The past year has been a whirlwind of change for many industries, including the world of commercial real estate. Here in the Upper Midwest, we've seen shifting needs in commercial real estate as dictated by pandemic mitigation efforts. As 2021 stretches out before us, industry experts are looking upon the commercial real estate sector with a mixture of anticipation and optimism. Even as we see consumer habits continue to shift and evolve, and businesses responding in kind, we see demand continuing to rise in certain segments of commercial real estate and new opportunities emerging to meet changing consumer behaviors. Here’s a closer look at what we're anticipating in our region for 2021.
Even in the dawn of 2021, we're already seeing cause for optimism for the coming year in the commercial real estate sector. Here are some of the influencing factors that will play a role in the coming year.
Industry experts anticipate that ecommerce demand will continue to be a driving factor in the growth of industrial investments. As the COVID-19 pandemic continues, and even as vaccinations begin for the general public, consumer behavior is likely to continue to skew toward ecommerce, and retail will persist in reinventing its sales models, continuing the shift that we saw in 2020. That means demand for industrial warehouse space will continue to rise as businesses pivot to an online sales model and changing distribution needs. For the Midwest, that trend could be even stronger due to the affordability of industrial space in our region, and the need for companies to forge supply chain and distribution solutions.
As vaccination against COVID-19 becomes widespread, industry leaders are expecting the Midwest workforce, which worked from home for much of 2020, will begin moving back to the office. So while commercial office space took a hit in 2020, as safer-at-home orders and shutdowns fade away, we expect demand for commercial real estate to pick up. And while some companies are looking at the feasibility of hybrid models for their workforces, the need for office space is real and enduring, and we are confident by the end of the year this sector will regain strength.
While the multifamily housing sector was viewed with some concern in 2020, industry forecasts call for a rise in multifamily housing demand in 2021. Experts are anticipating rising demand, low vacancy rates and modest rent growths across most asset classes. Strength in the suburban multifamily sector in the Midwest is anticipated to be particularly strong. We also expect improving market conditions and increased multifamily investment demand with continued low-interest rates in the coming year.
Investors know that having a knowledgeable expert on your side is key to optimizing potential returns in rapidly-changing environments. As our region rebounds from the challenges of 2020 and the COVID-19 pandemic, opportunities will emerge in the commercial real estate sector which those in the know will be able to leverage. Partnering with a trusted commercial real estate agent can mean the difference between making 2021 your year or missing out on emerging markets and trends. Contact us to learn more about how our commercial real estate agents can help you with your commercial real estate goals in the coming year.