As the United States struggles to emerge from the COVID19 pandemic and return to business as usual, commercial real estate has changed compared to pre-pandemic status. However, what are the real estate experts predicting for the remainder of 2021?

Multifamily Commercial Real Estate Remains Strong in 2021

The multifamily market is healthy and burgeoning despite the problems of 2020. Currently, the demand for multifamily commercial real estate is red hot and growing. Many people are leaving the coastal regions and moving further into the state to avoid the high rent price switch that makes the demand for multifamily complexes big. 

Many families are seeking lower living costs and moving into apartments and out of larger residences. Undoubtedly, this is only going to fuel the rental market demand. Workforce housing remains in short supply. Usually, when there is some economic uncertainty, people start to downsize and look for more affordable housing choices such as apartment living. 

Multifamily commercial properties will remain in demand throughout the remainder of 2021 and will probably only increase in momentum as investors look for the opportunities to snag up apartments and multi housing units. 

Industrial Remains on Top Throughout 2021

If 2020 spurred anything it was the insatiable need to shop online for many people. The eCommerce marketplace is booming and so is the demand for industrial space as companies scramble to find large warehouses to meet their needs. 

There has never been an abundance or excess of industrial space available so what comes up for sale is quickly snatched up for premium dollars by businesses and investors. 

In California, the industrial demands are souring to truly unimagined heights and are only going to increase. The twin Ports of Los Angeles and Long beach have reported record breaking industry real estate numbers as logistics and e-commerce fuel the craze. FedEx, Furniture of America., and Polar Air Cargo have snagged industrial warehouses throughout the state to grow their businesses. 

Commercial Properties in Long Beach and Los Angeles 

Currently, the ports of Long Beach and Los Angeles account for around 40 percent of all inbound containers in the country which is also fueling the industrial commercial market. The Inland Empire and Los Angeles have had record-breaking first quarters this year with astronomical asking rents. The demand is not forecast to slow down any time soon. The average prices per square foot in the demand areas went from $138 in 2016 to $197 in 2021 per square foot. The Inland Empire experienced an increase from $80 to $127. 

The industrial vacancy rate in the greater L.A. area has dropped to a historic 1.8 percent. Developers are rushing to meet the demand. Midway through the year, there are nearly 27 million square feet in the region under construction and the demand is still high. 

As more containers flood into the country, the availability of warehouse space plummets and the demand grows. Without enough warehouse space, there will be a supply shortage, so everyone is scrambling to meet the demands. Rental prices are skyrocketing for industrial real estate and as soon as commercial property hits the market for sale it is snagged up.

Is there an end in sight to the demand?  The answer is ‘no’. The demand will continue all the way through 2021 and beyond. 

If you are interested in commercial real estate in the California area, please contact the professionals at RE/MAX Top Producers Commercial – a full-service California brokerage for more information.

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