Reading the Signposts on the Road to Economic Recovery
“You don’t need a weatherman/To know which way the wind blows,” Bob Dylan famously sang in the 1960s. While that may be the case, it helps to have knowledge of how to interpret wind direction and other meteorological indicators.
In that spirit, Cushman & Wakefield’s Kevin Thorpe and Jennifer Edwards produced an interactive infographic on nine signs that would indicate recovery in real estate globally, and what to watch for as this year progresses.
Steadily improving global economies. Watch for: “global GDP growth to remain subpar into early 2021, but potentially accelerate in the second half of the year.
Return to office. Watch for: “balancing remote and office work. There may be a ‘Goldilocks’ relationship where both too little and too much remote work are sub-optimal.”
Investors moving from the sidelines. Watch for: “a return closer to pre-COVID-19 normalcy to ignite pent-up demand. Renewals will retreat closer to the historic average of 19% of total leasing as businesses actively search for space and shift from renewals and extensions to executing new leases.”
More mobility. Watch for: “an increase in passenger ridership, indicating heightened confidence in public transportation. That should in turn help support cities across the world transition to a recovery phase.”
Developers regain confidence. Watch for: “lenders to grow more confident in the market and fund more commercial projects.”
Office leasing inflection points. Watch for: “clarity on whether Greater China represents a leading indicator or remains an anomaly. The global office sector is expected to start absorbing space in early 2022 and vacancy is expected to trend down from that point forward. Asia Pacific should continue to see improved demand for office space in 2021, leading the West but lagging Greater China.”
Pent-up consumer demand unleashed. Watch for: surging sales at stores and venues that consumers were not able to patronize during the pandemic. Think restaurants, movie theaters, shows, sporting events and travel destinations.
Dispersed industrial demand. Watch for: “a bounce-back in leasing of manufacturing space and stronger demand for flex product, particularly high technology and R&D space in 2021.”
Return to travel. Watch for: “an uptick in business, domestic and international airport passenger traffic, coupled with a rise in hotel occupancy, as travelers increasingly become less wary of exposure globally.”
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
- ◦Financing
- ◦Sale/Acquisition
- ◦Lease
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