotels’ recovery. A more remote workforce will demand more in-person connection through business travel and conventions.

With the pandemic continuing to affect the U.S. economy, investors are wondering what's in store for commercial real estate. Our investment performance forecast viewpoint explores the outlook for each property sector, cap rates, the lending market and more.

Due to the counterbalancing effects of remote working potentially causing a decline in the need for office space and social distancing requirements potentially increasing office space needs, CBRE forecasts only a modest to moderate decline in office demand in the next five years.

An uptick in COVID-19 cases threatens to derail a streak of nearly three months of positive hotel occupancy gains, but CBRE EA still expects a strong hotel revenue recovery in 2021 and 2022.

Despite the staggering rise of unemployment and negative GDP figures, the office sector benefited from a fast adaptation of work-from-home policies.

The industrial sector will not escape the current recession unscathed, but it will experience a quick recovery and an improved outlook in outer years.

The impact of COVID-19 has put additional pressure on the retail sector, which has faced challenges with competition from e-commerce and changing consumer preferences for years leading up to the current pandemic.

Multifamily fundamentals are projected to follow a similar shape as the U.S. economy over the next two years: a sharp downturn followed by a quick recovery.