Commercial Real Estate

The COVID-19 pandemic ignited widespread change in both the needs and demand surrounding commercial real estate, as businesses nationwide had employees work from home. Nearly two years later, many companies are still working primarily out of a remote setup, while others have returned to office buildings. Stemming from pandemic-related migration from cities to suburban or rural areas, there is more demand for office space in these areas. As of May 2021, just one of every 20 American office buildings had occupancy rates of more than 10 percent, according to Bloomberg.

One of the largest upcoming trends in the commercial real estate industry is the need for multi-purpose buildings. Moving forward, commercial real estate strategists will likely need to offer buildings that enable tenants to rent office space, retail stores, yoga studios, salons and any other type of businesses, in addition to residential living.

Professionals in the commercial real estate space are eyeing an increase in sustainability needs as continued climate change leads to harsher weather. Not only are investors and tenants looking for companies with strong sustainability metrics, but legal requirements are also increasing as well. Many states have implemented laws requiring commercial buildings to meet specific standards, for instance, operating via solar power.

In reality, demand is way up for commercial investment properties albeit with less supply. High-net-worth individuals are purchasing real estate to hedge against inflation and take advantage of the low-interest rates, and, given the low supply of residential properties, they’re turning to commercial properties instead.