Real Estate

U.S. Real Estate Research Quarterly

November 2020 – 11 min read
Although the U.S. economy bounced back sharply in the third quarter, the near-term path for the economy and real estate markets remains highly dependent on progress toward a medical solution to COVID and the degree of further lockdowns. The Barings Real Estate team weighs in.


  • The U.S. economy bounced back strongly in Q3 from the unprecedented collapse in Q2 caused by the pandemic and containment measures designed to “flatten the curve.”
  • The V-shaped recovery will likely give way to a slower but still-positive growth trajectory that will feature elevated unemployment rates for the next couple of years. 
  • Despite Congress’ failure to agree on a new stimulus package, massive fiscal and monetary support is still working its way through the economy and financial markets globally.
  • Still, the near-term path for the economy and real estate markets is highly dependent on further progress toward a medical solution to COVID and the degree of any further lockdown restrictions. 
  • With Congress unable to agree on a new stimulus package and new COVID cases reaching all-time highs, the near-term risks remain tilted to the downside.

Property Markets

  • Property market fundamentals continue to deteriorate across most sectors and markets as tenant demand remains weak and the supply pipeline continues to deliver new product. 
  • Apartment occupancies have slipped and concessions have increased as new supply continues to come online, but the impact varies widely, with urban high-rise product hit hardest. 
  • Industrial property continues to outperform the other major sectors across all metrics, but new completions in Q3 outpaced absorption for a seventh consecutive quarter—a trend that will likely continue through 2022 at least. 
  • Office market fundamentals in Q3 continued to deteriorate at an accelerating pace. The more than 50 msf of negative net absorption over the past two quarters (per CBRE-EA) already exceeds the total recorded during the GFC, and sublease space has increased sharply. 
  • Retail rent collections are improving as many retail businesses remain open—some at limited capacity, such as restaurants, gyms and hair salons—and foot traffic slowly returns. 
  • The U.S. hotel market continues to struggle most from the travel restrictions and social distancing requirements meant to contain the COVID outbreak.

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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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