All major city apartment markets will benefit from the reopening of the economy and reduction in remote work, with rental demand also supported by record low numbers of homes for sale. New York City and D.C., which both saw large falls in asking rents in 2020, stand to benefit most from the return to normal. With less exposure to tech, most jobs in those cities will require workers to come into the office at least part of the time. We expect average total returns in both cities from 2021-25 will outperform the national average of 4.9%. At the opposite end of the spectrum, San Francisco will underperform as tech workers stay away. We expect it will be the only city to see falling capital values in each year from 2021-25, which will push total returns over that period down to around zero.
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