Analysis: Big Government Spending Creates Opportunities, Worries for CRE
Yardi Matrix Research Director Paul Fiorilla and leading economists look inside the recent and forthcoming “go-big” packages.
March 29, 2021 | Paul Fiorilla | Commercial Property Executive
The U.S. federal government has passed an unprecedented $5.3 trillion of stimulus as part of the effort to recover from the COVID-19 pandemic, and trillions more of infrastructure spending appears to be on the way. The expected boost to the economy should create a smooth highway for commercial real estate, but will there be a toll at the end?
The “go-big” spending packages are expected to help produce a rapid recovery, with GDP forecast to grow by 6.5 percent in 2021 and 4.0 percent in 2022, according to the Organization for Economic Cooperation and Development. If those projections come to pass, it would mark the strongest recovery since the economy grew by 4.6 percent in 1983 and 7.2 percent in 1984 following a recession in 1982.
“It’s going to be a big jolt for the markets,” said Andrew Nelson of Nelson Economists, the former chief economist for Colliers International. “There are big upside implications for the country and property markets.”
