Many assume that the pandemic left the commercial real estate market dead in the water. It prompted employees to work remotely and businesses to shut down or struggle during the economic downturn. Those early days of the pandemic are long gone, with people now returning to work or finding new work. Amid the uncertainty, 2021 turned out to be a pretty good year for commercial real estate, and economists predict an even better 2022.
Reasons to be hopeful
Forbes magazine cited several trends that are cause for optimism:
- The commercial market went up: The volume of commercial real estate transactions rose 64% in 2021, which led to a still robust 12% increase over the pre-pandemic numbers of 2019. Apartment and industrial space prices are rising at double-digit percentage rates as we enter 2022.
- Digital companies expand: The rise of remote work and e-commerce were boom times for tech companies, but they still need brick and mortar spaces to house data centers, hardware, communication towers, customer service, and other resources that do not live online.
- The economy: Inflation is a concern in early 2022, but this will ease as the year goes on. Supply chain bottlenecks should go away for retailers as well. Economists predict that long-term interest rates will remain low, which is good for financing purchases.
- Back to work: Companies and even government agencies are going back to the office, even if it is in a hybrid format.
- Brick and mortar retail: Shopping online is convenient, but there are certain benefits to buying goods like clothes in person. In-store shopping numbers now exceed pre-pandemic levels, and higher numbers mean more retailers.
- The virus fades: There will be occasional flare-ups and setbacks like Omicron, but health experts mostly agree that the virus will be less dangerous with less powerful surges as time passes.
A business opportunity
The commercial real estate market offers opportunities for the bold, but it is still essential to work with an attorney when conducting business. Their expertise can help resolve disputes, structure deals and protect clients from business mistakes that could haunt them for years.