Is 2022 a Good Year for Real Estate?

The impacts of COVID-19 and other global events have affected economies the world over. Through these trying times, commercial real estate (CRE) has managed to revitalize the economy more than ever. In 2021 alone, the construction of warehouse, office, industrial, and retail properties contributed $658 billion to the US GDP. Having access to reliable CRE insights is what drives commercial real estate data to new and continued business in this market. To further express how this industry thrives through adversity, in 2020, the first year of the pandemic, the commercial real estate market size grew to roughly $10 trillion in the US. That was up from around $9.5 trillion the year before.

2022 is looking to be on the rise for those looking to either begin investing in or expanding their portfolio in the commercial real estate world. This blog will provide more information on why 2022 looks positive, common challenges, trends to look out for, and how Canyon Data can set you up for success. 

What Are the Challenges of Commercial Real Estate?

Before we jump into the exciting new trends and profitable properties to look out for, it is important to look at the challenges 2022 presents to the commercial real estate business, both old and new.

• Supply Chain: One of the recent challenges those involved in CRE have had to navigate is supply chain issues. As supplier demand lowered and staffing shortages grew during the height of the pandemic, these numbers are returning to positive spaces similar to pre-pandemic levels. This process takes time, and with building material shortages being a direct result, it may be some time before we are back to “normal.”
• Finding Tenants: Finding the right tenants for a specific property will always be a huge hurdle to overcome for commercial real estate owners and investors. Tenants need a building to match their needs in terms of what they require for location, amenities, and business culture if a company is renting/buying the unit. 
• Labor Drought: A challenge that is not necessarily new but has made significant waves over the last year is commonly dubbed “The Great Resignation.” This is a severe labor crisis that impacts every industry. An unreliable labor force poses similar challenges to supply chain issues. 

While it can seem like new challenges are constantly popping up to make CRE investments complex, there is a way to navigate them easily. Having trusted and accurate data can allow you to make the most informed decisions about the market. At Canyon Data, we make use of a proprietary process, utilizing robotics, artificial intelligence, and human collaboration to verify data that overcomes the 40-50% data inaccuracy problem in commercial real estate. 

Current Trends in Commercial Real Estate

Similar to the fashion industry, trends come and go in commercial real estate. As with most trends, you can enjoy an increased return on investment (ROI) early enough if you can catch them. However, if you join too late, you’ll often invest your money into an area that will provide a much slower ROI. To help stay ahead of the curve, here are two trends to keep an eye on in 2022. 

• Secondary Markets on the Rise: It is no secret that larger markets like New York and California have been experiencing a mass exodus, and these people are heading to smaller markets like Nashville, Tampa, and Boise. Property value increases where the jobs and people are, so keep your eyes out for smaller markets moving forward. 
• Don’t Give Up on Office Space: While work from home and hybrid models are becoming the new normal, it can seem like it is time to abandon office spaces altogether. Renting out communal areas that businesses can rent for a specific time is a consistent way to keep the property occupied while companies define what their in-office work will be moving forward. 

Commercial real estate market growth can sometimes rely on trends. For the most part, they will come and go, but a few sectors of commercial real estate have shown consistent success for its investors.

What is the Most Profitable Commercial Real Estate?

To accurately determine the best investment in commercial real estate, we need to look at the data. Commercial property tends to yield between 6% and 12% ROI on average. With this information, the most profitable CRE  is the one you know the full picture of. The only way to get that full picture is by having the most cutting-edge data to make your decisions from. Canyon Data’s CRE dataset fills in holes to show the significance of a potential investment and a clear picture of what a building should cost so you can make decisions confidently

Canyon Data: Accurate Data Makes Profitable Decisions

Whether it is your first venture into commercial real estate or just your next expansion, having the correct data makes all the difference. Typically, data is scraped without verification, and it does not include data points that are important to all those involved in the market.

Canyon Data is here to fill that gap. Contact us today to see what our continuously-updated dataset for all commercial real estate can do for your team.