CRE Trends For 2022

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Proverbially, rising tides are supposed to act equally on all vessels but nothing in today's world is truly equal anymore. Why should commercial real estate (CRE) be an exception?

Right off the bat, take the example of warehousing. While demand for offices and retail showrooms did the disappearing act, there's not enough empty warehouses around. 

With that as the premise, let's see what 2022 could look like for CRE. 

🧨 Warehousing

Demand for warehouse space all along the logistics pipeline drove prices to record heights and vacancies to record lows throughout 2021, thanks to ecommerce majorly. From Flipkart, Ikea to Nykaa, ecommerce majors are driving the growth of distribution facilities. 

Manufacturers will also be requiring more space as they look to start keeping more parts in stock on-site or nearby, going from "just in time" to "just in case" inventory practices.

🔥 Multifamily

Just like in industrial real estate, multifamily investors can expect strong demand to support higher rent in most markets - to the tune of 10% according to industry watchers. 

🤷‍♀️ Retail

Brick and mortar retail will continue an uneven roll even in 2022, especially with Omicron rearing its ugly head on the planet. 

For landlords, essential brands - grocery, healthcare - will continue to be stable tenants and anchors, and individual entrepreneurs could lease retail spaces that were previously unaffordable to them.

For investors, the structure that REITs/private investment houses typically use will continue to work well for those that have survived the retail apocalypse. 

🔥/🧊 Office

Offices shall continue to be a mixed bag - till 2024, per industry veterans. While some companies have started bringing people back to their desks, there's a long way to go for the office, given the continued uncertainty of COVID-19 and the effect of its variants. 

The shared economy (coworking, student housing) will begin to recover, increasing overall leasing volume and Tier - II, III cities will see an uptick in office space leasing.