Category: Insights

What will happen to commercial real estate in 2022? It’s a trillion-dollar question, but the trends that seemed assured and certain just a few months ago are now in flux.

Now may be the ideal time to consider adaptive reuse to convert commercial property to residential or repurposed for a different commercial use.

The pandemic has brought a myriad of changes, much of which will have a permanent impression on commercial real estate (CRE). One of the most notable is the shift in consumer behavior and the impact on the environment around us.

Texas is the trifecta state, a place with warm weather, a zero-percent state income tax and inexpensive housing. But the “Lone Star State” is more than that: it’s also a major office hub centrally located in the U.S., with Dallas anchoring the Dallas-Fort Worth (DFW) metro area — where many of the Nation’s largest tech centers are located.

Industrial Real Estate is currently the best performing commercial real estate (CRE) asset type, touting 44 consecutive quarters of positive net absorption. That’s according to recent forecasts, research articles, reports, and other data and analysis presented over the past couple of months. This spotlights an intriguing success story amid a pandemic that crippled so many businesses and industries.

Millions of Americans move each year, but in the post-pandemic era something has changed: the workplace has evolved, and with change there are now new opportunities for both organizations and employees. One result is that people are in motion, moving from one metro area to another, often in search of a better work-life balance. In fact, Redfin reports that in the second quarter more than 30 percent of its website users searched in different metro areas.

Remember when cubicles were all the rage? Office tenant preferences have changed over the years. Today, tenant satisfaction has been redefined as a result of the COVID-19 pandemic and dramatic changes in the labor market.

Like most of the commercial real estate (CRE) market, office came under pressure in 2020. Responding to local shelter-in-place health orders, up to 70% of the U.S. workforce was working from home (WFH) in April 2020, transforming once-bustling office buildings into ghost towns. That percentage has decreased to 56% since the beginning of the year, signaling a recovery is underway. The extent of that recovery and what it means for office real estate is still unknown, but there is some speculation.