Like every industry, the commercial real estate market is one that did suffer a bit during the coronavirus pandemic.
It has been a rough few years, but it is safe to say that the industry has bounced back pretty successfully, and the result is that more and more people are starting to look into commercial real estate once more, especially in the US.
Let’s examine some of the different commercial real estate trends that you might want to keep an eye on.
Multifamily Market Recovery
Both the retail and multifamily markets have mostly recovered from the off-days of the pandemic. It’s estimated that in Q3 of 2021, the vacancies for multifamily properties reached 4.7%.
This does mean that the industry is back to doing well, which is good news for anyone who wants to be able to start investing in this industry again.
The Impact of E-Commerce
A lot of people assume that e-commerce blew up during the pandemic, and while it did see growth, it wasn’t true to the level that everybody thought.
The majority of people still want to do things like eating out at restaurants or going to physical stores and buying things.
There’s still a healthy demand for these things, which can ultimately benefit the commercial real estate industry in a big way.
Coastal Recovery
There has been a significant recovery of the commercial real estate industry in coastal areas. In 2021, a lot of people chose to relocate to these places. It’s estimated that most coastal areas returned to their pre-pandemic level of vacancy by Q3 of 2021.
It is worth noting that lodging, which is dependent on the tourism industry or on-site workers, is an area which is recovering at a slower clip. These industries may take longer to get back to normal.
The Rise of Hybrid Working
Nobody can deny the impact that hybrid work has had on the world. As we move into an uncertain future, more businesses are beginning to accept hybrid work as being normal.
However, there are still a fair amount of people who are going to be working in normal offices.
There is a demand for the property because corporations need high-quality buildings that they can use to house staff and work with clients.
A Better Standard of Rental Unit
There is now a higher demand for larger, better quality rental units. This is because the cost of a single-family home is getting much higher, and this means, for example, that a lot of people are trying to make the transition from a one-bedroom property to a two-bedroom property to make sure that they have a home office available.
Better Housing For Middle-Class Workers
The middle class is typically the bulk of the workforce in the US, but there aren’t enough housing units to go around. A lot of middle-class workers are struggling to secure meaningful accommodation.
This means that there is potential for businesses and people to start investing in projects that will generate more homes like this.
Final Thoughts
Commercial real estate is something that we have had to be patient with for a few years. It took a beating during the COVID-19 pandemic because a lot of businesses and people no longer had secure housing.
However, now that the industry is back on its feet a little bit, this is a good opportunity to watch the 2022 trends unfold. Some people are already beginning to look to 2023, just to see how the industry will be different then and what trends will develop as a result.
