Industry insights, market outlook reports and commercial real estate
news, and trends from the Coldwell Banker Commercial brand.
While the past few years have seen brick-and-mortar retailers embrace big-box stores with large footprints, a recent study from placer.ai found that smaller stores come with their own set of benefits. A growing number of tenants are experimenting with reduced footprints in a variety of ways.
In a reversal from sentiment at the beginning of this year, investors are becoming increasingly bearish about the commercial real estate market. Faced with an economic slowdown, inflation, rising interest rates, supply chain issues, labor shortages and the threat of a recession, investors and capital providers to take a step back and reassess their strategies as this year concludes and the next begins.
Commercial real estate activity remains elevated in 2022, which is a promising sign considering record-highs were reached last year. Market activity is being paced by three property types, multifamily, industrial, as well as a strong rebound in retail. A new Mid-Year Report from Coldwell Banker Commercial shows investors were eager to unlock cash flow and pushed cap rates to record-lows in 4Q21 and 1Q22 across most sectors. It is anticipated that demand for real estate will continue to be strong for high-growth markets. These positive signs comes despite widespread supply chain disruptions, inflation and political uncertainty around the war in Ukraine.
Despite uncertainty and volatility that cloud the economy, there’s reason to be a bit upbeat these days. A recent commercial property price report from researchers at MSCI’s RCA division shows the RCA CPPI National All-Property Index climbed 18.5% in June 2022 from a year prior. That’s close to the pricing growth rates of recent months and not far from the 19.5% record pace seen at the start of 2022. The index rose 1.3% from May.
A majority of adults in the United States currently have access to cannabis, whether medically or recreationally. As of this year, 19 states have legalized recreational cannabis use, while 39 states have legalized medical marijuana use. Over the years, the general perception of cannabis has evolved. Once seen as a danger to communities and to younger children, cannabis is now more readily available and marijuana sales produce taxable income for local economies.
The healthcare industry quickly adapted to virtual care delivery during the pandemic. For both caregivers and patients, the rapid transition from in-office to on-screen visits left much to be desired.
Throughout the pandemic, retailers have had to overcome continuous hurdles: expanding digital capabilities, maintaining a workforce, battling inflation’s rising prices, keeping products stocked during supply chain disruptions and more.
In part 1 of CBC’s Consumer Behavior Shifts & How it Impacts Real Estate blog series, we discussed the ways in which consumer behavior has changed over the past two years and how those changes impact every facet of retail strategy. In part two, we will dive into the long-term impact of COVID on consumer behaviors and patterns, how these patterns are impacting both the restaurant and retail industry, and the effects of online shopping.
It comes as no surprise that consumer behavior changed substantially over the past two years. For example, the rise of omnichannel, shifts towards hybrid work, the growth of leisure activities, and increased economic uncertainty all contributed to rapid and unpredictable changes in when, how, and where consumers shop. These changes impact every facet of retail strategy, from chain-level considerations like when to open stores, shelf-level arrangements on where to place products, to product-specific decisions for pricing, packaging, and marketing goods.
On June 2, 2022, Coldwell Banker Commercial’s Senior Vice President and Managing Director, Dan Spiegel, hosted Lawrence Yun, chief economist for the National Association of REALTORS® (NAR) for an insightful and fascinating discussion where viewers learned how the American economy is performing at the midyear mark, important factors to consider and how it is affecting commercial real estate across all asset classes.