Wednesday, March 30, 2022 – by Derek English, president, Greater Chattanooga Realtors
Ask anyone and you are sure to hear the housing market has been on a consistent upward swing over the past few years. Yet, when we talk about real estate, people often focus solely on homes and the “For Sale” signs we see in our neighborhoods. Real estate is where we live, right? Of course it is, but it is so much more than that too.
Commercial real estate is all around us – where you work, shop, dine, and grab your morning coffee.
From the industrial park to main street, commercial real estate is everywhere that isn’t your home.
In March 2020, many businesses closed temporarily, and unfortunately, many of those closures turned into permanent ones. This pattern led to an uncertain time for the commercial real estate market. However, there are hopeful signs that the national picture for commercial real estate is starting to adapt to these new circumstances.
The National Association of Realtors (NAR) reported that so far into 2022, all commercial sectors – multifamily, office, industrial, and retail – have been on a recovery path since the second half of 2021. NAR’s quarterly commercial market survey tracked how the pandemic affected working from home, the demand for office space, and how the space is used. Gay Cororaton, NAR’s Senior Economist and Director of Housing & Commercial Research, says their Q4 2021 survey reveals:
· 65% reported more businesses adopting a hybrid work schedule.
· 63% reported more businesses in their local markets leasing smaller spaces compared to the pre-pandemic level.
· 62% reported consolidation of office space in their local markets.
· 57% reported more businesses with lease terms of two years or less.
· 69% reported more businesses investing in facilities and redesigning workspaces to enhance sanitation, hygiene, and physical distancing.
This research supports the rising occupancy and rent growth commercial sectors have experienced in the last three months. In addition, the Bureau of Labor Statistics’ December 2021 Current Population Supplemental Survey showed that only 19 percent of workers whose occupations are “management, profession, or related occupations” or “office or administrative support” reported they had teleworked in the past four weeks. This trend is a hopeful sign that more and more businesses are returning to a more familiar version of “normal.”
While the continued increases in inflation and supply chain kinks are still at the fore front of conversations, it seems there is a welcoming bit of good news for commercial real estate. Regardless of their real estate discipline, Realtors remain the experts to consult with your real estate needs, whether personal or business.
