Trends to Watch in Commercial Real Estate

May 20, 2021

With all the talk about the hot residential real estate market, you may be wondering what is happening on the commercial side of the business. Although there is no denying the pandemic affected all classes of commercial real estate, there are signs of a rebound.

We asked our partners at CoStar, a commercial real estate information and analytics provider, to share some emerging trends and predictions to watch in each of the four classes of commercial real estate—industrial, apartment, office and retail.

Industrial. The powerhouse of the foursome, any industrial vacancy expansion right now, no matter the geography, is almost certainly tied to construction. Speculative space (that is, move-in ready space built by the property owner before a tenant signs a lease) is being rented in less than six months.

Apartment. Showing a rebound, apartment rentals are up in both rents and occupancies. Rental concessions are still very much in play in the larger, denser, principal cities.

Retail. With the rise in vaccination rates and pent-up demand for shopping, there’s been a gradual rise in retail leasing. As employers begin to bring employees back, even on a hybrid schedule, there’s expected to be a continued upward, yet gradual, trend of further retail leasing.

Office. While many businesses will soon welcome back employees, the office space sector is expected to take another one to two years to get back to normal levels of leasing. Analysts are seeing corporations leasing additional space to social distance employees returning to the office.

If you’re in the market for commercial real estate, contact Long & Foster’s commercial real estate division by clicking here.

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