Real Estate

Spring Is Here

May 2021 – 11 min read
With vaccinations making steady progress, the near-term outlook for the U.S. economy is as bright as it’s been in three decades. However, risks remain—and the recovery will be uneven across and within markets and sectors. The Barings Real Estate team weighs in.


  • With the vaccination campaign making steady progress, we believe the near-term outlook for the U.S. economy is as bright as it’s been in three decades.
  • Hiring and spending both rebounded in March amid easing restrictions on activity and travel—and as the fiscal stimulus approved in December made its way into the economy.
  • With additional fiscal support signed into law in March and ongoing massive monetary stimulus, job growth and consumption are poised to accelerate over the coming months.
  • COVID remains a risk, however, and U.S. bond yields have increased meaningfully since the year began, partly due to growing concerns about inflation.

Property Markets

  • As expected, the winter surge in COVID cases and restrictions on mobility contributed to a steep fall in transaction volume in Q1 after a flurry of activity to close out 2020.
  • The apartment market continues to struggle to digest a steady flow of new supply, but apartment fundamentals should improve in the second half of this year, especially in denser urban markets that are currently out of favor, in our view.
  • The industrial sector continued on its torrid pace in Q1 fueled by strong demand from occupiers and investors, along with abundant and cheap financing.
  • Office market fundamentals continued to deteriorate at an alarming pace in Q1, but we believe demand should stabilize in the second half of 2021, setting the stage for a pickup in leasing activity in 2022, and perhaps sooner in some markets.
  • Neighborhood and community centers exhibited some resilience in the first quarter with the availability rate declining quarter-over-quarter for the first time since Q4 2019.
  • With consumer sentiment rebounding from the lows recorded over the winter, and many households sitting on excess savings accumulated during the pandemic, we think hotel room demand should see a nice pent-up demand-driven bounce over the summer months.

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Abigail Rosenbaum


TJ Parker, CFA

Managing Director

Ryan LaRue


Ryan Ma, CFA

Managing Director, Barings Real Estate

Philip Conner

Head of U.S. Real Estate Research & Strategy

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