Commercial real estate is booming, despite a myriad of setbacks. The pandemic changed our world, changing the way we lived, worked, and shopped.
CINCINNATI, OHIO, UNITED STATES, March 7, 2022 /EINPresswire.com/ — Commercial real estate is booming, despite a myriad of setbacks. The pandemic changed our world, changing the way we lived, worked, and shopped. Surprisingly, this didn’t result in a commercial real estate downturn. According to Joe Fairless, co-founder of Ashcroft Capital, commercial real estate will continue to stay strong.
Commercial Real Estate Enjoying More Than a Decade of Expansion
Joe Fairless notes that in 2019, the commercial real estate market reached a milestone. It marked a decade of continued growth in the market. This is the longest growth period of the post-war era.
The trend has continued, with 2021 breaking records for commercial real estate. The foreclosure rate has not increased significantly during the pandemic. Both private equity and pension funds spent record amounts on new commercial buildings.
The U.S. composite and non-distress index have experienced huge growth. It has increased 350% since 1996. The U.S. investment-grade non-distress index followed a similar track, increasing 338%.
Industrial Real Estate
One of the largest increases has been seen in industrial real estate. Joe Fairless states that this growth is largely due to warehouses needed for online retail shopping. Vacancies are at an all-time low, and prices have reached record highs.
This, along with a reduction in a traditional office and retail real estate needs, calls for some creative solutions. Retail stores are closing their doors. More office workers are choosing to remain at home in the wake of the pandemic.
The demand for these types of real estate has not increased at the breakneck pace of industrial real estate. Some retail and office locations may be better suited as warehouses and distribution centers.
This is the strategy the e-commerce giant Amazon has adopted. They are spending hundreds of millions of dollars transforming unused buildings into warehouses and distribution centers. This includes office space, closed malls, and even golf courses.
Amazon alone is spending hundreds of millions of dollars to transform office space, derelict malls, and even golf courses into warehouses and distribution centers, according to CNBC.
Multi-family homes have experienced hyper-growth over the past decade. Even the 2020 pandemic didn’t cause the growth to stall. 2020 had a 50% increase in multi-family units when compared to 2019.
Joe Fairless notes that the occupancy rate is at near capacity, as of July 21, at 96.9%. This exceeds the previous record of 96.5% in 2000. Rent increased 10% in over half of the 150 largest markets as well.
The competition for multi-family homes is very heated right now. It’s commonplace for investors to overbid deals worth more than half a billion dollars by a margin of 5-10%.
Joe Fairless is a real estate expert, and the co-founder of Ashcroft Capital. The company has over $1 billion in assets under its management.
Joe Fairless is passionate about passing his real estate knowledge on to others, from beginners to long-time investors.
This is why he created the podcast, Best Real Estate Investing Advice Ever Show. The show is the longest-running podcast in the daily real estate category, with over 500,000 downloads each month.