While global uncertainty and slower economic growth may dominate the markets, another near-record year is expected in the commercial real estate world. In fact, 2020 is predicted to be one of the strongest for commercial real estate investment on record. It’s estimated that up to $502 billion will be invested in commercial real estate in the United States next year.
What is the biggest reason for this continued growth? Demographic shifts in investment can drive growth in 2020. Millennials are expected to drive some of the boom in the suburbs, like Clay County. As the Millennial demographic continues to age (with many now in their 30’s), they are moving out of the major cities and into the suburbs. What’s different about Millennials from previous generations leaving the city, is they are desiring big city amenities in the suburbs as well. That means retail, outdoor spaces, restaurants and other activities are all in-demand in areas like Clay County.
While Millennials may dominate the headlines, Boomers are also expected to factor into 2020 commercial real estate plans. While may view the Boomers as an aging population, most are far from stepping into the retirement homes. In fact most Boomers won’t turn 80 until 2044. That means commercial real estate will continue to cater to Boomers as well.
Any area, like the Jacksonville metro that is experiencing a population boom will continue to see good investment opportunities in commercial real estate. While all the news revolves around Texas markets like Austin and Dallas/Fort Worth, Florida will be a major player in commercial development in 2020 and beyond. Orlando, Tampa, and Jacksonville are all showing no signs of slowing growth. Clay County and St Johns County are especially ideal for development due to the business-friendly nature of both areas.
New of staples like Sears closing tends to sour people on retail, but retail is expected to grow, albeit modestly in 2020. Again markets and development are always key. In areas like Clay County, retail investment makes sense. In depressed areas, not as much. Rental rates are expected to rise by over 5% in the industrial markets, however rental rates for offices are expected to grow by less than 2% in 2020. The best investment opportunities for multifamily homes in 2020 are (like retail) in the major growing metro areas.
2020 figures to be an interesting year for commercial real estate. The United States is experiencing one of the longest periods of growth in the nation’s history. And while the threat of recession appears on the news from time to time, as long as people continue to spend, invest and thrive, no slowdown can be anticipated.
For more commercial real estate news and information please like us on Facebook!