A December national poll found that 69% of commercial renewable energy brokers said they made more money in 2021 than in 2020, and a NAR report predicts a strong year in 2022.
DENVER – Sixty-nine percent of commercial real estate brokers say they made more money in 2021 than in 2020, according to the latest Apto National Broker Buzz survey in December 2021. They are even more optimistic for this year.
Commercial real estate has experienced a dramatic recovery since the start of the pandemic. 2021 marked a big turning point for the sector, especially in multi-family and industrial spaces, as well as a demonstrated resilience in the brick and mortar retail trade, according to the National Association of RealtorsÂ®” December 2021 Commercial Market Outlook.
In fact, the investment acquisitions helped the commercial sector in 2021 to surpass pre-pandemic levels. “This strong foundation for recovery puts the commercial market on pace with sustained demand for the commercial and investor sectors in 2022,” NAR says in its report.
This translates to more business for commercial real estate practitioners. Sixty-six percent of brokers say they completed more transactions in 2021 than in 2020. Additionally, 60% of brokers expect 2022 to be an even better year in terms of profitability, according to the Apto survey.
“The survey results reflect the overall strength of the economy over the past year, which resulted in most brokers making more money, especially those focused on industrial real estate. or multi-family, âsaid Tanner McGraw, former CRE broker and founder of Apto, a commercial real estate company. software company for real estate brokers.
âBut the tide is turning for high-quality commercial real estate and offices. As we know, brokers can do well if owners and investors buy or sell, or if tenants add or lose space. It’s the movement that matters, and we’ve seen tremendous business activity in the economy in 2021. â
CRE sectors to watch
The multi-family sector, in particular, had a historic year in 2021. Vacancy rates hit a record high in December 2021 while median asking rent growth hit a record 11% year-over-year, reports NAR. Rental demand has skyrocketed since the start of the pandemic as double-digit home price growth has cost some aspiring landlords dear and turned them into renters.
In addition, the industrial real estate market had a record year, benefiting from a windfall due to the continued growth in online shopping. Nearly 700 million square feet of space has been absorbed since the start of the pandemic, and rents have skyrocketed to record highs of 8.4%, reports NAR. Meanwhile, vacancies have fallen to historically low levels.
NAR expects demand for commercial real estate to strengthen in 2022, despite a widely expected interest rate hike this year. Persistent strong demand and supply will keep commercial real estate strong, according to NAR.
The multi-family sector is expected to remain robust. Additionally, NAR researchers are optimistic that brick-and-mortar will continue to gain as it consolidates its place as a complement to online shopping execution. Growth in the brick and mortar retail market is expected to be largely driven by smaller stores, such as neighborhood malls, malls, and single-tenant stores.
Additionally, the office market will likely continue to experience an increase in net absorption as more workers return to the office, even if only on a hybrid work schedule.
Seventy-five percent of brokers who work in an office report returning to the office after the vacation, according to the Apto survey.
âIt’s nice to see brokers back in the office leading the way as real estate consumers,â adds McGraw. âThe new variant of the coronavirus poses a last-minute threat to returns to the office, but the desire and intention to be in the office is very apparent from the broker’s response to our investigation. “
Source: NAR Commercial Market Outlook for December 2021
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