New year, new predictions. We are looking at data from previous years to make an educated guess about how the commercial real estate field will perform this new year. Here is our 2023 commercial real estate industry outlook.
Due to high-interest rates and a recession, the start of 2023 will be rocky for commercial real estate. At the end of 2022, inflation ran at more than 7%. While this was ease from the beginning of 2022, it is still creating a barrier in the real estate market. This is not an ideal start to a new year; however, the recession will not be intense. Corporate finances are in good shape and employers will not engage in excessive layoffs to avoid losing employees. These factors suggest that the downturn will not be too disruptive. While the first half of 2023 is grim, the second half is expected to improve! Inflation will be significantly lower causing interest rates to fall.
The various commercial real estate properties will have diverse fates in 2023. Office space is still struggling to return to pre-pandemic numbers. On the bright side, it has increased throughout 2022, so it will likely continue to improve! As e-commerce continues to strive, so will industrial space. Likewise, multi-family properties are currently the highest performing and will stay that way well into 2023.
We are excited to see how the industry will perform in 2023 and are committed to doing our best to make it a successful year! If investing in commercial real estate is one of your 2023 goals, we can help you accomplish it. Contact us today!