Peter Coyle's Bisnow Webinar Round Up: Twin Cities Multi-Family and Industrial Sectors Remain Strong
Last week I moderated an online forum in which three recognized experts in various segments of the real estate industry shared their respective crystal balls as we close out 2020 and look ahead to 2021. The panelists included Tim Elam, Managing Director, Scannell Properties, James Freytag, SVP, CBRE, and Gretchen Camp, Principal, ESG. Each panelist offered a unique perspective of the real estate economy creating a picture of the market that represents a dumbbell of sorts.
Anyone who thought the unrest in Minneapolis this summer would quell interest in new multi-family would be wrong. Numerous new multi-family projects are being proposed or under construction, both in Minneapolis and throughout the region. There was indeed a blip in the market brought about by COVID-19, but the market seems to have moved past it, trusting in the demographics and market forces driving this sector overall. I didn’t hear anyone mention a bubble. Thus one end of the dumbbell.
We’ve known that retail and office is in a slump, worsened by the pandemic. What was not expected is how COVID related restrictions have placed the hospitality industry in a hammer-lock. As companies and consumers increasingly push the online button to purchase all manner of goods, the pressure on bricks and mortar facilities will intensify. Companies whose employees can be productive from home are taking advantage of it. But you can’t run a hotel or restaurant if your employees are at home and your customers are fearful of coming to your location. Thus the middle of the dumbbell.
The other end of the dumbbell is industrial. The pressure to place large distribution facilities as close to customers as possible has intensified under COVID-19. Companies that specialize in developing industrial space on spec or as build to suits are rolling along. All the major retailing entities, whether Walmart or Amazon, are fueling the growth. This trend was underway before COVID became a thing and likely will continue even after COVID-19 is in our rearview mirror—it can’t be soon enough.
Tuesday’s election could impact the national economy on the margin, but my read of things after hearing from the panel last week is that the pandemic is the controlling factor for office, retail and hospitality. The industrial and multi-family sectors, however, seem poised to weather whatever storm lies ahead.
Click here to listen to the Bisnow Webinar: Twin Cities Deep Dive: State of the Market