US Office Vacancies to Remain Elevated in 2022; Commercial Recovery Uneven, Realtors Say
04:26 PM EDT, 05/07/2021 (MT Newswires) -- The US office vacancy rate is expected to remain elevated at almost 17% in 2022, while retail vacancies are projected to settle at just under 12%, according to the National Association of Realtors (NAR).
The rates will remain high relative to pre-pandemic levels as hybrid work models become the norm in the US, according to Lawrence Yun, chief economist at NAR, and John Worth, executive vice president at the National Association of Real Estate Investment Trusts.
While commercial valuations are recovering, the improvements are occurring unevenly across various property types, Worth said. REIT funds invested in cell towers, data centers and logistics facilities, as well as single-family homes, self-storage and timber have generated high returns, he said
Yun expects a lot of spending in Q2 as consumers tap into savings built upo over the last year and unspent stimulus funds. Hotels, restaurants, theaters and other entertainment and hospitality businesses are expected to benefit from the pent-up demand.
"Economic expansion and the jobs recovery will lead to rises in occupancy across all commercial real estate property types," Yun added.