The onset of the pandemic led to a decrease in multifamily housing demand in high-density cities as renters started to favor more spread-out communities in the suburbs. But big-city demand is coming back.

Multifamily home building is gradually picking up pace in large metros once again, according to an analysis from the National Association of Home Builders.

“In the wake of the public health crisis, there is a pronounced return to higher density markets or geographies, particularly in apartment and other multifamily residential construction,” researchers note on the NAHB’s Eye on Housing blog.

Overall, about 67% of multifamily development occurred within large metro areas; 27% in small metro areas; and 6.1% in rural areas and small towns, according to the builder’s analysis. Small metro areas are those considered as having less than one million total population.

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Employees are headed back to the office. After the pandemic caused many companies to encourage work-from-home policies for office workers, real estate indicators signal a reversal. As they return, companies want more space.

As of February, office occupancy continued to increase, with 84% of 390 metro areas seeing a rise, according to CoStar data. Since the third quarter of 2021, 30 million square feet of office space has been absorbed, which is on par with prepandemic levels, the National Association of REALTORS® reports.

Still, vacancies remain. About 100 million square feet of office space nationwide have been vacant since the start of the pandemic in the U.S. in 2020. Gay Cororaton, an NAR research economist, predicts that reabsorbing that office space could take through the end of 2024.

Over the past year, office occupancy gains were highest in Boston. On the other hand, New York, Chicago, and Washington, D.C., continue to see high vacancies.

“Occupancy is increasing in major tech metro areas,” Cororaton says on the blog. “The rising occupancy in these tech metro areas indicate that tech companies are contributing to the demand for office space, even as nationally, 45% of mathematical and computer workers work from home for at last some part of the time.”

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The Dallas metro area has seen the most activity in real estate development over the past decade, becoming like a magnet for new residents and businesses, according to new research from StorageCafe, a national storage-space marketplace from Yardi. Dallas led the U.S. in development, but the majority of major cities across the country saw an increase in real estate development over the last 10 years, the report shows.

Researchers looked at real estate development from 2012 to 2021 by factoring in construction in single-family, multifamily, self-storage, office, retail, and industrial sectors among the 50 largest metro areas.

“After experiencing limited growth in the first half of the past decade, as most markets were still navigating the effects of the Great Recession, the real estate market was firing on all cylinders in the second half,” the StorageCafe report says. The onset of the pandemic in 2020 sparked a brief pause in activity, but 2021 “saw a pickup in construction activity in most of the country’s largest metros,” the report says.

In the chart below, StorageCafe ranks the largest metros by new real estate construction from 2012 to 2021.

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Taking advantage of growing interest in alternative office arrangements, two companies are teaming up to build a coworking giant that will allow firms to rent office space whenever they need it. IWG PLC, a flexible office operator and rival to WeWork, announced it was investing about $350 million in a venture with the Instant Group, which operates an online listing site for office space.

They are setting out to create the world’s largest online marketplace for flexible office arrangements, which The Wall Street Journal calls the “Airbnb of office space.” Tenants will be able to find and book office spaces and various other corporate accommodations, including hotel meeting rooms.

Since the pandemic began, demand has grown for furnished office space with short-term leases. Many companies have embraced hybrid work schedules, which is also sparking greater interest in on-demand meeting rooms and offices that can be booked by the day or hour.

Forty-one percent of office tenants in a mid-2021 survey conducted by the property brokerage JLL said they expect to use more flexible office space because of the pandemic. That is up from 29% in 2020.

IWG operates more than 3,000 office spaces worldwide under brands like Regus and Spaces. IWG and Instant Group say they plan to take their joint venture public within the next two years.

Still, vacancies in coworking spaces are prevalent despite growing demand, particularly in urban centers. Coworking giant WeWork Inc. said it was profitable in the fourth quarter of 2021 for the first time since the pandemic began, but a third of its space remains vacant.

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Housing starts rose in February, led by a robust increase in multifamily construction, the Department of Housing and Urban Development and the Census Bureau reported Thursday. Housing starts, including both multifamily and single-family, increased 6.8% last month and are up 22.3% over a year ago.

Broken out, activity in the multifamily sector, which includes apartment buildings and condos, rose by 9.3% to an annualized pace of 554,000 units. That marks the best pace since January 2020. Economists expect the multifamily sector to continue to show strength over the coming months.

Meanwhile, the seasonally adjusted annual rate for single-family starts increased by 5.7% to 1.22 million. Supply chain delays and cost issues, however, are limiting the pace of home building in many markets.

“Builders continue to start homes as the demand for new construction remains solid in a market lacking inventory of previously owned homes,” says Jerry Konter, chairman of the National Association of Home Builders. “However, construction costs are rising too quickly, which threatens housing affordability conditions in 2022 as interest rates rise.” Read more: Builder Confidence Dips on Rising Material Costs

In February, on a regional basis, combined single-family and multifamily housing starts were strongest in the Northeast, posting a 28.7% increase month over month, followed by a 15.3% increase in the Midwest and an 11.4% increase in the South. The West was the only region to register a decrease last month, with housing starts falling by 11.4%.

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A boom in life science buildings led Cambridge, Mass., to top a list of most expensive office submarkets of 2021, according to a new analysis by PropertyShark, a real estate data resource. The average price per square foot of office space in Cambridge was $1,560 last year, the highest in the nation—even overtaking West Coast and New York City locations.

For comparison, the average price nationwide per square foot of office space was $237 in 2021.

Life science office spaces have posted significant growth over the last two years. The sector is “benefiting from increased digitalization and investor appetite,” PropertyShark reports in its analysis. “This means successful life sciences startups are driving demand for a growing number of specialized office properties.”

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