If you are an experienced and savvy investor you understand the risks that come with every investment. As we come out of the pandemic, you might be wondering if investing in commercial real estate is a good move right now - Well, let's discuss the current market in each sector of Commercial Real Estate white rock and what this might mean to you.
Industrial -Investors continue to have confidence in the industrial sector since it's been performing well at all levels in part because of additional e-commerce-related demand from the pandemic. There's an abundance of capital, especially institutional-grade capital, that needs safety and the preservation of wealth, Real estate, especially within the industrial sector, currently offers that opportunity.
Offices - The move to the suburbs that started during the pandemic impacted commercial real estate in urban centers, but the move back to the cities is already happening. We're starting to see more and more companies announcing dates of when they expect a full return of their employees to their offices, but realistically we anticipate hybrid work models to keep happening. Office leases tend to last from 2 to 10 years, so this will be a more drawn-out process to see the long-term impact on offices.
Retail - Parts of the retail sector have had to juggle short-term issues — such as limited rent collection from closed shops — along with long-term headwinds that were already creating headaches for some property owners before the pandemic. Grocery-anchored, needs-based retail did very well during the pandemic. It checked off the box as a resilient part of the retail sector. Prior to the pandemic, some retail investors were having success with experiential retail, bringing people to town centers and malls for events and entertainment as well as shopping. Now we're starting to see people wanting to get out again, so this may be a boost to those retail sites as they reopen. However, vacancy rates are still high in many retail sites because of tenants that didn't make it through the economic shutdown. Investors are reluctant to invest in retail right now even though there may be opportunities because this sector is under pressure.
Warehouses - Warehouses are doing great right now. With more business growing their e-commerce by the day, they are all requiring a space to store their merchandise - From large retail stores to small and medium startups. E-commerce is expected to prevail.
So, depending on your tolerance for risk, there could be some really good commercial real estate opportunities in 2022 and beyond. Lean on the expertise and knowledge of a professional Real Estate agent and start discussing your goals today.