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Will Warehouses Outperform Office Buildings in 2018?


There’s a interesting look at what commercial real estate sections could benefit most in 2018 by Steve Randall in Mortgage Professional America, What’s ahead for commercial real estate in 2018?.

As far as commercial real estate it will be interesting to see what sector does end up performing best in 2018.

What’s ahead for commercial real estate in 2018?

DiRocco says that it will be industrial which drives growth for CRE as demand for warehousing and fulfilment centers is fueled by rising e-commerce growth.
This shift is at the expense of retail where the conversation is around how to utilize existing space amid falling demand for bricks and mortar stores.

The previous 70% shopping, 30% entertainment mix for malls is starting to flip, DiRocco says, with the retail space acting more like a display center for products that will then be bought online.

However, retail could still benefit from growing e-commerce with online stores requiring physical space to enable collection of goods.

Despite the fast-growing tech sector, the trend for offices is changing.

“Offices aren’t the same size they used to be. There’s a lot of open layouts, telecommuting, reasons to not be in the office,” he says, highlighting flat rents and rising vacancy rates.

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