PARK CITY, UT—During a morning session on Friday at the GlobeSt. ELITE Women of Influence 2021 conference here in Park City, CA, keynote Rebecca Rockey, economist and global head of forecasting at Cushman & Wakefield, discussed some of the mega trends that define her CRE outlook. They are cyclical forces, technology, structural trends, and global issues.
The cyclical forces she pointed to include fiscal and monetary policy, economic reopening and pent up demand. On the technology front, she pointed to loT and 5G, automation, robotics and AI, as well as smart buildings. On the structural trend side, shifting dynamics include demographics, distributed workforce and internet economy. And lastly, on the global issue front, she pointed to climate change, trade and foreign policy.
Overall, she says, with all of these trends, "we don't know what we don't know. You have to be nimble, be ready and be ready to adapt." She added that "We cannot solve everything alone when it comes to global issues. Climate change is one of the most important questions on the investor side of our business."
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In looking at the economy, she pointed out that confidence is rebounding, pent-up spending is coming, high frequency data is accelerating and real GDP is expected to recover this year. "People want to get out and they intend to," she said, noting that restaurants are in high demand, the vacation is making a comeback and airport traffic is rising. "There is currently $2.6 trillion of excess savings sitting on the 'economic sidelines.' Expect around $800 billion to $1 trillion to be spent over the coming years."
Rockey also discussed the residential sector and noted that there is plenty of demand to go around. "Virtually all major cities will record household formation in excess of changes to housing stock," she said. She added that multifamily really held up and is expected to remain robust thanks to strong national fundamentals.
One CRE sector that is less certain is the urban core and CBDs. Rockey said that while these have a longer path to recovery, they will ultimately come back. Indeed, the office sector is the only main property type still experiencing a correction. "Vacancy is expected to peak in mid-2022 at a new record of 19.4%."
As for the hotel market, she says that recovery is underway, noting that improvements in the consumer and tourism backdrop will help occupancy rates recover, with the consensus expecting RevPAR to be 65-70% above 2020 levels by 2022.
For industrial—an asset class that was barely affected by the pandemic—she said that from 2012-2025, she forecasts industrial demand to be 1.5 billion square feet, buttressed by e-commerce and a retooling of supply chains.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
