Outlook for Commercial Real Estate
Between a pandemic, inflation, rising interest rates, and a transition to work-from-home, it’s safe to say that the current commercial real estate market is facing unprecedented times. The good news is that despite everything, commercial real estate has seen success in 2022 and the overall outlook looks positive - especially in a few areas.
Shopping centers in highly populated residential areas are doing well as retail evolves. Casual restaurants, salons, gyms and grocery stores continue to contribute to a strong performance, but tenants outside of traditional retail categories - like walk-in testing clinics and medical providers - are beginning to fill more shopping centers.
Due to increasing mortgage rates and rising prices in the single-family home market, people are choosing to rent over owning. The national housing shortage, measuring anywhere from 2 million to 5 million units, also increases demand for multifamily housing. Add to that a rising need for workforce housing, and you’ll see that multifamily housing continues to be a good investment.
The industrial sector continues to be one of the most successful when it comes to commercial real estate. To avoid pandemic-level supply issues, companies are taking on larger inventory spaces. And, as promised delivery dates continue to require a quick order-to-doorstep timeline, industrial properties located closer to the end consumer will grow.
As office space declines in the face of increasing remote work, companies may also opt to add more lifestyle-type spaces, such as gyms and cafeterias, to their industrial facilities.
During our most recent project, we transformed an industrial space into a Planet Fitness gym. Our expertise in pre-construction, construction management, design-build, and renovation services helped to bring this project to life while adhering to the client’s timeline and specifications