ULI Publishes Emerging Trends in Real Estate® United States and Canada 2024

As the winds of change continue to reshape the landscape of commercial real estate, it’s evident that we’re entering a new era—a “Great Reset.” The post-pandemic world is here to stay, and our industry faces profound shifts, not only in office spaces but across the real estate spectrum. 

The challenge of “higher for longer” looms, raising questions about the future of investment strategies. With inflation expectations in flux and the Federal Reserve’s uncertain path, the road ahead is uncertain. The question we must consider is: How do we navigate this evolving landscape, redefine our strategies, and safeguard against potential property value losses in this new era of commercial real estate?

In the face of recent interest rate increases, commercial real estate professionals are pivoting their focus to property market fundamentals for optimal returns. Emphasis is now placed on competitive property supply and tenant demand, resulting in decreased investor interest in the industrial sector, which is experiencing rent-muting deliveries, and a decline in demand for office buildings due to shrinking tenant space needs.

Notably, the retail sector is experiencing a remarkable resurgence driven by a collective reassessment, with retail properties gaining the largest one-year score increase in over a decade. While the housing sector is currently favored, single-family housing stands out for its substantial gain, despite rising mortgage rates. The office sector’s woes continue, experiencing a further decline in favorability among survey respondents, while data centers remain a preferred property subsector. Overall, the industry is witnessing a shift in investment preferences, reflecting the dynamic nature of the commercial real estate market.

To continue reading: https://knowledge.uli.org/reports/emerging-trends/2024/emerging-trends-in-real-estate-united-states-and-canada-2024