My usual quarterly market reports seem meaningless, at this time, because so much is changing and unknown. Therefore, I have decided to pass along some information regarding the latest happenings in real estate and business instead.
With recent events, real estate and business markets have become uncertain territories to venture into. As with most significant economic changes, there are areas of growth along with areas of decline. So, where should you look for opportunities to invest your most valued dollars? Let’s take a closer look at that question.
Markets on the Incline
We have seen large growth in the industrial market as manufacturing surges hit the nation. Amazon, alone, recently leased over 10 million square feet of warehouse space as it plans to bring on 100,000 workers to keep up with demand. Online purchasing during and after the pandemic could expand, creating more demand for industrial space.
Retail box stores / supermarket chains are also holding steady as consumers flock to the grocery stores to gather supplies and feed families who are now cooking from home rather than eating out at restaurants.
Another surprising enterprise is the growth of data centers. As a designated “essential business”, data center facilities are said to be operating at the peak of their capacity. The extra demand for cloud storage is likely to keep them busy as people continue to work from home.
Single tenant net lease investments are getting more attention these days, as well, since they carry less risk because national credit tenants will generally have a better ability to weather the storm, especially within the industrial and medical fields.
Declining Industries Amongst the Pandemic
As you probably already know, most regional malls have temporarily closed and, with that, so have most retail stores. With the need for social distancing, many consumers are finding what they need online thus ceasing the need for in-person retail shopping trips. This is, hopefully, a temporary set-back as many consumers enjoy the in-person feel of walking around a mall while shopping for that new outfit of pair of shoes.
As travel and vacation plans have been put on hold, so have the need for hotels and resorts. The hospitality industry has been one of the hardest hit amidst this economic change. Revenue per room has declined by approximately 81%. Do we expect the hospitality industry to come back in full stream? That’s hard to say at this time, but I would imagine that, as the country begins to move forward, consumers will, again, want and need to travel, whether it be for work or play.
While these uncertain times may have you guessing if it’s the right time to invest, there are still growths and positive happenings within the economy. We can’t say for certain where the market will go as the country begins to open but there will be opportunities for those who are willing to go after them. So keep your eyes open for future reports as we keep you informed of those opportunities.
What I Can Do to Help
Contact me with any questions you have or to discuss what you are seeing in the market, whether it be regarding the available government programs or for more information on what other investors may be doing. I’d love to help!