Plaza Companies has been one of Arizona’s leading commercial real estate firms for almost 40 years. One reason for this is our extraordinary insight on real estate trends that help to meet your business needs. Our commercial real estate expertise is one of the many reasons investors come to us for innovative solutions. Read our article below to learn more about what commercial real estate trends to look out for in 2022.
A Growing Consensus for Environmental Considerations
In the recent Emerging Trends in Real Estate 2022 report from PwC US and the Urban Land Institute, 82 percent of commercial real estate industry professionals said that they consider environmental, social, and corporate governance elements when making operational decisions. There is a growing consensus in real estate that the industry bears a large responsibility for climate change. Professionals believe that the real estate industry is positioned better than many other industries to institute helpful improvements that limit their impacts on the environment.
Most commercial real estate companies are already in the early stages of addressing climate change. This year addressing sustainability concerns is indicated as high priority from the community. Sustainable properties are often key to better tenant experiences, so it is imperative for real estate companies to create a strong overall strategy to help create sustainable advantages and value. Environmental real estate trends will be key in 2022.
Office Space Real Estate Trends
The COVID-19 pandemic is continuing to affect office space real estate trends. Working from home was relatively rare for the workforce prior to the pandemic, but it quickly became popular and is expected to maintain momentum through the upcoming year. While some companies have started bringing people back into the office, there are still many major employers who have not and probably won’t in 2022, given the continued uncertainty of COVID-19. Real estate industry leaders predict that office space utilization will likely decrease between 5 and 15 percent within the next three years.
As the importance of office space continues to shift, flexible working arrangements, organizational opportunities, and technology access are key to creating a better tenant experience. More commercial properties will be retrofitting properties and repurposing their space in order to make the most of the space made available by remote employees. The effect of employee trends on commercial properties will be important to watch out for in 2022.
Industrial Space on The Rise
E-commerce is gaining popularity heading into 2022 and is a major driver of industrial real estate trends. Demand for warehouse space has driven prices higher and vacancies lower throughout the past year and this shift is expected to continue. Retailers of all sizes, from Walmart to small craft store owners, are driving the growth of distribution facilities. At one point this year, Amazon accounted for nine of the 10 largest warehouse construction projects in the country. Going into 2022, manufacturers will also be requiring more space as more and more people are switching to online shopping for a wide range of products.
Retail Real Estate Trends
While industrial real estate is on the rise with the growing popularity of e-commerce, retail real estate is more unpredictable during this time. During the last year, thousands of stores closed their doors, and while that trend has slowed down, UBS, a multinational investment bank, is still estimating that about 9% of total stores in the country will close by 2026. Essential brands such as grocery and convenience stores will continue to be stable retail tenants and individual entrepreneurs fill strip malls and downtown spaces that were previously unaffordable to them as rent prices decrease to fill retail vacancies.
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As one of the top Phoenix development services companies, Plaza Companies has partnered with a diverse range of clients. Our team of experts ensures our clients’ highest standards are met. We provide customized services designed to target cost-efficient operations and build a strong ROI. Contact us today to learn more about our development and commercial construction services.