Commercial Real Estate Roundup – When Is The CRE Bubble Going To Burst?

commercial real estate bubbleIt has been a while so what better time to blog? Let’s tackle a subject that is on the minds of many people these days, when is the commercial real estate bubble going to burst? For some clues we look to the residential market, which traditionally is six months ahead of the commercial market. While nationally the residential market has shown signs of slowing, I don’t see it happening in Florida until 2022. Which brings us to the commercial sectors. Industrial is one sector that I don’t see headed for a crash, it is the most solid investment there is at this point. That is followed by multifamily, which is on fire now. But it can’t last forever and I think the bubble will burst in 2022. This is especially tough for all the developers out there who are building product, they will miss the boom by the time their projects come to the market. Retail is surprisingly holding its own right now. Retail landlords have either not discounted rents or increased them in Florida. I also see downward movement here in 2022.

Finally this brings us to office, hands down the biggest loser of the pandemic. It will take years, if ever, for this sector to recover to pre-pandemic levels. It is also evolving quickly, with lots of short term options becoming available as tenants need less space for less time. The appetite for buying is voracious despite the overvalued market and there are no “deals” out there but there are still low interest rates. If you have any questions and or any commercial real estate needs that I can assist with please let me know!

As always, thank you for reading and have a great day.

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