To help you navigate the ever-changing world of commercial real estate, Price Commercial Management is here to share the latest Commercial Real Estate trends in 2022.
The pandemic was a curve ball for the commercial real estate industry. With so much uncertainty about what was to come, it was difficult to predict how and where to invest money into commercial real estate. Now that we’re through the brunt of it, we’re able to make more sound commercial real estate decisions based on the trends we’ve seen. Let’s take a look at what’s up ahead:
Types of Properties to Invest in for 2022
Nearly every segment in the commercial real estate space has demonstrated recovery from the initial shock of the pandemic. Some sectors are rebounding more than others. As we head into 2022, here are types of commercial properties you may want to add to your portfolio.
The industrial sector has one of the most promising outlooks in the new year. With e-commerce surging during the pandemic when customers couldn’t visit stores in person, online sales saw a major increase. As a result, manufacturers were faced with large orders that needed to be fulfilled. Through this surge, there was (and continues to be) high demand for warehouse space for distribution facilities. Investing in industrial real estate allows you to cater to the growing distribution centers. Many of whom are in need of additional square footage not only to meet the current demand but who are stockpiling additional inventory. As many companies are preparing in case a global shutdown happens again.
At the height of the pandemic, many individuals moved home to save money on rent. There was no need to stay in a 700 sq ft apartment when their parents had an entire house for them to spread out in! But now that things are heading back in the right direction, many individuals are looking to sign a lease for their own place. Because of this, multifamily commercial properties (such as apartment complexes) are on the rise and a great investment opportunity. As these young renters return to their respective cities, they’ll be looking to lock in a lease. Investing in a multifamily complex allows you to reap the benefits of residential real estate but at the commercial real estate level.
The beginning of the pandemic was particularly tough for brick-and-mortar retail stores that were forced to close their doors. This caused a shift to online shopping (hence the boom in industrial commercial real estate!) but is returning to healthier levels now that customers feel comfortable shopping in public again. Because so many stores shut their doors, or worse, closed for good, many brands are going to be looking to expand their brick-and-mortar locations again now that everything is on the up and up.
From a landlord perspective, investing in retail space such as a strip mall or downtown space allows you to lock in stable anchor tenants and mix in a variety of individual smaller stores looking to make their footprint. However, investing in retail isn’t as sure of a shot as industrial or multifamily, as it did take one of the biggest hits during the pandemic and will take a bit more time to fully bounce back.
For many commercial real estate investors, office space is the bread and butter of what you do. Although many individuals prefer working in an office, there’s still a large handful of individuals who enjoy a new work-from-home lifestyle. This has left many companies struggling to determine what they’re going to do when their existing leases are up. We’ve seen a lot of changes to the workplace over the past year, and with continued uncertainty around COVID-19, most companies aren’t ready to make the call on expanding or decreasing their square footage — or if they’re going to completely shift to having their employees work from home permanently. For this reason, the popularity of corporate-style coworking spaces is on the rise, and it may be an opportunity for you to seize if you have vacancies.
Effects the Post-Pandemic Era Will Have on Commercial Real Estate in 2022
Even with the global pandemic still going on, the commercial real estate world is showing positive signs of recovery across a variety of sectors. While multifamily, industrial, retail, data centers, and self-storage appear to be the most profitable ventures for commercial real estate investors, you also need to be mindful of internal changes that can provide you with ample returns.
Along with determining what investments you’ll make on commercial properties in 2022, you also need to spend time considering the effects the post-pandemic era will have on commercial real estate.
One major change to commercial real estate in a post-pandemic world is lease negotiations. Pre-pandemic, commercial real estate prided itself on its long-term leases. But the uncertainty of the pandemic is going to have renters lean into flexibility that can change due to the changing needs of their business. No commercial lease is a one-size-fits-all deal, and following the pandemic, that’s truer than ever. Some renters will be looking for short-term leases until there is more clarity around how their industry is going to fend post-pandemic. Gone are the days where landlords will be able to lock in lengthy leases, especially when their competitors are offering more flexible deals.
A major pain point at the start of the pandemic was the lack of communication between landlords and their tenants. When COVID-19 hit, many landlords didn’t have an effective system or process in place to communicate important updates with tenants — leaving tenants with many questions and concerns. Having a clear and consistent way to communicate internally is absolutely crucial in a post-pandemic world. With so much uncertainty and changes occurring frequently, the landlord must be able to get in touch with the tenants to share important updates, changes to COVID-19 protocols, and more.
How a Property Manager Can Help You Navigate the Commercial Real Estate Trends in 2022
Having a commercial property manager by your side who can guide you through the ever-evolving commercial real estate landscape. A Price Commercial Management property manager has their finger on the pulse of the latest trends and is ready to respond to any potential effects they may have on your property investment. They will work to protect your investment, keep your tenants satisfied, and ensure that your properties continue to be a source of future income.
Price Commercial Management crafts customizable property management plans based on client needs, including:
- Rent Collection
- Lease Enforcement
- Monthly Property Reporting
- Expense Management
- Revenue Enrichment
- Property Assessments Scheduling
- Routine and Preventative Maintenance
- Relationships with Licensed and Insured Contractors
- Aesthetic Maintenance
Free yourself from the hassle and burden of managing your own property. Let our trusted and proven record go to work for you.