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What Houston commercial real estate investors can expect from 2021

The global health crisis has emptied out office buildings across the nation. Millions of jobs have moved to remote or hybrid models, and many of these jobs might not return to an office building even after the health crisis is over.

This has taken a toll on the owners of office buildings, as well as on owners of buildings that lease space to restaurants, small shops and other businesses that have closed their doors. With all this in mind, investing in commercial real estate right now can seem like a daunting proposition. With the beginning of 2021 upon us, here’s what to expect.

Market recovery will depend on the industry

Some industries have been largely immune to the trend of moving jobs to the remote model. Some jobs simply cannot be done from home. Scientific labs, the automotive industry, hospitals and the like cannot function without the use of specialized equipment that is located only on the company’s premises. In short, some industries are less affected than others, and thus certain commercial real estate investments are wiser than others.

Houston, for example, has a sizeable tech industry. That will probably be one of the last industries to move back to needing office space since most tech workers can easily do their jobs from home.

But Houston is also home to a growing manufacturing industry. Factories, manufacturing facilities, chemical plans, warehouses and energy production facilities all need physical locations and might weather another extension of government shutdowns better than restaurants or office buildings would.

The trade, transportation and utility sector in Texas is growing at a 2.39% annual rate. This means that the need for transportation, warehousing and other facilities is likely to continue to increase throughout 2021.

No one should blindly throw their money behind an investment before investigating likely future trends in the economy. It is important to seek out opportunities in sectors where there is a lot of demand. It is just as important, before investing, to consider how well a certain industry would survive if the market conditions we have seen during this pandemic persist longer than expected.

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