According to a recent press release from NAR, the National Association of Realtors, their “Chief Economist” who could be known as their “Chief Optimist”, Lawrence Yun says the commercial real estate industry in the United States is going to continue to grow – despite rising interest rates and economic challenges here and abroad.

While there have been concerns about the U.S. economy floundering, it looks like commercial real estate is going to be just fine – at least according to Yun. He says that investment in commercial properties will continue to grow and rents are likely to rise as well. His positivity is being echoed by many other experts in the field who are choosing to ignore the rising cost of capital and the potential of more rioting (aka ‘peaceful protests’), as well as the high possibility of another round of the Covid pandemic around the upcoming 2022 midterm elections.

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One of the main reasons cited for this growth is the low availability of properties for sale. The combination of strong demand and low supply is leading to increased prices and, as a result, healthy profits for those commercial real estate investors who are already in the market. While office space demand is still in a lull, industrial spaces like Amazon distribution centers are killing it. Suprisingly, retail has seen a lot of success as well and this is expected to continue.

So, it’s safe to say that while there are some possible downsides to the commercial real estate market, with experts like Yun seeing positive things ahead for the industry, we can expect growth and potential profits for investors in the near future. Whether you’re looking at it from the Polyanna-ish glasses of the National Association of Realtors, or the more realistic views of a savvy investor, now may be a very good time to keep your cards close to your vest.

If you’re thinking about getting into the commercial real estate game – or the residential market for that matter, you’d be best served by making sure that you don’t invest more than you can afford to lose in a greatly overvalued market – which it is in many areas of the US. With the cost of capital (interest rates) rising, along with the staggering inflation due to the Biden economy, the only sure bet is that values can no way continue to rise.

So, if you’re looking to get into commercial real estate investing, now may be the perfect time – just make sure that you do your research, understand all of the risks involved and never invest more than you can afford to lose. But one thing’s for certain – with hired “experts” like Yun seeing positive things ahead, it looks like there are plenty of fake news reports to watch out for.

Here’s the complete release from NAR:

Commercial Real Estate Market Expected to Grow Despite Rising Interest Rates

NATIONAL HARBOR, MD (May 4, 2022) – While rising interest rates are posing a risk to economic growth, NAR Chief Economist Lawrence Yun expects the commercial market to perform well despite the headwinds, especially in the short term.

During the 2022 REALTORS® Legislative Meetings’ Commercial Economic Issues and Trends Forum, Yun explained that while the commercial market generally follows the overall economy, some things are different this time. 

“Outside of the office sector, which is lagging behind as employers allow increased remote work flexibility to keep and attract talent, commercial real estate continues to strengthen,” Yun said. “The industrial sector is booming, retail is turning positive, the hotel industry is recovering, apartments are doing very well, and rents are rising in all commercial sectors.”

Yun added that the residential housing shortage will result in solid rent growth over the next two years, with apartment rents expected to keep rising by more than 10%.

When compared to the challenged office sector, Yun noted that the industrial property market is getting a second wind from the shift to “just-in-case” inventory buildup as wholesale inventories boom. 

“With strong demand, industrial rents are likely to keep rising solidly in the next two years while vacancy rates will remain below 5%.”

Though the office sector continues to face challenges, Yun asserted that not all markets are equal.

“While the overall office market is wobbly, some variance exists depending on location. We’ve seen improvement in some midsize markets as companies seek more affordable office locations away from major U.S. cities.”

The volume of multifamily investment in 2021 was the greatest year for any asset class in history, with $352 billion of investments, according to Matt Vance, senior director, CBRE. 

“Global economic uncertainty, persistent inflation and rising interest rates have increased the cost of capital and overall capital market volatility,” Vance said. “These conditions have restricted loan proceeds, which has negatively affected asset pricing.”

Vance expects that with the rise in hybrid-working models, employees will spend an additional day or more working remotely when compared to pre-pandemic trends. 

“An average work week with 3.5 days spent working in the office would net a 9% reduction in office demand, but that’s if it could happen overnight,” he said. “Future economic growth and job creation will have a balancing effect on the impact of virtual work.”

Yun urged commercial investors to consider land development as an investment opportunity given the scarcity of developed residential lots that are essential to addressing the housing supply shortage. He made an appeal to local governments to ease land zoning regulations and ordinances, which Realtors reported have become more burdensome.

The National Association of Realtors is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

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Information about NAR is available at

Much of this article was written with the help of artificial intelligence. Jasper was former known as Jarvis.

By Zen Chi

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