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A (Slow) Return to Normal?

May 03, 2021

There is no denying that the past 13 months have been challenging for everyone.  However, more Georgians (and Americans in general) are becoming vaccinated against the COVID-19 virus, and we may be finally starting to see a light at the end of this long tunnel.  

According to the Centers for Disease Control, 31.6% of the total US population is now fully vaccinated.  As we continue to average around 3 million administered doses per day, we are starting to see things look like they are beginning to go back to ‘normal.’  This will of course be a slightly different normal than before, and we should not expect otherwise.  There will be changes brought about by the last year that will affect our behavior for many years to come.

In terms of our professional lives, the work-life equation has shifted significantly towards a more balanced approach.  This has been influenced most by the more limited need for daily commuting, thereby freeing up more personal time with friends and family, and we would expect most professional positions to allow for more remote work going forward (apologies to our surgeon friends who are reading this).  This will inevitably lead to shifts in the future demand for corporate office space needs, causing potential issues and opportunities to arise in this investment sector.  However, recent trends suggest that more companies are locking in longer-term leases now versus 18 months ago, with the caveat that they are leasing slightly less space (10%) overall.  This would suggest that even corporate boardrooms expect a more relaxed in-office policy going forward. 

Economic evidence is also beginning to show that a recovery is in the works.  The March consumer spending report showed a 4.2% increase for the month and, while it must be taken with a grain of salt given the low starting position and impact of stimulus checks, US household income saw its largest ever monthly increase at 21.1%.  Finally, US wage growth saw its largest quarterly uptick in 14 years.  While a growing wage base may seem negative to investment gains at first sight, it should help boost spending and give long term strength to the recovery. 

The non-economic recovery that we are seeing is also noteworthy.  As it is now spring here in Atlanta, it is nice to see people out on the street or going for a stroll in the park.  Reservations at restaurants are becoming a little bit harder to make, and even the movie theaters are starting to open back up (though it may still be a while before we get the next $1b blockbuster).  Sports and music venues, two businesses that were disproportionally hurt, are starting to regain their footing.  I had the pleasure of attending an Atlanta United match in-person the other day, and while it was a surreal experience being around so many others for the first time in so long, I must say that I cannot wait to do it again very soon. 

Carey Blakley