The commercial real estate market is facing a number of challenges that are likely to lead to serious consequences in lifestyle. The pandemic has heavily impacted businesses worldwide and this struggle has directly impacted the current trends happening within the commercial real estate market. Office space leasing, in particular, is suffering post-pandemic. One of the biggest challenges is the rise in office vacancies, which has been particularly noticeable in San Francisco. Additionally, the pandemic has resulted in a decrease in office space demand per employee.
Despite these challenges, there are still opportunities in the commercial real estate market for those willing to take risks. Data centers and industrial real estate are expected to be the most resilient in the coming year, while the hotel sector is likely to continue recovering from pandemic restrictions. Other examples of commercial real estate include retail, multifamily properties, industrial properties, hotel and hospitality properties, special purpose buildings, and land.
In terms of trends for 2023, investors may consider value-add, opportunistic, and core properties, with the strongest preference for value-add properties. Industrial, multifamily and single-family rentals, self-storage, and data centers are all expected to continue attracting interest. While the market is currently facing significant challenges, there are still opportunities for those willing to take risks and invest in resilient sectors.