Brokers and owners from CORFAC International’s member firms looked back on 2020 for the network’s first member outlook survey. The survey revealed that – after a year marked by the tumult of the pandemic, related economic downturn and political and social unrest – CORFAC brokers responded with resiliency and creativity. They shared how they adapted their business practices, identified new areas of opportunity and started off 2021 with measured optimism about the year ahead.
“Commercial real estate was profoundly and unsurprisingly impacted by the events of 2020, but CORFAC members found ways to change and grow their business, serving existing and new clients despite the turbulence,” said Joseph Latina, 2021 president of CORFAC International and principal of Patterson-Woods Commercial Properties/CORFAC International in Wilmington, Delaware. “Now we’re all focused on what’s ahead and seeing good cause for optimism.”
Booming industrial sector leads the way
Rocketing demand for industrial real estate has been a boost for CORFAC professionals heading into the new year. Nearly three-quarters of respondents said that the industrial and manufacturing sector was the biggest driver of business for their firms in the last six months of 2020. One survey respondent noted a “rapid increase in demand for high-bay warehouse space, particularly for ecommerce-related companies.” That fits the bigger picture for the industrial real estate market in the U.S., which experienced a record 90 million square feet of net occupancy growth in the last quarter of 2020.
Where are new business opportunities coming from? Members reported it’s a mix of current clients who are expanding (63 percent of respondents experienced this in the last six months of 2020) and current clients who are downsizing (51 percent), as well as new clients relocating to the market (51 percent).
How CORFAC firms pushed through the pandemic
Adaptability was the key for CORFAC firms in 2020 and will continue to drive business. About 70 percent of responding firms invested or implemented new technology platforms, such as 3D tours or drone photography, to address the challenges of the pandemic. Nearly 40 percent said they expanded services offered to clients, too. These new technologies are here to stay, even as in-person meetings and business travel are starting up again.
Looking ahead, when asked what factors they expect to have the greatest impact on their businesses in the next six months, the top answers were the general economy/recession (72 percent) and vaccine rollout (60 percent).
CORFAC members also brought up issues such as the return to the workplace, adaptive reuse of vacant or underused buildings, and lack of product in high-demand markets and categories as issues they are tracking – addressing them both as challenges and potential for new business. CORFAC brokers have been called on by clients who are re-evaluating their space needs or seeking investment properties in this opportunistic environment.
The potential ahead for CORFAC member firms
Although CORFAC members don’t yet believe the pandemic is fully in the rear view, many are seeing the road to deal-making clearing. Some CORFAC members have already seen deal volumes stabilize, but the vast majority expect it will be the third quarter (31 percent) or fourth quarter (31 percent) of 2021 when they do. As we emerge from a period like no other, CORFAC members are ready to connect through their unique network of independent firms to provide insights and help their clients seize the opportunities ahead.