Real Estate

Recovery Gathers Further Momentum

November 2021 – 10 min read
The U.S. property market recovery continues unabated in the current economic climate. The Barings Real Estate team weighs in.


  • The U.S. economy rebounded rapidly in the first half of the year with more than 6% annualized growth, led by consumer spending and business investment.
  • Strong job growth projections and pent-up savings should support growth over the near term. Meanwhile, monetary policy remains accommodative with the Fed committed to keeping short-term rates low through 2022.
  • The Delta variant remains a potential headwind to this optimistic growth outlook, and could slow or delay the return to a post-COVID normal.
  • While upside risks in the form of pent-up savings and policy changes have the potential to boost productivity and growth, additional downside risks remain in the form of higher energy prices and supply chain issues that could pose headwinds to the growth picture.

Property Markets

  • The U.S. property market recovery continues unabated in the current economic climate. 
  • Occupier demand is strengthening and fundamentals are improving across all major property types, including office and retail. This optimism is flowing through into capital markets, which reported a record level of aggregate deal volume in September.
  • The bifurcation in price recovery between in-favor and out-of-favor sectors continues, but the spread differential is narrowing—led by a recovery in select sub-sectors such as suburban office and necessity-driven retail.
  • Public REIT markets have staged a complete recovery in pricing and seem poised for further growth.
  • Core property performance, as measured by the NCREIF Property Index (NPI), is on an upward trajectory, and returns (both appreciation and income) are once again in positive territory across property sectors, lending support to the broad-based recovery in commercial real estate (CRE).

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Ryan LaRue


Philip Conner

Head of U.S. Real Estate Research & Strategy

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