We’re almost two years into the COVID-19 pandemic, and industries are still feeling the reeling effects. The commercial real estate (CRE) industry is no exception. The course has changed for many industries with a transformed landscape leading to 2021 commercial real estate trends that will carry on well into 2022.

As experts in the commercial real estate industry, Lavoro Consulting has kept a watchful eye on trends that affect our clients’ CRE plans, from engineering firms to property managers. As such, we've compiled a list of the most important trends we anticipate effecting commercial real estate beyond the next year.

6 Top 2022 Commercial Real Estate Trends & Predictions

1. Office Space and Remote Workers

The in-office workforce is shrinking and adapting to a new norm. The pandemic isn't over and companies are still making post-pandemic decisions about their employees' workspaces. With remote and flexible work still an upward trend, many businesses with office space find themselves contemplating a lease renewal for a space that is now too large for their transformed workforce.

That’s why many office tenants are planning on negotiating with their landlords for smaller units upon their lease renewals. With approximately 30% of Americans working remotely, many more companies are going to have to rethink the nature of their employee workspaces and downsize their physical business locations.

2. Vacancy

As mentioned above, office attendance has been declining for the past decade, paving the way for remote work. However, the COVID-19 pandemic has blown this trend out of the water. In fact, the National Association of Realtors (NAR) found the total loss in office occupancy to be 133 million square feet since 2020 Q2. Office attendance is now at a steep decline with employers and employees alike supporting working remotely in a location of the employees' choice.

This offers flexibility to workers and cost savings for employers on things like rent, furniture, and office supplies. With a large portion of the workforce transitioning to remote or hybrid work and employers downsizing their rental space requirements, we're seeing significant office vacancies from now into the foreseeable future.

3. Industrial Space & Warehousing

Industrial spaces and manufacturing warehouses are the property types that saw the biggest growth in 2021. This was due to the fact that these types of spaces were able to adapt quickly to the changing needs of businesses during this recent crisis. While some of these spaces may not see as much growth in the future, they will continue to serve as a valuable asset for CRE owners who can capitalize on them.

4. Mixed-Use Properties

A trend that is growing, and will continue to grow down the line, is the value of mixed-use properties. With convenience high on the list of many communities and urban developments, properties with two or more uses are seeing massive growth in the commercial real estate sector. All-in-one vertical properties mixing residences, co-working spaces, and lifestyle enhancement are in demand by millennials and baby boomers alike. A mixed-use development tends to be more sustainable as well, which is a top emerging focus for commercial real estate investors.

5. More Investment Competition

Investors and private buyers alike are taking advantage of lower interest rates. With a scarcity of residential properties, especially in urban developments, high net-worth investors are buying up commercial properties. With such a high demand and dwindling supply, the competition for CRE opportunities is high. The window is closing to take advantage of current interest rates and remaining investment properties.

6. Restaurant and Retail Spaces Will Suffer

Restaurants and retail in urban and rural areas have already taken a massive hit over the past two years, due to the pandemic. Areas that typically saw a lot of office workers and commercial buildings, like downtown areas and office complexes, are going to continue to see a lot of retail and restaurant closures and downsizing. With fewer employees being housed in large office spaces and more people working remotely, there are fewer people visiting shops and restaurants in urban metro areas. This will continue to contribute to more building vacancies in metropolitan areas compared to the suburbs where you’re starting to see restaurants starting to recover.

What Do These 2022 Commercial Real Estate Trends Mean For You?

Although the landscape has shifted across the commercial real estate sector, there is and will continue to be a growing demand for commercial investments. However, your investment choices and the way you manage your portfolios will look a lot different than before the global pandemic. In light of these events, investors should take note of these trends and ensure they account for them when making investment decisions.

At Lavoro Consulting, we can not only help you understand the current market conditions, but we can use them to your benefit. If you're thinking about investing in real estate, we'd be happy to help! Contact us for a free initial consultation.

And if you’re looking to restructure your current office space and lease to suit your evolving business needs, then you may want to talk to our experienced tenant rep and office fit-out specialists.

If you're an industrial company that leases space or is looking to lease space in the United States, you would likely benefit from industrial tenant representation. We understand that your bottom line is one of your top priorities. That’s why it's important to align your commercial real estate transactions with your business strategy, financial goals and operational objectives as a tenant.

