Preparing for 2024 in Commercial Real Estate. Is your team ready?

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Daniel Trainor

Daniel Trainor

Hit the ground running

As we usher in the holiday season, savvy commercial real estate brokers and their teams are setting the stage for a triumphant start to 2024. Now is the opportune moment to fine-tune your strategies and ensure you’re ahead of the game come January 1. First on the agenda: a meticulous evaluation of your existing processes. Identify bottlenecks and inefficiencies, paving the way for a seamless transition into the new year. Simultaneously, it’s crucial to tie up loose ends on lingering projects, ensuring you enter 2024 with a clean slate.

 

While the festivities ensue, keep your focus sharp on the future. December is the ideal time to pinpoint potential prospects and devise a comprehensive plan on how to approach them in the upcoming year. Don’t be caught off guard—your competitors are gearing up to hit the ground running on January 1, and so should you. Delaying preparations could mean playing catch-up, putting you at a disadvantage. Stay one step ahead, invest in your success, and make sure your team is ready to embrace the challenges and opportunities that lie ahead in the new year.

 

What’s coming in 2024?

Commercial Real Estate Trends Across Asset Classes:

The commercial real estate landscape in 2024 is marked by diverse performance across asset classes. The office sector faces challenges, with a national vacancy rate of 19.2% in Q3 2023. While some older office spaces may become obsolete, opportunities arise for converting them into apartments or data centers. Industrial properties, especially cold-storage facilities, continue to perform well, but signs of softening emerge as post-pandemic demand wanes. Retail, particularly neighborhood shopping centers, is expected to shine in 2024, with steady performance and positive rent growth. Multifamily properties remain strong, although luxury apartments face decreased demand.

 

Industry Challenges and Opportunities Ahead:

Top concerns in commercial real estate include interest rates and rising costs. The bond market’s turbulence in Q4 2023 has raised uncertainty, but the chances of further Fed rate hikes have diminished. Rising construction costs and insurance premiums add to challenges, prompting owners to streamline processes. Despite obstacles, 2024 offers opportunities for investors. Cash optimization is crucial, and quick access to cash can capitalize on distressed assets. Affordable housing initiatives, proptech adoption, and energy-efficient upgrades present avenues for innovation and competitiveness. While the overall outlook for 2024 may be muted, staying vigilant and leveraging these opportunities will be key for success in the dynamic commercial real estate market.

Learn more and read the full report from JP Morgan here.

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