Let’s talk trends, Cola. (No, not middle parts and skinny jeans.)
As we begin to look forward to a post-COVID existence, we asked the pros at Trinity Partners to tell us what the commercial real estate landscape of Columbia will look like in 2021. Here’s what they had to say:
○ It’s expected that as the vaccine rollout continues, office activity will pick up. However, some larger corporate tenants are putting their spaces up for sublease or trying to negotiate early buyouts with landlords.
○ Regional firms with local leadership tended to return to the office first in 2020. Many national tenants continue to work from home + are expected to do so through mid-2021.
○ For those returning to the office in 2021, there will likely be new protocols in place to ensure a safe working environment, like staggered employee schedules, new sanitation and protective screenings similar to what some public schools have implemented, “employee experience” initiatives + more.
○ Costs for tenant upfits (read: design modifications) have risen during the pandemic due to increased material costs and competition for skilled labor. If this trend holds, landlords will have a tough time offering incentives to tenants on deals requiring significant renovation.
○ Trinity Partners predicts the work from home model will not have as large a sustaining impact beyond 2021, particularly for firms who are seeing a loss of productivity and collaboration. 👀
○ Good news: Retail leasing activity is picking back up after a slow Q2, Q3, and Q4 of 2020.
○ Many retailers are requiring lease protection from future pandemics, shutdowns, etc.
○ A bittersweet reality: There will likely be a rise in available locations as a result of retail and restaurant closures.
○ Trinity Partners predicts dental, imaging, urgent care + primary care offices may begin to backfill some of the retail vacancies created during COVID.
○ Space is in short supply, so tenants are renewing at existing spaces, landlords are providing less concessions, and rents are trending upwards.
○ Ecommerce is rapidly growing. Expect to see extremely strong activity with big box industrial spaces being driven by bulk distribution + online shopping.
○ We may also see more speculative development (read: land development or construction without a definite finished product) given the tightness of the market. Currently, there are 7 projects proposed or under construction ranging in size from 125,000-500,000 square-feet.
○ SC counties have been in land acquisition mode. These pieces of land have been earmarked for large manufacturing projects, promoting job creation.