Five Trends in Commercial Real Estate: A Look at the Industry in 2022

By Natalie Jones / 08.02.22 / 3 min read

For the past few years, unprecedented times have significantly impacted the commercial real estate industry, creating economic uncertainties and changing the demand for commercial space. The effects continue to shape the industry’s road to recovery in 2022, yet findings from recent reports show adaptability and resilience across multiple sectors. Take a look below to learn about five trends in present-day commercial real estate.

Flexible Office Workplace
The traditional office workplace has changed since 2020 as remote work continues to foster productivity. Working in an office still has its benefits, so many employers are expected to implement a hybrid model for its employees. Due to remote work, less office space has been leased. The long-term effect of the changes in office demand is unclear.

Following the COVID-19 pandemic and subsequent rise in working remotely, many have waited for companies to share the number of days employees are expected to work in the office. For this reason, migration has not been significant. However, more employees are expected to relocate as companies push back the return to the office or provide the option of working remotely. If the popular hybrid work environments continue, employees may opt for a slightly longer commute and move to a less expensive market.

The Rise of Proptech
Since the onset of the COVID-19 pandemic, proptech, or property technology, has become an increasingly valuable way for property managers and tenants to make informed decisions. It can lead to cost savings if software generates data such as the required level of heating and cooling based on building occupancy. Touchless technologies will remain an important tool in creating a safe return to offices.

Booming Industrial Sector
Leasing activity, vacancy rates, rental rates, new construction, and net absorption have been heading in the right direction for industrial, making 2022 another strong year for this sector. Experts reported that 80 percent of first-generation industrial space built last year is no longer on the market, and the vacancy rate across the Unites States is at 3.2%. The rise of e-commerce since the COVID-19 pandemic started has triggered the demand for industrial space, leading to higher rental rates. However, occupiers have focused on leasing space in multiple locations to reduce transportation costs and maintain retail inventory.

Multifamily Growth
This sector is on track for another impressive year following growth in 2020 and 2021. A recent forecast indicates that 1.6 million households will be built in the United States in 2022. A diminished supply of single-family homes along with increasing mortgage rates are likely to positively impact multifamily in the coming months. Not to mention, the return of entertainment can drive renters to cities while remote work will steer renters toward finding pet-friendly places with offices.

To read our sources, click here:
Capitalizing on Real Estate’s Surprising Resilience: Three Key Trends to Watch in 2022
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