We won't soon forget 2020, though we indisputably would like to in many ways.
But the changes wrought by the pandemic year are far from over, and far from certain. The consequences will be big.
As we bid an unfond farewell to 2020, here are developments on the metro Detroit business scene to keep an eye on:
No other question matters as much for the future of the economy and the globe as how the vaccines against COVID-19 roll out. The unprecedented sprint to create them was the achievement of the year for 2020. Many experts expect that by mid-year enough people might have been inoculated to permit life to get back to something closer to normal, but much will depend on how smoothly the shots are rolled out. The big one? Whether enough people will be willing to get the shots.
As the vaccine begins to be offered to people, we'll still be left with great changes wrought by the virus. The year-plus spent trying to crimp the virus' spread has changed people's habits in uncountable ways that will stick for years. One with big consequences — for cities, for real estate, for the workforce — is how much office-based work comes back to the office? Many workers might be eager to return to their cubes, but many will not. Many executives want workers back together in person, but there are also great potential savings to be had by shrinking real estate footprints. How that affects business planning going forward will be one of the stories of 2021.
How the economy will bounce back from a year of disease and lockdowns remains to be seen. Industries that have been hit hardest by the COVID-19 response, including restaurants and movie theaters, face a tough future. Estimates of how many sit-down restaurants might shutter have gone as high as 50 percent. But the survivors that do make it through seem poised to benefit from the falloff in competition and the pent-up demand for a nice night out.
An uncertain "new normal" for office space and residential real estate demand brings new uncertainties for the Dan Gilbert-fueled real estate boom that has transformed downtown Detroit. Gilbert's massive project on the Hudson's site is starting to come out of the ground and should rise through 2021. But some other projects, including the massive Monroe Blocks plan, have been slower to fully materialize. The effect of a swiftly changing economy could make things difficult for developers betting on downtown, and could threaten the renaissance that has taken shape over the past decade.
The Motor City has become Mortgage City as far as Wall Street is concerned, with the IPO of Quicken Loans parent company Rocket Holdings Inc. It will be joined on the stock market by Pontiac-based United Wholesale Mortgage Inc. in a deal expected to close shortly after the beginning of 2021. For investors, the stock prices of the mortgage giants will be an object of close interest. So far, Rocket has gone from its $18-per-share IPO price to $19.63 in a historically hot mortgage business. The companies' challenge will be to keep growing even when mortgage rates rise.
Speaking of going public, 2021 will continue the speculation on if or when Southeast Michigan's other unicorns might go public. Detroit-based StockX and Rochester-based OneStream Software have both seen investment rounds that valued them at more than $1 billion. But it remains to be seen when they will take steps to unlock the value of those venture capital investments.
The past few years have seen some big deals on the local tech scene for venture-backed startups. Duo Security's $2 billion sale two years ago and Llamasoft's $1.4 billion sale in 2020 raise the question: Who's next? The market for software companies that are transforming their industries is still strong. OneStream, in Rochester, might be the top candidate.
The global reaction to the police killing of George Floyd brought about an urgent conversation on racial justice throughout corporate America. Nights of protests in Detroit and cities nationwide brought a group of metro Detroit's top business executives out to pledge to meet goals to further equity. Whether this promise leads to lasting change, and how strong the commitments are going forward, remains to be seen, but it seems this national conversation is far from over.
A rebellion by many doctors and donors over a big merger deal and the management of Beaumont Health by CEO John Fox dominated health care headlines in 2021. Now, the deal to merge with Illinois' Advocate Aurora has been called off, but suspicions remain. Some of a group of donors to Beaumont believe that the deal might be resurrected. That may be far-fetched, but the vast likelihood is that Beaumont and Fox are likely still on the lookout for a merger partner.
The future of the Detroit Medical Center will become clearer in 2021, as restrictions on its for-profit owner, Tenet Health, expire this year. The health system has been restricted in its ability to sell off any of the Detroit chain's five hospitals by the 2011 purchase agreement that converted them to for-profit status. Many have speculated that Tenet might want to sell pieces of the DMC, especially Children's Hospital, as it has done in other cities.
"Scene" - Google News
December 20, 2020 at 12:06PM
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10 things to watch in the metro Detroit business scene in 2021 - Crain's Detroit Business
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