Typically when the economy emerges from a recession, construction accelerates. But this time, "it really is different," says Marcus & Millichap's John Chang in a recent investor outlook video.

As we entered the pandemic last year, three property types were enjoying a wave of record development: apartments, industrial, and self-storage. And all of those sustained strong demand throughout COVID. Apartment and industrial vacancy rates are up just 10 basis points compared to last year, while self-storage vacancy rates are down 310 basis points—a record low of 7%.

But "even though the demand drivers for almost all commercial real estate are prime to rapidly rise, construction will likely be curtailed by extreme building material price increases," Chang says. Materials prices have skyrocketed this year, with lumber up by 90%, steel and copper up 50, and overall materials up 17.2% over the norm.