It’s safe to say that the past two years have changed our lives in ways that most of us could never have imagined — including how we work. As 2021 has come to a close and we reflect back on the last 12 months, we can see the impact that the COVID-19 pandemic had on the commercial real estate industry. Looking forward to 2022 and beyond, here are 5 CRE leasing trends that we’ll be watching.
The Return of Coworking
When the workforce began working from home en masse after the threat of COVID-19, many people declared that the era of coworking was over. And while it’s true that many companies halted coworking in an effort to protect their employees, we predict that you’ll see more businesses returning to coworking and shared office space in 2022. Additionally, expect to see some familiar businesses who had to shutter their offices due to the pandemic popping back up in coworking spaces, allowing their team and customers a space for collaboration and meetings.
More Flexible Leasing Options
It comes as no surprise that the pandemic caused a record number of businesses to face financial uncertainty — even those that were financially comfortable or sound at the beginning of the pandemic. As a result, as businesses continue toward their “new normal,” expect to see many of them looking for maximum flexibility when it comes to commercial lease portfolios. We expect to see more flexible lease terms, such as short-term leases, become more popular in 2022 as the national economy continues to recover.
Warehouse Space Will Continue to Be in Demand
Online shopping grew exponentially during the COVID-19 pandemic, which likely shifted online shopping habits for good. Today, more people than ever have items delivered straight to their door — and many plan to continue, thanks to the convenience of online shopping and delivery. As a result, we predict that more retailers, both large and small, will be leasing additional warehouse space in 2022, in order to keep more inventory on hand or provide faster shipping to their customers.
Subleasing Will Likely Become More Popular
With many companies announcing that they will allow their employees to work from home permanently, we expect to see a number of companies looking for or creating opportunities to sublease at least part of their physical space, or to transfer their existing leases to new tenants. This is good news for retailers or companies who are considering expanding or relocating, as they should be able to find more options beyond traditional leases for commercial real estate.
Existing Commercial Space Will Get Repurposed
Many retailers have had to close their doors for good in response to the COVID-19 pandemic. As a result, there are a number of commercial real estate vacancies, especially in shopping malls and traditional outdoor shopping centers. Companies who are looking to expand their operations will likely take advantage of this in 2022, repurposing these surplus vacancies to suit their individual needs, from nontraditional office spaces to warehousing or fulfillment centers — and at a discounted price.
For more on leasing insights, or to stay informed on other commercial real estate trends, be sure to explore the RealNex Blog.