The Azucena Take: Commercial Real Estate and a Post-Pandemic Market

Hope springs eternal.

That has been the outlook among investors since the end of January. As we overcome the omicron wave, numerous states have scaled back even more on social and economic guidelines. At this point, it's expected that COVID-19 will become an endemic (when an illness becomes common among the population). 

For the commercial real estate market, that means a return to normal economic activities. 

As of February 2022, air travel is only 8% below what it was around the same time back in 2020. With this comes a boom in hotel services, especially limited-service ones. Full-service hotels that cater to business are still lagging but that is expected to change in 2022. 

While on the topic of the business world, there has also been an uptick of employees returning to the office. This is still way below pre-pandemic numbers but it gives a good idea for employers on how they should plan for 2022. If there is not another surge, investors should have a better idea of the future of the office market in the years to come. 

The retail market is already been recovering and the omicron surge was only a speed bump. Restaurants, shops, and services saw a jump in activity starting in mid-2021. The momentum has been going strong going into 2022. Movie theaters, gyms, and restaurants are expected to see momentum in the coming months as life returns to normal. It's also expected that tourist-heavy metros will see a major boom in activity. 

Going into 2022; investors are not concerned about the economic impact of the pandemic. This should allow properties that failed to gain momentum in 2021 to thrive. Meanwhile, investors are will be more concerned about inflation and potentially rising interest rates. Thankfully these are challenges a smart investor could overcome if they have planned accordingly.

The Azucena Take provides an inside look into the investment real estate market using the research done and data collected by Marcus & Millichap.