2021 Planning & Predictions

It is the start of a New Year, 2021, and at this time of year, we always like to look forward, do some planning and make some predictions.

Our predictions for 2021…..

1. 10 year US Treasury Note ends the year above 2%.  This is a direct market reaction to the strong economy due to substantial fiscal stimulus and subsequent inflation. These triggers will lead to the expectation for longer term growth and thus a higher cost of capital.

2. A substantial amount of the redevelopment of commercial assets.  Everything from movie theaters, to shopping malls, to motels and hotels are on the list for revitalization, adaptive reuse, and just scraping the site and building new ground-up product.  Pugh Management is planning a webinar on this topic in the near future.  Keep an eye out for an invitation.

3. Multifamily and industrial/distribution will continue to be strong investments.  Though we believe being highly selective in multifamily development is key to managing risk in this environment. The continued rise of online retailing and on-demand, at home shopping will further drive investments in distribution hubs and last mile centers for Amazon, Walmart, Jet.com, and others.

4. Proptech adaptation in property management, construction and development management will continue to surge.  Due to a fairly low level of adaptation this trend of continuing investment will continue for years into the future.

5. Movement to the suburbs will continue as the Millennial generation comes of family formation age and the smaller Gen Z begins backfilling urban apartment complexes.  This trend clearly has implications for Build to Rent development and the Work From Anywhere trend. 

Those are some of the predictions we have for 2021.  What do you think?  Are we missing anything?  We’d love to hear your thoughts in the comments section below.

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