🔮 6 Commercial Real Estate Trends to Watch 🏙️ Barry & Kim, REALTORS®, Hoey Team 🍀 239RealEstateDeals.Com LLC ☘ Directly Serving all of Southwest Florida 🌴

Dated: February 10 2024

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Experts say 2024 may be an opportunity for the commercial housing market to get back on solid footing by embracing shifting preferences and emerging trends.

Florida Realtor Magazine 2024 02 10 Commercial Real Estate Trends to Watch amidst ISO 20022 Basel III QFS Quantum Financial System XLM XRP Stellar UBS NESARA GESARA BRICS Bretton Woods 239RealEstateDeals.Com LLC

WASHINGTON – As we enter a new year, the commercial real estate industry finds itself at yet another crossroads.

The market is continuing to take shape and redefine itself after several years of new challenges. In 2023, the industry remained on unsteady grounds as economic uncertainty persisted, return-to-work plans shifted at large companies, and rising interest rates continued to limit access to affordable capital. As a result, many real estate firms are still experiencing revenue declines thanks to higher vacancy rates and slow rent growth.

However, despite the challenging conditions of the past several years, there's still plenty of reasons to be optimistic about the commercial real estate industry. In fact, many see 2024 as an opportunity for the market to get back on solid footing. Whether you are a property owner, investor, property manager or tenant, these changing winds can impact both your short- and long-term strategies.

As experts representing clients in a range of real estate transactions involving everything from small office leases to large, mixed-use properties, our real estate team at Buchanan is closely following the trends that have the potential to significantly impact the future of commercial real estate.

Here are the top trends we're keeping an eye on in 2024 and beyond:

1. The evolution of return to office

The single most important trend impacting commercial real estate will be the future of return-to-office plans for companies across the U.S. After several fits and starts since the peak of the COVID-19 pandemic, we're starting to see more momentum behind large companies encouraging their workforce to return to office spaces. Many of these companies are pointing to declining corporate culture, less effective training, and a lack of camaraderie as reasons to call employees back in.

In order to make the transition back to the office more attractive, proactive landlords and tenants are addressing concerns that employees may have. As physical safety has become a concern for many employees in metro areas across the country, one of the steps that forward-thinking property owners and employers are taking is to increase workplace security measures. They're doing so by engaging security companies and even working with local municipalities to elevate police presence in their area. As dense metro areas continue to make the most sense for workspaces due to their proximity to mass transit, office owners and managers will need to ensure their facilities are safe to provide peace of mind to their tenants.

2. The outperformance of high-quality offices

Employers are also seeking out higher quality, “Class A” spaces to draw employees back into the office. As employers adopt hybrid plans that only require partial attendance throughout the week, many tenants are seeking smaller, higher-quality spaces with more amenities, like on-site fitness centers, cafeterias, and outdoor workspaces, that enable tenants to upgrade their office without meaningfully increasing their overall rent. Many property owners are also making plans to upgrade their facilities to increase their draw to tenants seeking newer, higher quality offices that are more appealing to their employees.

3. The future of interest rates on CRE activity

Over the last 18 months, rising interest rates have created challenging conditions in the commercial real estate industry. As rates climbed, the number of real estate construction projects and transactions declined due to the higher borrowing costs. The projects that did get underway faced significant deficits due to the higher rates, with owners of existing properties also running into issues refinancing existing loans.

In 2024, the majority of observers expect interest rates to flatten out or even decline slightly. If this comes to fruition, the lower rates could also lead to more new construction projects as financing becomes less costly and more readily available.

4. The shifting mix of new construction projects

Considering the oversupply of traditional office spaces, new office construction is expected to remain limited in 2024. However, new construction projects are also beginning to pick up in certain parts of the market. We're beginning to see new construction and large renovation projects kick off for properties outside of office spaces, like the life sciences industry, universities and public institutions. However, the declining number of union contractors, electricians and other tradespeople may contribute to delays on projects where highly skilled labor is preferred.

5. Ongoing property conversions

The availability of excess office space post-pandemic has led to an increased interest and emphasis on converting some properties to affordable housing. While some buildings may be easier to convert than others (e.g., office buildings without an open central core for light and air and no associated parking), there is an interest in finding ways to make this work, including financial incentives being offered by some jurisdictions to help offset costs. However, given the difficulty of these conversions, property owners are seeking further government support in the form of streamlined approval processes and, depending on the area, zoning code changes.

Retail properties are also interested in undertaking a different type of transformation. Property owners with empty traditional retail spaces are seeking ways to convert areas into entertainment centers that draw people into their facilities. Tenants that provide entertainment services are being courted aggressively and offered favorable leasing terms. By securing more entertainment offerings in their shopping centers, property owners can increase foot traffic to the surrounding retail locations, thus increasing the attractiveness of their property to additional retail tenants.

