When COVID-19 changed work and home life at the end of the first quarter 2020, commercial real estate sales and leasing activity slowed significantly due to the uncertainty. As the year progressed, market activity returned producing clear winners and losers - strength in the industrial, self-storage and net-leased markets, worries in hospitality, retail and office leasing markets. The pandemic exacerbated changes already taking place in the economy, such as e-commerce, ghost kitchens and millennial home buyers, which drove commercial real estate activity in 2020. Prices fell far less than after the 2008 financial crisis and are already rising again. Buyers/sellers and landlords/tenants are adjusting to the 'new normal' and transactions are closing - with some new concerns about the future.

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.