The commercial real estate market has stayed strong and seen continued growth as governments and economies begin their recovery from the COVID-19 pandemic.
Although the commercial real estate industry still felt the effects of the shutdown during the last two years, the forecast for 2022 remains positive, said Jordan Fletcher, President of Gorge Holdings, a real estate company with projects throughout southern Ontario, including the Niagara Falls area.
“Thanks to ongoing demand across many industries, commercial real estate in Canada continues to show resilience to the worst of the pandemic,” Fletcher said. “I think we will see this real estate sector continue to grow for the foreseeable future.”
There are several reasons why commercial real estate will remain strong in 2022 and beyond.
Workers Return to Offices
Commercial real estate has also been helped by the strength of the industrial sector, which also continues to grow in market size. At the same time, the rollback of social distancing rules has allowed many companies to reopen their doors and offices to employees that have been working from home for years, Fletcher said.
“That increases the need for office space, resulting in more growth for both commercial and industrial real estate,” Niagara’s Jordan Fletcher said.
While many workers have shown resistance to returning to traditional offices, companies have begun offering incentives to ensure their return, CTV News reported.
One such company, ServiceNow Canada, an enterprise software company with offices in Montreal and Toronto, hopes to bring back employees with free meals and events like a Taco Tuesday lunch, a pop-up from a local bakery and a pizza making event.
"We want to get back to this mindset where human connection is valuable and healthy," Marc LeCuyer, vice-president and general manager of ServiceNow Canada, said in the article. “We want to set the stage for a return to the office in a very positive way.”
Social Distancing Requires More Space
There’s another important factor as well: While the majority of severe social distancing restrictions have been removed, there will continue to be a demand for greater physical distance between workstations, as the most basic of precautionary measures will likely continue to be relevant.
Once again, that drives a need for additional office space that will boost the commercial real estate sector.
Rise of Coworking
It’s clear that the pandemic has changed the world in ways that won’t soon change, even with a complete remission of the coronavirus. Remote work, for example, isn’t going anywhere. It has already become a more widely accepted part of work-life balance, especially among younger generations.
While many people will continue to work from home, it’s also likely that remote work will fuel the rise of more co-working spaces. Indeed, market observers have already seen an increase in demand for such workplaces. That’s partly because people still want a workplace away from their home, even if their company’s headquarters is in a different country, Fletcher said.
Both The Globe and Mail and The New York Timeshave recently reported on the growth of coworking spaces.
“In uncertain times — as start-ups undergo tremendous growth, with the knowledge that the funding spigot may yet turn off — short-term leases are more appealing than ever. Start-ups are flocking to spaces like WeWork, the national chain, as well as smaller co-working companies with more elaborate designs like the San Francisco-based Canopy and the New York-based Industrious,” The New York Times wrote.
What’s clear from all these trends is that commercial real estate will remain a resilient and growing part of the real estate industry, Fletcher said.
“It’s a very exciting time to be working in commercial real estate,” he said.
