COVID-19 Vaccine Rollout Raises Optimism
2020 presented many struggles for brick-and-mortar-based businesses across the country. At the start of the COVID-19 pandemic a little over one year ago, when many businesses were required to close their doors to the public, we had little idea as to when our lives would return to a sense of normalcy.
The commercial real estate market across the country took a huge hit. And with the cost of rent, overdue loan payments, and a lack of cash flow, many businesses which could not transition their services into a digital platform were forced to close.
However, multi-service chains, which offer essential and inessential products and services alike, such as Target and Walmart were able to grow their capital while smaller stores struggled to stay afloat. ECommerce also shot up 44%, resulting in $ 861.12 billion worth of consumer spending.
Now with the vaccine rollout well underway, certain retail brokerage firms are already feeling optimistic about the future of the market. At the height of the pandemic, the majority of public-use buildings left open were reserved for essential services. Only now in 2021 are certain brokers seeing a growing return of leasing and sales activity for specialty stores, restaurants, and fitness centers. On the public side, retail companies such as Starbucks, Chase Bank, and 7-11 are planning major store openings and expansions across the country.
Other experts in the field are not so sure about a blue-sky future for commercial real estate. During a virtual panel at the Urban Land Institute in late 2020, Andrew Warren, the director of research for PwC Management Services told attendees that the COVID-19 pandemic did not change the real estate market as much as it accelerated already existing trends.
After over a year of many office employees proving that they can work productively and effectively from home, it will not be hard to imagine a significant number of businesses transitioning to a remote-only workplace to save on operating costs. Warren also believes that the prevalence of eCommerce will hold steady following mass vaccinations. And the recovery of traditional retail may be slow as residents continue to move out of city centers and into inner-ring suburban areas.
In 2021, the Mid-Atlantic market has seen major companies such as Amazon, BMW, and Wayfair invest in the area, leasing out space for warehouses and distribution centers. Steady, yearly population growth and a strong rent-to-income ratio have long made the Mid-Atlantic region a popular and attractive area for commercial real estate.
As more vaccines are distributed to the general public, experts will start to gain a greater sense of what the future holds for the commercial real estate market. Until then, the team at Liff, Walsh & Simmons will be keeping a close eye on any and all trends and developments in the Mid-Atlantic area, as well as across the country. If you have questions about a commercial real estate issue, or would like more information about our business law services and expertise, email Tom Simmons at Tsimmons@liffwalsh.com or call me direct at (443) 569-7270.
About Liff, Walsh & Simmons
Liff, Walsh & Simmons is a full-service business law firm serving the legal needs of small businesses and privately held companies, their owners and operators, and individuals throughout their business and family life cycles. From helping entrepreneurs bring their business visions to market, to representing middle-market companies in business transactions and disputes, we take pride in providing value-driven solutions and great results. Our responsive service is focused on general and transactional business advice, commercial and civil litigation, commercial real estate, land use, finance, and estate planning and administration.