The commercial real estate market is roaring back. U.S. commercial real estate investment volume in 2021 totaled a record high of $746 billion, a newly released CBRE report shows. That marks an 86% increase over the previous year.
In context, however, that is a comparison to when the COVID-19 pandemic struck the U.S. in 2020 and sparked significant declines across the commercial sector.
But 2021 marked the commercial industry’s comeback. Multifamily led all sectors for investment volume in the fourth quarter as well as for the year. It saw $136 billion in the fourth quarter and $315 billion for the year, according to CBRE. The industrial real estate sector came in second for the most commercial investments, up 55% year over year and reporting $64 billion in the fourth quarter alone.
Sun Belt markets showed some of the strongest annual growth rates, led by Las Vegas (232%), Houston (191%), and South Florida (179%). However, Los Angeles and New York continued to have the overall highest level of commercial investments in 2021, CBRE’s report shows.
Real estate investment has long been investors’ favored way to combat inflation, CBRE’s Todd Tydlaska told the Commercial Observer. “It’s a defensive move to go into real estate,” he said. “Investors are trying to find yield, and real estate offers relatively attractive yield on a risk-adjusted basis.”
©National Association of REALTORS®
Reprinted with permission