MarketSnapshot: Q3 2022

  • Market data, charts & graphs: current and historical trends for single-tenant office, industrial and retail properties, as well as multi-tenant retail
  • Overall market trends
  • Market summary & analysis
  • Economic data points

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With an absence of new, shocking headlines to begin the second half of 2022, the commercial real estate market continues to face the same external influences that will undoubtedly impact how we end the year. The economic picture remains murky, with inflation and rising interest rates at the forefront of investors’ and consumers’ minds. Fears of a recession still loom, and there has been a noticeable decrease in consumer confidence this year. Additionally, the industry continues to question the future of 1031 exchanges, and the upcoming mid-term elections could impact economic conditions and investor sentiment as well. These trends, however, are balanced by strong job growth, low unemployment, robust consumer spending, and insatiable investor demand for quality assets. 

In the single-tenant net lease market, we’ve seen investment sales volume decline over the past three quarters and compared to the record-setting end to last year, current activity levels may feel somewhat lackluster. Put in perspective though, the market is on pace to have a very solid year, perhaps topping the $70-billion-mark and solidifying 2022 as a top three year in history. However, fourth quarter will be telling. The final three months of the year will not only dictate how 2022 gets logged in the history books, but it will also set the tone for 2023. 

The multi-tenant retail sector tells a slightly different story, although the same external influences still apply. Post-pandemic, we’ve seen investor interest return in earnest to this asset class, and 2022 is well positioned to be a record-setting year for the sector. While investment sales volume has fluctuated in recent quarters, investors have eagerly been seeking out new developments, quality second-generation assets, as well as value-add opportunities. 

Will we see investors apply the brakes in response to uncertain economic conditions and a continued supply-demand imbalance? Or will buyers push to get transactions completed before year-end resulting in an uptick in activity?