The Fragmented Recovery: A Tale of Two Cities


Photo Courtesy of Monster Ztudio.

National Recovery is Just One Piece of the Story

• The move towards a full national reopening will bode well for the economy and commercial real estate

• But the pandemic has impacted every market differently, with some seeing rapid recoveries and others lagging


Fragmentation Occurring in Commercial Real Estate

• Nationwide, Apartment and Retail rents are down slightly, Office is down moderately, and Industrial rents rose

• However, Inland Empire and Sacramento Apartment rents rose 11% and 7%, while San Jose rents dropped 16%

• This bifurcation is found across all property types and metros, creating drastic variance in the local level


Investors Must Pay Attention to Local Nuances

• The situation can differ greatly from market to market, even within the same state

• Investors should understand national trends, but also be aware of the variance between individual markets

• Leveraging experts on particular property types and markets will be crucial for crafting an investment strategy



Sources: Marcus & Millichap Research Services, RealPage, Inc., CoStar Group, Inc.

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