The post-pandemic (or at least post-worst of it) real estate marketplace is a fascinating one, holding new realities for buyers and sellers, owners and tenants alike.
PricewaterhouseCoopers recently released the 2022 edition of their Emerging Trends in Real Estate Report. With Raleigh-Durham ranked 2nd on their Top 10 Cities for Real Estate (and nearby Charlotte ranked 6th), this report is especially important for the Triangle. Here are some of the key takeaways from this report.
Traditional Markets Declining
Real estate investment is typically associated with the country’s biggest, most expensive areas: the Bay, Manhattan, Los Angeles. But this year, only two major coastal cities – Boston and Seattle – managed to crack pwc’s top 10.
The pandemic is partially responsible for this. With costs of living in those exclusive areas skyrocketing, people are drawn towards more affordable areas like the Triangle, Atlanta, and Nashville.
While cities definitely took a hit during the pandemic – see above – downtowns are seeing some interesting changes. For one, rents are lower. While painful for property owners, this is also an opportunity to reel in new long-term tenants who can benefit from gradual economic recovery.
And as the economy recovers, owners can expect values to continue rising. Pwc notes a growing trend towards reallocating outdoor spaces for pedestrian use, and a decline in mass transit use heralds potentially huge value for foot-accessible properties.
The “death of retail” has been a mantra for years, but retail emerged from the pandemic surprisingly intact. Retail sales rebounded after a brief downturn in Spring 2020, even as rents stopped being paid and civil unrest affected some city centers. This is largely thanks to government assistance through PPP and extended unemployment benefits, which maintained the economy through the turmoil.
That said, some 110,000 restaurants closed, even as businesses moved towards online ordering as a standard feature. That said, entrepreneurship is actually at its highest level in two decades since banks and centers of wealth actually gained money during the pandemic, providing investment capital for new businesses. So while traditional retail outlets like malls will continue to decline, both investors and tenants face an optimistic future.
Need help navigating the commercial real estate landscape? Insight Property group offers brokerage, management, and investment advice for the booming Raleigh-Durham market. Contact us today, or check out our current listings.