What is an industrial tenant rep?

Industrial tenant reps advise warehouse, distribution and manufacturing tenants in their search for suitable business locations, as well as current tenants considering a lease renewal, an expansion, or a move to a new location. They identify the best options and serve as an aggressive advocate for their clients, negotiating the best possible terms and conditions with property owners and landlords.

What can an industrial tenant representative help me with?

A tenant representation consultant helps facilitate the leasing transaction between a tenant and a landlord. Rather than going through the leasing process alone, a company can hire a broker to represent them throughout the entire process. Whether you lease and occupy a single location or a global portfolio of properties, an industrial tenant rep can help you with:

• Site Selection
• Commercial Market Research
• Negotiation and closing
• Handle complex transactional and management details
• Strategic Planning
• Financial Analysis
• Lease Negotiation and Administration
• Competitive Analysis

What To Consider With Industrial Tenant Representation Services

There is a lot more involved in industrial tenant representation than just managing your lease and helping you find a location. A good industrial tenant rep will have experience in industrial real estate working on large-scale projects.

You'll also want to find a tenant rep who has worked extensively within the industry, understands how to effectively communicate with property managers and brokers, knows what types of deals are most likely to be successful, and possesses strong analytical skills.

Expert industrial tenant reps, like our crew at Lavoro Consulting, have strong experience working with companies in all aspects of the industrial sector including:

• Warehousing
• Logistics
• Distribution centers
• Manufacturing facilities
• Food processing plants
• Oil refineries, chemical plants
• Power generation stations
• Steel mills
• Pulp & paper operations
• Mining
• Water treatment
• Pharmaceuticals,
• Automotive assembly lines
• Aerospace/defense industries
• And more...

How do I know if my company qualifies for industrial tenant representation?

To qualify for industrial tenant representation, companies must meet certain criteria. The first step is determining whether your business falls into one of the category types listed above or a similar company in the industrial market.

A good example of a company that qualifies for industrial representation is one that operates warehouses or distributes goods across multiple states or needs assistance finding appropriate sites in one or more states. These businesses typically require a specific amount of available space and/or several, if not hundreds of acres of land.

How else do tenant reps help industrial businesses with their space needs?

Let's face it. You're busy managing the objectives and operations of your business. Have you even had time to consider the ins and outs of your site locations and commercial leases? Your industrial tenant rep will focus on those things that you may not always have time or expertise to think about. These may include pressing items like:

• Vacancy rates and absorption trends in the regional market
• New warehouse, distribution, or manufacturing construction in the regional market
• Highway, rail, and truck access to and from the site
• Drive time to ports, airports, and major roadways
• Suitability for tenant needs, such as ceiling heights and loading dock configurations
• Environmental issues associated with the facility and site
• Power, water, and other utilities, including service capacity
• Current and projected tenant occupancy costs
• Trends in leasing rates, landlord concessions, and other financial issues
• Potential building renovations and future capital projects
• Space analysis and future planning
• Creative solutions for excess space
• Enhanced negotiating strategies

How does industrial tenant representation work?

Lavoro's commercial tenant representation services for industry include more than simply locating an available space for your facility. Our advisors will partner with you to identify and align your strategic business, financial, and operational goals to create an integrated supply chain and real estate strategy – one that sets you up for what's next to exceed your business objectives.

Whether we are providing relocation, renewal, consolidation, or sublease services, our team of advisors begins by identifying your long-term strategic goals. Then we apply our research, experience, and analysis skills to ensure you make the right decision for your company.

What types of industrial companies benefit from tenant representation?

Our client base includes manufacturers, distributors, retailers, service providers, and other industries who need assistance finding quality office, retail, or warehousing facilities. We also assist businesses moving into new markets where they may be unfamiliar with local market dynamics.

What should you look for in industrial tenant representation?

Expertise and experience in industrial commercial real estate and lease administration should be a top priority during your search. Leasing the right facility in a strategic location is critical for industrial tenants. A good tenant rep will be able to identify locations that are best suited for your industry and provide guidance on how to maximize your space utilization. They also have extensive knowledge about all aspects of the property including building amenities, common areas, parking availability, utilities, and more.

