Joe Fairless is the founder of the Daily Real Estate Podcast and co-founder of Ashcroft Capital, which controls nearly $2 billion in real estate. He offers insight into the best United States commercial real estate markets in 2022, as well as a, peek into some of the challenges investors face in purchasing commercial real estate.
Fairless explains that the commercial real estate market has been plagued by uncertainties that haven’t affected the residential real estate market. The COVID-19 lockdowns forced companies throughout the nation to adopt a remote work model. Many experts didn’t expect the trend to last as long as it has; others rightly noted that the vaccine alone won’t bring workers back as many prefer the comfort and convenience of working from home to commuting to and from the office. While there are more remote workers now than before the pandemic, a growing number of employees are heading back to the office and the price of real estate for offices is reflecting this trend.
Warehouses are yet another valuable investment, as companies from a range of industries search for large industrial venues to use as fulfillment centers. Demand is high and supply is at a record low. Hospitals are also a great investment but Joe Fairless explains that there are risks involved in purchasing hospitality-related real estate, as the industry struggles to bounce back from the devastating global pandemic. Even so, he notes, investors who are willing to take a few chances may want to consider distressed hospitality real estate options in cities that are likely to recoup a lot of tourist traffic in the near future.
At the same time, commercial real estate investors will need to choose not only the right investment options but also the right locations. Joe Fairless notes that while there are some great markets in the North, many of the best real estate venues for purchasing commercial office real estate are in the southern United States. Austin and Dallas-Fort Worth in Texas and Tampa Bay and Miami in Florida, are some of the best options. Other great locations include Atlanta, Georgia; Phoenix, Arizona; and Raleigh-Durham in North Carolina. Those interested in the hospitality industry will want to consider top tourist destinations such as Orlando, Florida; Napa Valley, California; New York City; Chicago, Illinois, and Las Vegas, Nevada.
Finally, Joe Fairless encourages investors to get in on the market now. Rising inflation has led to a boom in the real estate market, and it doesn’t appear prices will go down in the immediate future. What’s more, low-interest rates make it possible for investors to acquire additional financing that would have been unavailable in times past. Inventory is low, which means there aren’t unlimited options on the market. While caution is in order to ensure the venue in question has the potential to be profitable long-term, Fairless encourages investors to take the plunge and invest money in a commodity that is set to rise in value rather than holding onto cash that could lose value due to ongoing inflation.