CRE In the City and Suburbs: A Positive Outlook

February 1, 2022

As we begin 2022, I predict the commercial real estate industry will not only continue to get back to the pre-pandemic ways of life, but there will still be a great deal of balance between the city and suburban markets. Companies typically make part of their real estate decisions predicated on where their employees want to live and work. Based on recent conversations I am having with decision makers, it seems we will get back to a fairly balanced growth in both the cities and suburbs. Certainly, some companies are still in the middle of the decision-making process, but most are starting to make very optimistic real estate plans now that we are almost two years into the COVID world.

News continues to change on a daily basis, but with vaccinations the idea of a return to normal seems a whole lot closer than it did in 2021. Many people who moved out of the cities during the height of the pandemic will likely choose to remain in the suburbs, depending on their family circumstances and comfort level, but for many, remaining in the city is preferable. The COVID speculation of a potentially large shift to suburban workspaces and negative impact on city offices does not seem likely. I believe we’ll continue to see small percentages leaving the city, but not enough to make a big impact.  

Over the next few years, demand should continue to increase in both the city and suburban markets within not just the industrial, life science, and health care markets, but also education and corporate which were hardest hit by the pandemic. Humans crave being social and many people love living in the city, as shown by the continuous growth within the multi-family market, which arguably has not been significantly affected by current events. These factors will drive the demand for office space in the city. The same goes for the suburbs, as we have seen constant growth and demand in various developments, such as town centers which offer a variety of amenities, such as apartment, retail, and restaurant options.  \

In addition, companies have been certainly seeing the importance of providing space for their employees who do not have a private office at home, have young children, or other factors which affect productivity. Mental health also plays a huge role in work/life balance, and most employees have discovered they have missed consistent interaction with their fellow colleagues.

Everyone in the commercial real estate industry should be optimistic about the future of the city and suburban markets!



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