Despite the challenges presented by the pandemic, such as the decline in demand for office space, the commercial real estate market is growing at a good pace. According to experts, industrial and retail properties are performing the best, while the hotel and hospitality industry is recovering quite well. Plus, apartment buildings are becoming great investments as rents are rising across the board.
The housing shortage is likely to keep rents on the incline, with an expected increase of more than 10 percent over the next two years. The best performer in 2021? Multifamily investment volume surpassed any asset class in history ever, coming in at an impressive $352 billion worth of investments.
Why should you consider investing in the commercial real estate market? There’s always the good old standby: people are always going to need a place to live. And as the housing shortage and the resale market continue to careen on a dangerous path, more people will be looking to rent and be willing to pay higher prices to do so. These factors, along with the performance of the industrial and retail spaces, make it a better time than you might think to invest in commercial real estate.
Land development is another great investment opportunity for those looking to get in while the market is good. As more developers address the housing shortage, the value of land is going to become an asset that no one can ignore.
Forbes also tells us that secondary markets are going to outrank major cities as places for businesses to set up shop. As more people embrace the remote work model, location is less important for accessibility, which should open up a lot of opportunities for development and growth in smaller markets. Cities like Phoenix, Atlanta, and Charlotte are likely to see the biggest growth in jobs and investment opportunities, while larger cities like New York and Chicago may find themselves struggling to keep up.
Another pandemic-related issue working in the favor of investors? The rising construction costs—it’s getting increasingly more expensive to build new properties, thereby enhancing the value in the existing properties out there. If you’re not already holding commercial real estate investments, you should be. The market trends, of course, are just trends and not guarantees by any means. If you do your homework, however, you’ll find this could be the ideal investment at the ideal time for your financial goals.
If you’re ready to explore commercial real estate investment opportunities, the Houlihan Family has been in the real estate business in the NY Metro region since 1883. Houlihan & O’Malley is an esteemed firm with extensive experience in the areas of commercial brokerage, commercial mortgage, commercial appraisal, and advisory services.