6. Additional affordable housing legislation

There is a large, ongoing need for affordable housing in many areas of the U.S. As noted by the National Low Income Housing Coalition (NLIHC) in its Out of Reach 2023 report, “The U.S. currently has a shortage of 7.3 million rental homes affordable and available to extremely low-income renters.” NLIHC also cites data from the U.S. Department of Housing & Urban Development (HUD), “Between 2011 and 2022, the number of HUD-assisted renters did not significantly change, while the supply of low-cost rental units in the private market declined.” In December of 2023, HUD released Part 1 of The 2023 Annual Homelessness Assessment Report (AHAR) to Congress, which revealed a 12% increase in the number of individuals experiencing homelessness on a single night compared to 2022.

The largest production vehicle for affordable housing continues to be the federal low-income housing tax credit (LIHTC), a program that has long received bipartisan support and generally benefits households at or below 60% of area median income. Post-pandemic, these transactions are receiving the further benefit of funds provided by the 2021 American Rescue Plan Act (ARPA), and the deadline to obligate them of December 31, 2024, is now approaching. Depending on the recipient, ARPA may no longer be available, or it may be prime time to receive a commitment of unobligated ARPA funds before the obligation deadline, provided the development can meet the December 31, 2026, expenditure deadline.

On the heels of Florida's Live Local Act that contained a variety of measures to spur development of housing for the so called “missing middle,” a new Workforce Housing Tax Credit (WHTC) has been introduced by bipartisan legislators in both the House and Senate to assist a broader income range of households that cannot afford market rate rents, between 60% and 100% of area median income. As proposed, WHTC would be fairly similar to the LIHTC and focus on the segment of the workforce, such as teachers and first responders, who cannot currently afford to live in the communities in which they serve.

The Inflation Reduction Act (IRA), enacted in August 2022, offers several additional opportunities. The IRA extended and increased the new Energy Efficient Home Credit available under Internal Revenue Code §45L and added specific provisions designed to benefit developers of LIHTC developments. Updates to Internal Revenue Code §48 contained in the IRA targeted to spurring investment in underserved communities may be sufficient reason for affordable housing developers, sponsors and investors to consider investing in solar and wind facilities in connection with upcoming developments to potentially lower operating and utility costs. HUD developed the Green and Resilient Retrofit Program to implement Section 30002 of the IRA to reduce energy and water use in HUD-assisted multifamily properties, to make HUD-assisted multifamily properties more resilient to extreme weather events and natural disasters, and to reduce greenhouse gas emissions from HUD-assisted multifamily properties.

Finding solid ground

The commercial real estate industry is extremely resilient. After several years of challenging conditions, we expect 2024 to bring some semblance of balance as the market begins to normalize and become more predictable. In the meantime, property owners, investors, property managers and tenants will need to continue adjusting to this new operating reality and stay ahead of the latest trends and developments. At Buchanan, our attorneys are keeping our finger on the pulse of these changes and are here to help your business navigate this evolving landscape.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

👉 The Hoey Team 🍀 239RealEstateDeals.Com LLC ☘ serves all of Lee County and Collier County, including the Gulf Coast Islands here in Southwest Florida.  We Directly Help Sellers and We Directly Help Buyers; with our clients best interests in mind.

Recently as Listing Agents, Barry & Kim with the Hoey Team 🍀 239RealEstateDeals.Com LLC ☘ helped a number of sellers who had been in Foreberance, Pre-Foreclosure and in similar difficult situations.  We were able to get all of them to a "very good place"; worry free & stress free; with excellent end results for them.   Also, Kim is a certified stager which helps us additionally on all of our listings.  Call us for more information: 239-360-5527.

With access to many different professions on our team, we help and serve people in many different situations; everybody's situation is different even in a hot sellers market as we recently experienced.

If you know someone needing help; or simply wants advice, please have them reach out to us in confidence: 239-360-5527; anytime; we continue to achieve excellent results in the communities where we list and sell across Lee and Collier Counties utilizing our Knowledge, Experience, Systems and Tools.

Sadly for some time we see a number of sellers who are not keeping up with the changes locally; often putting their homes on the market and selling them for less than what the market can bear.  Additionlly; selling a home the first day on MLS may not guarantee the best price for the seller / homeowner.  Please call Barry at 239-360-5527 for more information.

We offer a confidential / private, custom Concierge Service, if a home owners property needs work 🍀  For every property situation, we have a solution / solutions with a proven track record ☘

Even with Hurricane Ian having passied thrugh Southwest Florida last year, as people continue to move and relocate to the general areas of Lee & Collier Counties; aka: Paradise Coast from other parts of the United States, it is important that we are able to directly serve all of the area; which we do, efficently.  We have the ability to offer many different Choices, Price-Points and Lifestyles all of which are in abundance here in SW FLA, 239RealEstateDeals.Com LLC has blanket coverage of Southwest Florida and most of Florida for that matter by being active members of four different MLS systems.  Additionally we have the latest cutting edge technologies in house with many systems in place to better serve our customers and clients who we represent.

