CRE Investor Interest Surpasses 2019 Levels

With uncertainty with Covid-19 variants, increased inflation, supply chain disturbances still plentiful, and the Fed accelerating bond purchase tapering and expecting three interest rate hikes in 2022, commercial real estate investment is in happy shape.

According to analysis from CBRE, investor inquiries through the first week of December 2021 were higher than the total seen in all of 2019.

It’s been the second half of the year that did the trick. Inquiries from July 1 through December were up 40% over the same period in 2020 and 14% compared to 2019.

Things are looking better in some of the hardest hit subsectors. Retail was a little ahead of 2019 and up 87% over 2020. There were also year-over-year increases in office and hotels. Unfortunately, the two were still sharply behind 2019, respectively by 20% and 5%. 

Office is expected to see the first positive nationwide net space absorption for the first time since the first quarter of 2020. Retail is using space more efficiently for higher sales per sq. ft., largely due to rising retail sales and restrained construction of new sales spaces.

The hot sectors of industrial and multifamily rose by 48% and 31% over 2019 levels.

Properties in most categories were on the market a shorter percentage of time than in 2020. The one counterexample was retail, where properties stayed on the market about 3% longer than last year.

Industrial was the only type where properties, on average, stayed on the market 10% less than they did in 2025. CBRE expects another “banner year.” And multifamily could break records in 2022.

Even with the uncertainty, CBRE projects heavy investment activity next year, with investment volume up between 5% and 10% over 2021.

There are multiple factors that could dampen spirits, like the Fed asset purchase phase-out and expected increases in interest rates. But inflation frequently pushes investors to look at hedging and commercial real estate is one of the choices and more foreign capital is expected to focus on U.S. assets. CBRE is projecting the economy to grow at 4.6% next year. And even an increase in current interest rates will leave the cost of money historically low.