What’s changed: Market conditions since COVID-19
Unprecedented disruption and responses are reshaping commercial real estate
- Christian Beaudoin
The past two years have been challenging in many ways. 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.
Though the relative performance and resiliency of property sectors remains uneven, recent activity and economic performance indicators provide reasons for optimism leading into 2022.
- Total employment has nearly recovered, sitting at 97.2% of pre-pandemic levels, with office-using sectors leading recovery.
- Venture capital-backed sectors are seeing 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.
- Office leasing activity has rebounded in recent quarters yet remains significantly below pre-COVID levels.
- Industrial recorded 106 million more square feet absorbed than delivered in 2021, the largest margin on record signaling a severe mismatch between supply and demand.
- Retail recovery is clearly underway, with over 54 million square feet of net absorption YTD – the highest since 2017.