Work With an Experienced Industrial Tenant Rep in North America

At Lavoro Consulting, we have helped companies like yours find great commercial property opportunities across North America for over 20 years. We are dedicated to helping you succeed by providing high-quality tenant rep services at competitive rates. Our team has extensive experience representing customers in all aspects of commercial real estate. Some of these aspects include: site selection, negotiation, financing, acquisition, disposition, construction administration, facility operations and maintenance, asset management, strategic planning, and more.

If you’re interested in learning how Lavoro can assist your company, contact us for a consultation with one of our expert CRE consultants today!

If you're making real estate decisions for your company without leveraging strategic real estate consulting services, you may be losing your company thousands upon thousands of dollars. The choices and approaches you make with your corporate real estate strategy can have lasting impacts on your bottom line and your company culture. If you make the wrong CRE decisions, they can have lasting financial repercussions for your company.

A strategic real estate consultant can help mitigate these risks and guide you with a multi-faceted strategy through the complex and ever-evolving landscape of corporate real estate.

What is strategic real estate consulting?

Strategic real estate consulting is a corporate real estate service provided to small and mid-size companies. Those companies will often have limited portfolios and infrequent, one-off projects, which means dedicated real estate staff is often out of budget. So these CRE tasks typically fall on the plates of departments that don’t have the bandwidth to deal with it every few years. That’s where strategic real estate services come in!

The best real estate consultants, like our team at Lavoro Consulting, have extensive experience in interior design, space management, and corporate real estate services. CRE consultants function as an extension of your staff to provide consistency, efficiency, and dedicated attention to your real estate, facilities, and leases.

Let's take a look at 5 ways strategic real estate consulting ensures every property you lease, buy, or sell meets the long-term financial and operational goals of your business.

Better Outcomes With Stakeholder Collaboration

When people participate in decision-making or planning that is going to affect their work, they’re going to feel a higher degree of ownership and commitment to that work. Involving stakeholders in your corporate real estate plan almost always generates better outcomes.

For instance, at Lavoro, we work with every stakeholder on a project to involve them in the strategic planning process so that your organization is unified in your desired outcome. We’ll bring all parties to the table and lead discussions about any changing or future needs for your business. This helps ensure that every party is on the same page with a shared vision. And it ultimately helps create a more cohesive environment within your organization.

Portfolio Strategy and Management for Multiple Office Locations

Managing offices across diverse geographical areas can be challenging, even for experienced professionals. The ability to create cost and operational synergies across your company’s portfolio often requires strategic real estate consulting services and CRE expertise that you may not be able to house internally. That’s where CRE consultants come in.

At Lavoro, our goal is to put your properties in the best financial position. We offer strategic, pragmatic solutions so you can feel confident in every real estate transaction you make. Our experts understand the unique challenges faced by businesses that operate in multiple locations. As such, we know how to leverage your real estate transactions and portfolio strategy to streamline operations while maintaining high levels of customer and employee satisfaction.

Mitigate Risks for Potential Commercial Real Estate Investments

As part of our strategic real estate services, we’ll conduct a number of scenario analyses so that you can accurately measure risk when evaluating a potential commercial real estate investment. We’ll consider all kinds of scenarios from worst-case to best-case, so you can make data-driven decisions for your business.

Our CRE analysis includes:

• A review of market conditions
• An assessment of current operations and costs associated with operating multiple locations
• Identification of opportunities to improve efficiencies through consolidation or relocation
• Analysis of capital requirements necessary to fund improvements
• Evaluation of alternative financing options such as debt vs. equity
• And an assessment of risks related to location selection, tenant mix, competition, and more.

Accurately Identify, Plan, and Manage Space Needs

Commercial leases are almost always long-term leases. This can make it difficult to align your organizational needs with your lease. Before your CRE consultants even start the search for your next commercial space and help with the lease administration, they’ll help you accurately identify your company’s space needs.

This means you’ll be asked questions like:

• What type of space do you need?
• How much square footage does your organization take up now?
• Where would you ideally want to locate?
• Do you have enough room for growth?
• Are you looking at an expansion opportunity? If so, which spaces should you target first?

These types of questions will help your CRE specialists identify, plan, and manage your company’s space needs.

