The most successful real estate investors know that gut instinct alone is insufficient to identify opportunities. They base decisions on data and statistical analysis. But knowing what data to evaluate, and how, has become extremely challenging as the coronavirus pandemic continues to disrupt all commercial real estate (CRE) sectors. Some asset classes that investors considered safe in January, such as Manhattan office space and housing for college students, are now some of the most risky. 

7Park Data’s CRE Data Analyst Eugene Wu combed through 7Park’s myriad data sources, including income and payroll data, job posts, firmographics, labor data, permitting and construction data to uncover five asset classes that 7Park believes CRE investors should consider over the next 18 months. 

Highlights:

• Online grocery sales have posted triple-digit order growth since the onset of the pandemic in mid-March. Grocers will look to create facilities exclusively for delivery in addition to their in-store models. An entirely new CRE sector may emerge for online grocery delivery that eliminates pick-and-delivery from brick-and-mortar locations.
• Secondary cities, those with populations below 500,000 people, are drawing an increasing number of white-collar workers searching for a lower cost of living, smaller tax burden, job growth, and affordable housing. Cities with some of the most attractive rent to income ratios include Charlotte, NC, Jacksonville, FL and Austin, TX.
• Since the pandemic struck in mid-March, the hardest-hit markets from an economic perspective have been those with a concentration of services workers, such as Las Vegas and Honolulu. More resilient cities, with a lower concentration of services workers, include Raleigh, NC, Pittsburgh, PA and Milwuakee, WI.

To read about each of these CRE investment opportunities, visit Propmodo to view Eugene’s full article.