In years past, the commercial real estate market was largely a mom & pop industry. Then, sophisticated investors began looking at the market as an asset class offering superior returns. It has become one of the most highly favored investment opportunities, generating higher returns than most other investment options. Today, commercial real estate activity is one of the key barometers used to track the health of a region or the entire country.
While there continue to be concerned about global GDP growth, some instability in other countries and volatile political conditions, the U. S. economy and the commercial real estate market are experiencing positive growth.
Commercial Real Estate Trends that Impact the Market
Consider these market trends:
- Investors continue to seek commercial real estate opportunities in areas called “Opportunity Zones” in order to seek eligible capital gains from economic development in underserved communities.
- The industrial real estate boom is projected to continue based on the growth and high demand for e-commerce brands.
- In a twist on the growth of e-commerce, online retailers are now opening brick-and-mortar stores to achieve a type of omnichannel shopping experience for their customers.
- The increasing application of technology in business is accelerating the growth of property technology companies.
- The growth of the U. S. workforce has changed the dynamic of workforce housing from the standpoints of availability, being at the center of the action in major cities, and access to mass transit.
- Millennials continue to flock to “hipsturbias” and to suburban cities.
- Investors are now looking more strongly for higher yields in secondary and tertiary markets.
- Multi-story warehousing is increasing.
- The hotel category is achieving growth records.
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