Optimize and Repurpose Current Office Space with a Restack

When a company’s lease is almost up, leadership must answer a tricky question: “Should we re-sign and stay or should we move to a new space?”

If you like where you currently are, but your office needs a facelift, then an office restack is always a great way to revitalize your space. At Lavoro, we can assist with all aspects of your office restack so your team experiences minimal disruption and a smooth transition, all while getting the most out of every square foot of your space.

We’ve helped companies reposition their existing space by consolidating several small offices into one larger space, creating more efficient workflows, improving employee morale, and reducing overall overhead expenses. Our experience working with clients on this type of project has given us insight into how to maximize efficiency and minimize downtime.

There's no doubt that investing in commercial real estate requires careful planning and execution. You may want access to experienced corporate real estate professionals when considering buying a property outright or leasing from another party. Our CREs can provide guidance throughout the process to ensure better success.

At Lavoro, we believe that successful investments require thoughtful consideration of both short-and long-term goals. By combining deep industry knowledge with extensive hands-on experience, we'll help you navigate each step of the journey toward achieving those goals without bleeding money.

Learn More About Our Strategic Real Estate Services

If your business or organization needs assistance creating a successful strategic real estate plan, reach out to us today at Lavoro Consulting. We are here to function as an extension of your team and ensure your real estate decisions positively impact your bottom line and contribute to the overall success of your business.

We have extensive experience in both public and private-sector work in the corporate, retail, hospitality, and transportation sectors. We’ve worked with clients nationally and globally to provide workplace and portfolio services that make your spaces work for you.

Schedule a consultation today to learn more.

Unlike leases for residential properties, commercial leases are expected to go through multiple rounds of negotiation. The initial lease that is provided to you is essentially a rough draft. Your potential landlord or property owner is anticipating that you will request changes to the proposed lease. Here’s how to negotiate a commercial lease to ensure you get the best possible outcome for your organization.

Whether your business is moving a few blocks away or all the way across town, relocating your office is stressful. Operations are disrupted, things don’t always go as planned, and it can be difficult to stay under budget. And without proper preparation, your office move can quickly become a huge headache for both you and your team. However, when implemented correctly, office relocations have been shown to positively impact nearly 70% of employees. The best way to make your move more manageable and stress-free for you and your team is by creating an office relocation action plan.

Navigating the complexities of commercial real estate can be overwhelming. You can make the process more manageable by working with an experienced commercial real estate broker. With a CRE expert on your side, they’ll help ensure you make informed and strategic decisions when buying, selling, or leasing commercial properties. Here at Lavoro Consulting, we partner with some of the top brokers in the business to ensure you’re getting the best bang for your buck.

Depending on the size and scope of your business, you could operate in a few office spaces or dozens of locations. While it might be possible for someone on your internal team to manage a few properties, any more than that and it will interfere with their ability to complete day-to-day tasks. Managing a geographically diverse real estate portfolio requires an in-depth understanding of the complexities and nuances of each individual property. This can be challenging for even the most experienced real estate professionals. And often, many companies cannot house a team that's well-equipped to effectively manage all of their real estate holdings. Luckily, commercial real estate outsourcing is becoming more and more accessible.

In today's fast-paced and ever-evolving world, businesses need to be able to quickly adapt to new norms, challenges, opportunities, and obstacles. Just take the COVID-19 pandemic for example. No one could have predicted that the world would have to go into a nearly year-long lockdown. But still, businesses needed to learn how to adapt if they wanted to stay afloat. With more and more companies extending remote work opportunities post-COVID-19, real estate needs are changing for many businesses. And although it might be possible for your team to manage a few properties, any more than that can become overwhelming and impact their ability to carry out their primary responsibilities. At Lavoro Consulting, we offer all of the benefits of an in-house real estate team with the added flexibility of an outsourced commercial real estate consulting service.

Navigating the world of commercial real estate can be complex. Whether you’re interested in leasing new office space or buying industrial warehouses, having an experienced commercial real estate consultant on your side can save you a significant amount of time and money. If you’ve started your search for a new space, you already know how time-consuming it can be. However, with a limited portfolio and infrequent projects, having a dedicated real estate professional on-staff is probably out of your budget. That’s where commercial real estate consulting comes in.