Analysis from commercial real estate exchange site Crexi indicates that despite the challenges posed for the commercial real estate industry, 2022 could be a good year for property values and prices.
Due to rising inflation, the labor shortage, supply chain issues, and more, CRE is most definitely expected to face obstacles throughout the year. However, vaccine and booster rates, as well as the recently passed infrastructure bill may help provide capital that could improve the industry’s future.
For instance, Crexi found that asking prices during the fourth quarter of 2021 jumped to 4.62%, while prices saw a 18.4% year-over-year growth last year.
Still, occupancy levels fell from 84.63% in 2020 to 80.54% in 2021 due absorption decisions being “postponed and adapted to Delta and Omicron waves.”
On the bright side, the end of 2021 saw buyers more active, with over half of buyer traffic coming from properties out of state. Focus on real estate that were “utility-specific” saw a particular rise, such as gas stations and self-storage.
Industrial real estate was the top performing asset last year despite decreased supply, with asking prices up 9.12% during the fourth quarter. This is likely due to there being less supply compared to the third quarter.
In addition to these spaces, asking prices for offices, coworking spaces, and flexible offices were up due to the overall increased demand for these types of workspaces. With more of the workforce having access to hybrid work arrangements than ever before, agile offices are becoming increasingly relevant.
