Commercial real estate breezes through first half of 2022

Despite the promise of more interest rate hikes in the coming months, commercial real estate has performed well in 2022. JPMorgan Chase has released a midyear review on the industry and concluded that it is entering the second half of the year with an overall positive outlook.

Strip malls in densely populated residential areas are doing well, largely due to grocery stores, fast-casual restaurants, and other retailers offering in-person services. JPMorgan observed that walk-in MRIs, testing clinics, and other non-traditional tenants may fill more shopping centers as retail evolves and adapts.

The industrial boom brought on by e-commerce and online deliveries likewise shows no sign of stopping. “[If] more goods continue to be ordered online and industries such as life sciences emerge, demand for industrial space will likely remain robust,” said Victor Canalog of Moody’s Analytics. JPMorgan predicted that industrial spaces would evolve to integrate amenities normally reserved for the office, such as gyms and mothers’ rooms. Similarly, office properties could also evolve to accommodate emerging hybrid work schedules and entice workers on-site with better amenities.