RealEstateNews 9.30.29

Weekly News Roundup

• Investors Returning to Real Estate
• Moving to the Suburbs
• Employees Back in the Office

Investors Returning to Real Estate 

Are investors returning to the commercial real estate market? A new report from Colliers suggests that they are. And that’s good news for those looking for a turnaround in today’s challenging commercial real estate market. A good example? Investment activity in the multifamily sector has increased. According to Colliers’ most recent U.S. capital markets report, $38.8 billion of multifamily assets traded in the second quarter of 2024. That is broadly on pace with this asset class’s pre-pandemic averages from 2016 through 2019.

Colliers also pointed to the industrial sector as one that is again attracting investors. In its report, Colliers said that the industrial sector remains the most attractive for investors seeking to sink their dollars in commercial real estate. Colliers said that $20 billion of industrial assets traded in the second quarter of this year. At the same time, the average price of these assets increased by 8% on a year-over-year basis.

Investors aren’t flocking to all asset classes, though. Retail investment sales fell to $9.9 billion in the second quarter, according to Colliers. However, because of strong fundamentals, Colliers is predicting that investors will gradually return to this sector. In the office sector, Colliers said that lenders and special servicers are becoming more active regarding short sales, deeds in lieu of foreclosure and foreclosures. Source: REJournals

Moving to the Suburbs

The real estate landscape has experienced a dramatic shift over the past few years, with suburban areas emerging as the new epicenters of growth. This transformation is largely driven by evolving work trends, particularly the rise of remote work and hybrid work models. As more firms embrace flexible work options, employees are starting to reimagine their housing preferences, hence an increased need for suburban property. The result is an explosion in single-family home demand in suburban areas as people seek out more room for home offices, gardens and recreational spaces. 

This transition of work has directly influenced real estate preferences, with a significant number of buyers now looking for properties in suburban areas where they can find such amenities. Though it is remote work that has stood at the center of driving demand for suburban real estate, hybrid work models have played a vital role. Most companies are now adopting a hybrid working model for their employees, dividing their time between the office and home. This is giving people another reason to consider moving to the suburbs, considering that employees would not be asked to be in the office every day, while the time lost in traveling from the suburbs is cushionable.

The Suburbs that offer a combination of serenity and accessibility have begun increasing in popularity with apartment renters. While, residing near urban hubs is still significant, but shifted priority to a home that can truly cater to the requirements of today’s flexible and modern lifestyle. This has caused a new trend—suburban development where developers now innovate communities designed to cater to the new demands from remote and hybrid workers. The attraction of living in the suburbs goes further than this work-related concern. Quality of life and affordability are huge drivers causing individuals to now leave urban centers and set up base in the suburbs. Source: ETInsights

Employees Back in the Office  

Amazon is waving goodbye to remote work. Starting in January, corporate employees must go into the office five days a week. Workers were previously told to come in at least three days a week, but Amazon seems eager to end pandemic-era habits. In a memo sent to staff on Monday, CEO Andy Jassy said: “Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward.” Jassy added that Amazon will bring back assigned desks in offices that used to have them, including its two headquarters in Washington state and Arlington, Virginia, which together have about 88,000 employees.

While employees in the office might kill time messaging friends or flipping through TikTok, remote workers take advantage of being far from the watchful gaze of bosses to chip away at personal to-do lists or to goof off. Nearly half of remote workers multitask on work calls or complete household chores like unloading the dishwasher or doing a load of laundry, according to the SurveyMonkey poll of 3,117 full-time workers in the U.S. A third take advantage of the flexibility of remote work to run errands, whether popping out to the grocery store or picking up dry cleaning.

Sleeping on the job? It happens more than you might think. One in 5 remote workers confessed to taking a nap. Some 17% of remote workers said they worked from another location without telling anyone or watched TV or played video games. A small percentage – 4% – admitted to working another job. Different generations also have different work habits: 26% of millennials admit to taking a nap during the workday compared with 16% of GenX; 18% of GenZ have worked another job compared with 2% of GenX and 1% of boomers; 31% of GenZ have worked from another location without telling anyone compared with 16% of GenX. Source: USA Today