Real estate is ever-changing, with ebbs and flows depending on the economy and needs of the buyers. Real estate developers such as James C. Dragon know that commercial real estate is not immune to the overall market. Commercial real estate refers to the buying and selling of properties used for businesses, in contrast to residential real estate where profit-generating activities generally do not happen. Here are seven commercial real estate trends for 2022.
Continued Lower Demand for Office Spaces
In 2020, employers allowed or even required employees who can perform their job duties remotely to do so. This trend has kept up over two years later, which has resulted in lower demand for office real estate. There has been some improvement since 2020 but still no rebound from pre-2020 levels. However, industries not sustained by remote work continue to boost commercial real estate.
Increased Demand for Hospitality Properties
Real estate intended for hospitality purposes, such as hotels, will see growth in 2022 after a decline in tourism due to the COVID-19 pandemic. Developers would do well to consider this market once again.
Leveling of the Supply Chain
The past couple of years saw difficulties in the supply chain, which affected new real estate construction. Fortunately, experts such as James C. Dragon are seeing the supply of items such as lumber start to come back.
Rise of Multifamily Properties
Multifamily properties, where a landlord rents out and makes a profit on several units in a building, continue to do well in 2022. A tight housing market further exacerbates this.
Difference in Office Spaces
Companies that do still have employees coming to the office are looking for different things in 2022. For example, many employers want buildings with amenities such as outdoor space in order to attract talented workers.
Changes to Strip Malls
Strip malls, or a collection of connected stores and restaurants located near a busy roadway, are still performing well in 2022. However, they are seeing some changes, such as an increase in non-traditional businesses like dental offices and other medical services.
Struggling Traditional Malls
Traditional indoor malls have been struggling for years, with some even closing outright. This trend continues in 2022 as developers consider how to repurpose these spaces.
If you are someone who deals with commercial real estate in 2022, consider these seven trends when making your next move.
James C. Dragon
An entrepreneur and commercial real estate developer, James C. Dragon previously owned properties such as the Central Plaza shopping center in Lowell, Massachusetts. As someone who is very involved in his community, he is a member of several organizations, including the Sports Museum of New England and the Lowell YMCA Advisory Committee. In his free time, James enjoys following baseball as well as playing golf and tennis.
