For the businesses lucky to survive 2020, there is reason for optimism heading into the new year. While turning the page to January 2021 won’t magically fix the economic burdens from the COVID-19 pandemic, it will offer some hope for light at the end of the tunnel, particularly for the commercial real estate industry.
Economic experts predict some pain still to come for the commercial realty industry, however those lucky enough to push forward should see lofty rebounds later in 2021. That, of course, will likely depend on the industry served. For healthcare, the infrastructure needed to deal with the pandemic, and nationwide roll-out of the vaccine will lead to more demand of space. Operating costs in health care are expected to increase by over $19 per square feet in 2021. On the flip side, retail has been punished more than any other industry due to the pandemic, and the rebound won’t come without a cost.
More retail businesses closed in 2020 than during all of the Great Recession. While many are expecting the economy to go back to it’s unprecedented growth after the pandemic ends, questions remain about what that means for retail. Will some of the small business owners who closed decide to start over? Will larger retail companies take advantage of the lower prices and gobble up storefronts? Will those storefronts instead remain vacant? Summer 2020 has shown us shoppers are willing to leave their couches and return to stores to help support what business will be left, so it good be a good opportunity for retail to rebound. However most experts believe vacant retail stores will be repurposed for heath care, grocery, and other alternative industries. Retail, meanwhile, is going to focus its energy on e-commerce.
E-commerce does have some positive impact for commercial real estate. Warehouses will begin to grow, as Amazon and others look to expand their storage. Amazon alone already has multiple facilities in the Jacksonville metro.
Speaking of Jacksonville, what about our metro, and Florida as a whole? Our state has seen fewer limitations due to the pandemic compared with other similar sized populations. However the impact on tourism has hurt the state as a whole, with more people choosing to stay home. In Jacksonville, tech continues to invest in the area, which is good for commercial real estate. Population numbers in Jacksonville are still estimated to rise, and land is still very much in demand. As the vaccine rolls out and the pandemic winds down by (hopefully) summer 2021, it’s widely believed that Jacksonville will continue to be a strong economic leader in the state, and country.
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