To understand how relocations are influencing commercial development, we compared Q1 sales activity before the impact of the outbreak with the average of the remaining three quarters in 2020. We found that investors are following the migration patterns.

2020 has been an unprecedented year, with COVID-19 impacting nearly every industry across the country, including commercial real estate. Shutdowns due to the coronavirus pandemic caused a large portion of employees to work from home for much of the year. As the economy stalled, many businesses and property owners found themselves negotiating with both tenants and lenders on rent relief and loan modifications. While the pandemic accelerated trends that were already taking place in retail, it upended the strong momentum in the office and hospitality sectors as well as urban markets. These trends will likely continue in 2021 and reshape what buyers, owners, tenants, and residents may ultimately want to occupy.

The U.S. economy entered a recession in February 2020, per the National Bureau of Economic Research. Commercial real estate development typically slows during a recession because developers do not want to incur the holding costs of land parcels if there is not an expected demand for new product.

The main uncertainty in the student housing sector is COVID-19’s impact on the 2020-2021 school year’s leasing. There is a variety of factors which make the student housing occupancy outlook uncertain.