Inventory remains steady, but is increasing overall; we do continue to list and market new South Florida property listings to the marketplace and we sell many different type homes; Resale & New Construction; Multigenerational Family Compounds, Single Family Homes, Villas, Townhomes and all Condo types, from low rise, to Waterfront high rise right on the Beach / Gulf Coast.  We have something for everyome from beach lovers, boaters, golfers, nature lovers to farmers and horse lovers.

We continue to see many people planning ahead, and buying that second home now, rather than waitiang as they were planning to do; especially with Snowmads and Zoombirds working from home.  Previously we had Snowbirds; interesting how terminology keeps changing / evolving.  Hurricane Ian prompted some buyers to start looking again, while other buyers had pulled back momentarily.

Interest rates increases have sadly driven some buyers out of the market place, we do see price reductions on some overpriced and / or under marketed listings.  Even with recent interest rate hikes, buyers are still looking, but showing more prudency than before as we Secure Real Estate Deals for them.  Properties are still selling as it trends towards a more balanced market.

Relatively low inventory overall is still a challenge for active buyers who are not prepared on some property types; but if prepared you are ahead of the game; ask how we can help with all of that.  We do see more listings coming to the market here in Southwest Florida, so, that is good.

We recently got a number amazing deals for buyers; even during the recent Hot Sellers Market; and we are working on others as our market changes a little having gone through a hurricane.  There are deals out there; if you work with us, we will definitely find them for you. 

For those relocating to Florida (and to other areas), we are pleased to be able to efficently assist homeowners in other parts of the United States who need to sell to buy here; please reach out today for more information and how you can have a smooth, non-stressful transition / relocation with the best available representation.  Call Barry at 239-360-5527.

At our Real Estate Team; Hoey Team 🍀 239RealEstateDeals.Com LLC ☘ we have been succesfully working 100% virtually / remotely for the past number of years; i'm thankful that we already had systems in place to better help sellers and buyer with goal posts continually moving within our industry / profession.

Article content from FR (Florida REALTORS) Newsletter Magazine, and from other sources including Hoey Team, 239RealEstateDeals.Com LLC & Freddie Mac / Fannie Mae - Make sure to ask us for more information on how it may effect you; Call Barry at 239-360-5527 ☘

Click Here to Find Your Estimated Home's Value, Instantly    

For those Living in or Visiting Southwest Florida wanting additional resources, or a list of places to see / visit:   www.SWFL-Events.Com      Feel free to share this resource page with others  🌴

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For more Real Estate related information, or if you have questions on any aspect of Buying, Selling, Upsizing, Downsizing, Moving within or Relocating to or from Florida (the number one state for people to move to), or on any aspect of the Real Estate Market, Locally, Nationally or Internationally, please let us know, we can help, we can address / answer your questions, and we are always available to help you or someone you know..  Much of our business is based on referrals from past customers, friends, and Realtors.

P.S. --> If You'd like for us to create a Video Tour for ANY of the Properties on our website, just CLICK "Video Request Button"; from property details https://HoeyTeam.239RealEstateDeals.Com

CLICK HERE to Visit our High Definition Virtual 3D Open House Tours Page 24/7

Click Here for our most recent Market update Report for Southwest Florida and beyond.

We do not discriminate on price, we help homeowners and renters in all price ranges; Click Here for more information on the Hoey Team ☘ and what we do to help or visit www.239RealEstateDeals.Com anytime.

Click Here for our informational Southwest Florida Website ☘

Barry is a CLHMS; Click Here to see how we help with higher end properties.

Please visit our Hoey Team ☘ Luxury Home Market Page including Luxury Home market Reports for Naples, Marco Island and for Lee County by Clicking Here

Best Places to Retire? 13 of the ‘Top 25’ Are in Fla  Hoey Team; 239RealEstateDeals.Com LLC 🌴 Southwest Florida 🌴

Barry has earned the Military Relocation Professional Certification, Please Share or Visit Here to see how we can better Help Veterans and Active Duty Servicemen and Servicewomen  Hoey Team; 239RealEstateDeals.Com LLC 🌴 Serving Southwest Florida 🌴

Also; please check out the other blogs, and tabs to many other Links, Updates, Reports & Stats that we have here on our informational website.  

We hope that you find our Resources and Information useful. Feel free to share.  If you have any questions, please do not hesitate to contact Barry or Kim with the Hoey Team  239RealEstateDeals.Com LLC

Email us at Barry@SWFLLuxury.Com  or KimZuponcic@Gmail.com or Call or Text Barry ☘ at:  (239)-360-5527 

“Please Share this blog and our informational website with anyone who you think the info will help. 

Please refer any family or friends; it is the greatest compliment that you can give to us; we really appreciate referrals from Past Customers, Friends and Fellow REALTORS, who we help in any way we can.

🌐  www.HurricaneHelpFL.com  🌀  Post Hurricane Resources and Tools Library 🛠 Barry Hoey, Broker Owner 🍀 239RealEstateDeals.Com LLC ☘ Serving Lee and Collier Counties, Southwest Florida 🌴

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Barry & Kim, Hoey Team 🍀 239RealEstateDeals.Com LLC ☘

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