News release

Economic improvements and increasing activity generate positive momentum for commercial real estate

JLL research highlights underscored performance indicators reshaping the industry 

January 12, 2022

Harvey Mireles

+1 214 438 6550


CHICAGO, Jan. 12, 2022 COVID-19’s unprecedented disruption to the economy – and equally unprecedented policy responses – has led to an uneven recovery that continues to reshape commercial real estate. Recent activity nationally and key economic performance indicators have provided reasons for optimism leading into 2022.

“In this disruption, there is opportunity,” said Christian Beaudoin, Senior Director of Research, JLL “Shutdowns and work-from-home mandates caused a dramatic pivot in space demand, and the relative performance of office, retail, industrial and living spaces diverged in ways never seen before. Investors and tenants are positioning themselves for the future, not just to survive, but to thrive.”

Though market performance remains volatile, we are getting a better sense of our near-term reality, especially how employers will move forward with commercial real estate decisions. According to JLL research, economic indicators and drivers are nearing pre-pandemic levels, generating additional activity and positive momentum.

Recently reported job numbers showed employment recovery has now reached 97% of pre-pandemic levels, but vary by industry. Office-using employers, such as finance and professional services, have effectively fully recovered, while those in leisure and hospitality remain nearly 10% below their pre-pandemic levels.

Additionally, venture capital-backed sectors are receiving an influx of funding, outperforming overall equity markets by more than 71%. Investors are targeting growth in both emerging technologies and those industries being reshaped by the pandemic. Life sciences, logistics, and fintech are among the primary beneficiaries.

As a result, the U.S. office market has recorded four consecutive quarters of growth in leasing volume as tenants increasingly targeting amenity rich buildings to help lure employees back to the office. This continued flight to quality is expected to increase to a projected 12% performance gap between differentiated and commodity assets over the next three years. JLL Research noted that despite subdued overall leasing activity, 29% below pre-pandemic levels, volume is up over 50%.

The industrial sector recorded 106 million more square feet absorbed than delivered in 2021, the largest margin on record signaling a severe mismatch between supply and demand, according to JLL Research. Still, insatiable demand has the current construction pipeline at more than 400 million square feet even as materials shortages push delivery dates further into the future. Supply-constrained coastal markets have seen the greatest rent growth amid continued demand from urban logistics.

Retail is seeing positive signs of recovery after recording four consecutive quarters of growth in net absorption volume. Q3 2021 was the highest level have reached since 2017. However, there is a clear geographical difference in retail recovery rates across the U.S., with Sun Belt markets outperforming those in the Northeast and California. Urban retail performance is still well below pre-Covid levels, and recovery will depend upon the return of office workers to cities as well as international tourism.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion in 2020, operations in over 80 countries and a global workforce of more than 95,000 as of September 30, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit