Amid an improving economy, the commercial real estate market continues to recover, marked by rising occupancy across all commercial property markets.
In the office market, occupancy increased by another 1.8 million square feet on a quarterly basis as of October 23, following a quarterly increase of 8 million square feet in September. However, the recovery process has a long way to go, with 128.4 million square feet of office space released back to the market since 2020 Q2. Multifamily demand remains robust, with positive net absorption of 1.06 million apartment units since the second quarter of 2020 and asking rents rising further to 11.4% year-over-year on average across 390 markets. The industrial market is another strong leg of the commercial real estate market, with 654 million square feet of industrial space absorbed since 2020 Q2.
Assuming there is no big resurgence of the Delta variant, improving economic conditions, the lifting of the international travel ban in the coming months, and more business and personal travel and recreation in the coming months, all lead to the sustained recovery of the commercial real estate in 2022 and beyond, with the office market having the longest time to recover.