If you are considering getting started in or growing your assets in commercial real estate (CRE), the experts at The DiGiovanni Group in Houston, TX, have some advice. Due to a growing recession, this market could be more challenging this year but still profitable if you make the right choices. We’ll go into more detail here about what our eyes see on the horizon for commercial real estate trends in 2023.
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The Impact of Macroeconomics on CRE
Geopolitical and national issues have been heavily affecting the volatility of the CRE marketplace. Inflation and interest rates have risen due to situations like Russian sanctions, Ukraine, and record-high inflation. Hence, investors in commercial properties are experiencing a downturn at the moment. However, investors can take a jump in to assist now and see profits in the near future.
Multifamily Properties are Performing Well
If investing in condos, townhomes, or other types of multifamily housing is possible, this could be the perfect time to do so. Currently, this area of CRE is the highest-performing class, but owners are not immune to the cost increases that come with shortages of supplies and labor losses.
The upside to owning a multifamily property during these times is the rising demand for affordable housing. By far, people and workforce companies are seeking these types of properties that don’t eat too far into their budget.
Industrial Properties are a Go
More people have shopped online recently, and current issues have cemented that sentiment. Therefore, the increase in e-commerce has seen the need for industrial and warehouse space rise. Those who want to drive innovation and improve distribution can find these properties rather lucrative.
Retail Space Forecast
It’s all about location in retail space when investing, but the category of items offered matters, too. Consider this—some people want to shop personally at a grocery store or pick up a cup of coffee, but they might not feel confident going to a significant store. Projections look great for neighborhood retailers compared to major ones, making CRE a good choice for new and up-and-coming investors.
The Outlook on Office Space
Office buildings and the predictions for their future remain up in the air. Due to unforeseen circumstances, vacancies have risen as the world uses the internet to comply with social distancing. Yet, office buildings with specific amenities and perks for workers, like child care, outdoor space, and food services, are seeing an increase in staff returning.
Invest in Houston Commercial Real Estate with a Pro Backing You
The DiGiovanni Group is based in Houston, TX, and is about committing to your long-term growth as a CRE investor. If you are looking to make above average returns on your money backed by a hard asset, contact Ryan DiGiovanni and his team today!