As we turn the page from the end of one year to the start of the next, it’s traditional to look back and reminisce on recent history and memorable events—especially when that new year corresponds with the start of a new decade.
Cushman and Wakefield’s Decade in Review report recaps the most notable events from the past ten years, and encompasses economic, innovation, and commercial real estate trends. Let’s take a walk down memory lane and reflect on how far the U.S. economy has come over the last decade…
It’s the year 2010, and the economy is slowly but surely crawling out of the Great Recession. The Dow Jones has risen to 10,000, while the U.S. unemployment rate remains at a whopping 9.8%. American investors, businesses, and individuals are hopeful that the worst of the economic downtown is behind them.
In July 2010, the first Uber ride takes place. This new technology will go on to become one of the biggest technology disruptors of the 2010s.
S&P downgrades its rating for U.S. long-term sovereign debt for the first time in history. This downgrade from stable to negative reflects S&P’s opinion that the plan developed by Congress and the Administration to address the U.S. debt-ceiling crisis of 2011 fell short of expectations.
Facebook (which was founded in 2004) surpasses 1 billion members worldwide. Today, there are approximately 2.5 billion global users.
In Colorado and Washington, recreational cannabis is legalized. This industry quickly becomes a major driver of retail and warehouse space in these markets.
The U.S. federal government shuts down for 16 days after failing to reach a budget agreement. This was the third-longest shutdown in U.S. history and the second-longest in the decade, with the longest being the 35-day shutdown in December 2018.
The job market finally recovers, and reaches new post-recession heights. Total payroll jobs in the U.S. soar to 140.4 million, up from 129.7 million in February 2010. Meanwhile, oil prices plummet to $53 per barrel by December 2014, after reaching $107 in June.
It’s a banner year for the office real estate sector, with net demand reaching 82.3 MSF—the highest level since 2006. Office vacancy declines to a post-recession low of 13.8%, and average asking rents sit at $27.81 psf full-service at year-end—an 11.3% increase from 2010.
The first Amazon Prime Day is held in 2015, spurring a new era of eCommerce sector growth. Prime members order an incredible 34.4 million items during the 24-hour event.
Average hourly wages for U.S. workers continue to rise, surpassing $15 per hour in 2016. The largest, tightest markets see averages of $20 per hour.
Over the past decade, more than 1.4 million transportation and warehousing jobs have been created, with 41% of those new jobs being warehouse.
The Tax Cut and Jobs Act (TCJA) significantly reduces tax rates for corporations. This legislation also incentivizes investments in low-income neighborhoods—known as Opportunity Zones—by providing tax advantages. The goal is to stimulate economic development and job creation.
The U.S. industrial sector reaches historic numbers in 2018. Net demand soars to 287.7 MSF, the highest level on record, while vacancy rates hit a historic low of 4.8%. Average asking rents are $6.36 psf NNN at year-end, representing a massive 29% increase from 2010.
Amid ongoing trade disputes and weak global growth, the U.S. economy slows down. In response, the Federal Open Market Committee votes to cut the interest rate three times. 2019 also marks the year when an autonomous truck successfully makes a 2,800+ mile trip from California to Pennsylvania.
Some of the key economic changes in 2019 compared to 2010 include:
- Unemployment rate: 9.8% in 2010 vs. 3.5% in 2019
- Tech employment: 6 million in 2010 vs. 7.5 million in 2019
- Industrial vacancy: 10.7% in 2010 vs. 4.8% in 2019
- Retail vacancy 9.9% in 2010 vs. 6.4% in 2019
- Office vacancy 17.2% in 2010 vs. 13% in 2019
Wrapping Up a Decade of Growth & Innovation
Looking back, it’s clear that much as changed over the span of the past ten years. This decade was a time of monumental tech investment, innovation, and job growth.
Today, ride-sharing apps, real-time delivery services, and automated assistant brands are household names. The co-working and flex-space market has grown tremendously, along with eCommerce.
These trends will no doubt continue to have an impact on the economy and the commercial real estate landscape in 2020 and beyond—and we look forward to facing these new changes and challenges head-on.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.