Projected Commercial Real Estate Trends for 2018

Despite fears of a looming office market bubble and general urban migration, the commercial real estate outlook is bright moving into the new year. Q4 momentum will likely carry over to Q1, with the exception of multifamily and industrial submarkets which may see a slight decline of 5-10%. The National Association of Realtors attributes this potential slow down to “a mismatch between the worldviews of buyers and sellers.”

However, industry experts seem to agree that “growth trends and an economic tailwind suggest an expansion of the current cycle, amid larger structural shifts in real estate.” After conducting research through top data resources, Belvoir has curated the following projected commercial real estate trends for 2018:

  • Work Space Revolution — Developers and commercial property owners must maximize efficiency and productivity of space. Expect more modern mixed workspaces with innovative design, technology interface options and energy-efficient solutions.
  • Gen Z Settles In – As they graduate college and enter the workforce, Generation Z will have a decided impact on the multifamily, retail and office sectors. Saddled with debt and leaning towards an urban lifestyle, their tech-saturated way of life will influence employers’ office design and landlords’ marketing techniques.
  • Second Cities on the Rise – Primary markets in the largest U.S. cities will see decline, while secondary markets will surge. Experts attribute this to shifting economic centers and investors’ draw to up-and-coming urban centers. The Urban Land Institute ranks Houston as 60th for U.S. cities with overall real estate prospects in 2018. Sister cities Austin and San Antonio rank 2nd and 18th respectively.

Belvoir is excited about the coming year and looks forward to going places with our clients in 2018! For more Houston market insights, subscribe to The Belvoir Viewpoint monthly eNewsletter. Subscribe »

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