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A new year means you have 365 days of opportunity ahead of you! As a commercial real estate investor, it’s important to stay on top of the latest trends, so you can take advantage of all the opportunities that are about to come your way.
Life changed drastically in 2020 and we all spent 2021 recovering and adapting to that “new normal” everyone spoke so much about. We will definitely feel the effects of these last two years in 2022, but trends predict that we’re going to be inching toward our “old normal” again.
Understanding the top Mississippi commercial real estate trends will help you make the best decisions so you can invest your time and money well and see the biggest return on your investment.
Top MS Commercial Real Estate Trends
1) Low Interest Rates
As recent as September 2021, the Federal Reserve predicted that interest rates will stay near zero throughout 2022 and for the rest of the foreseeable future. Unfortunately, the same can’t be said for mortgage rates because commercial real estate is selling for more than the asking price, in many cases, but it still means overall financial savings.
Lower interest rates mean more people will be able to take out investment loans, which typically have higher rates than other types of loans. With more people able to secure an investment loan, we may see a boom in the commercial real estate industry – especially for first-time investors.
2) Changes in Retail Properties
We’ve seen drastic changes in retail real estate these past two years. Many brick-and-mortar stores shut their doors during the pandemic and transitioned to operate fully online. In 2022, we are going to see the effects of that massive shift:
The recent surge in eCommerce has affected retailers, wholesalers, and third-party logistics companies. These players are now expected to keep up with low prices, fast shipping, and personalized customer service the way companies like Amazon have.
As a result, projects that involve converting retail space to industrial space will accelerate in 2022. In addition, there will be a large demand for warehouses that can house inventory for eCommerce stores.
- Stockroom priority
Now that there are more online retailers than ever, the need for local warehouses is increasing. Not only will small, local businesses need a place to store and manufacture their products, but international companies are also opening warehouses in other countries to fulfill orders faster. Plus, Amazon warehouses are popping up all over the country (including Mississippi) to offer same-day shipping.
This gives real estate investors a chance to jump on the trend early, secure a few warehouses, and rent them out at competitive prices.
3) Office Versatility
When the pandemic forced people to transition out of their offices and into their homes, we saw 2021 call for an increase in flex spaces – rooms that could double as a home office, hobby room, etc.
Now that vaccines have become widely available, and required by certain employers, we see that workers are starting to head back to the office. However, many companies are adopting a hybrid system while others only have necessary personnel in the office.
As a result, many companies throughout Mississippi and the rest of the country have different office requirements. Companies that once rented out entire floors are only going to need a few rooms. Those who previously occupied entire buildings will only need a floor or two. Massive call centers will be transformed into collaboration centers.
In addition, companies will be looking for office space with versatility and touchless technology. Versatile spaces will allow organizations to customize their new office environment to be more conducive to their needs. This might look like extra space for a comfortable lounge area, a secure room with cameras for a daycare center, a room made specifically for video conferencing, doors that open automatically, and upgraded bathroom sinks and toilets.
4) More Renters
In 2021, we saw renters all over the country wrap up their leases and move in with their families. Now, they are getting ready to hunt for apartments again.
Remote work has made living arrangements more flexible for renters than ever. Now that many people are working from home, they have the freedom to move wherever they please. In addition, more job opportunities mean that renters can increase their salary and say goodbye to the roommate lifestyle.
Investing in rental properties will only become more lucrative in 2022. However, it must be done right. With more time spent at home, renters are not going to put up with spotty internet, outdated fixtures, or absent landlords and property managers that don’t return calls promptly.
Instead, renters are going to be looking for apartments that implement upgraded technology, including high-speed Wi-Fi capabilities, office space, touchless technology, improved indoor air quality, and attentive personnel that can remedy issues as they arise.
5) More Suburban Dwellers
When the pandemic hit major cities like New York and Los Angeles, we saw people move to the suburbs in droves. Not only was it safer in the suburbs where there are fewer people, but it’s more affordable. Plus, workers didn’t have to commute to their office buildings anymore, so they could move out of the city and keep their jobs.
In 2022, buyers and renters are going to be more interested in living in small towns just outside of metropolitan areas. This will allow them to commute to work if and when they must and have a comfortable place to call home, away from the chaos of the big city.
This could have an interesting effect on urban housing prices, however. With people at the typical home-buying age (Millennials) moving to suburban areas, this could drive the real estate cost down in big cities.
Taking Advantage of Mississippi Commercial Real Estate Trends
If you are interested in taking advantage of Mississippi Commercial Real Estate trends, it’s best to start planning now. The sooner you have your investment plan laid out with a budget and timeline, the sooner you can secure your next piece of property.
The above trends depict a strong demand for suburban housing, eCommerce inventory storage, flexible office spaces, and upgraded rental accommodations. With this information, we can predict that some of the most profitable commercial real estate in Mississippi in 2022 will be:
- Industrial spaces
- Data centers
- Multi-family apartment complexes in the suburbs
Getting a head start on your 2022 commercial real estate investment plan will position you to make the smartest choices with your money.
When you need help developing your investment plan, the advisors at Speed Commercial Real Estate will be right by your side.
Commercial Real Estate Investing with Speed
Speed Commercial Real Estate is a top real estate firm in Mississippi. In addition to buying, selling, and managing properties, we offer consulting services to help you make the best investment decisions. Contact us today to get a jump start on your plans for 2022.