Inflation is the risk factor investors are watching the most closely this year—but each property type has unique nuances in terms of how it interacts with inflation.

That's according to John Chang, senior vice president and director of research services at Marcus & Millichap. He says office properties have general inflation resistance because their values tend to align with replacement costs and they mark to market upon tenant turnover. Some properties may also have inflation escalators built into lease agreements.  On a scale of 1 to 10, with one meaning little to no inflationary risk, Chang ranks the office sector risk at a three to a five. 

Multi-tenant retail falls in the same category, he says, thanks to long-term lease agreements that could have escalators tied to sales. Single-tenant properties typically don't have such escalators, but the risk depends on the tenant he says; Chang ranks them in the three to five range as well.