The commercial real estate trends to watch in 2022 were brick-and-mortar retail, the return to the office, senior living, housing markets, Federal Reserve interest rates, self-storage, business travel, mixed-use developments, digital real estate and smaller suburban offices on shorter leases. Industrial and multifamily led activity across the asset classes.
Editor’s note, August 2026. This piece was published in March 2022 and describes the market as it stood then. Where it stands now, from Federal Reserve data: the median U.S. home sale price is $410,700 (Q2 2026), below the $442,600 peak of Q4 2022; the federal funds rate is 3.63%, down from a 5.33% peak in August 2023; the 30-year fixed mortgage averages 6.66%, down from 7.79% in October 2023; and consumer prices are rising 3.3% year over year. Sources: FRED series MSPUS, FEDFUNDS, MORTGAGE30US and CPIAUCSL.
Thanks to increasing demand and a recovering economy, the real estate market is on an upward trend for 2022. There is a rise in activity in all the asset classes, with the leaders being industrial and multifamily.
In 2022, this upward trend will continue as investors and tenants alike demand more real estate variety. The mortgage interest rates forecast for 2022 is 3.6%, which could impact the market. That said, this is what to expect from commercial real estate investing in 2022.1. Brick-And-Mortar Retail Stores
The pandemic brought about a surge in online shopping, while sales in traditional brick-and-mortar stores declined due to social-distancing requirements. The share of e-commerce retail sales rose from 16% to 19% in 2020 compared to pre-pandemic 2019.
Even though online shopping offers advantages like convenience and saving on time, many consumers still prefer shopping in person. Brick-and-mortar shops allow consumers to shop for items that require accurate sizing and a proper fit.
More online business owners will likely push the demand for brick-and-mortar properties. For instance, Amazon recently announced its first-ever physical store for men’s and women’s fashion, Amazon Style. The store is set to offer an elevated shopping experience and will open later in the year.
2. How Is The Return To The Office Changing Office Space?
Even though offices remain the hub for business activities, employees now have flexible work-from-home options. Employees can skip the daily work commute for a few days a week. During the height of the pandemic, millions of employees worked from home. However, as things slowly return to normal, statistics show that an increasing number of employees prefer the more flexible work-from-home model. Real estate investors must keep an eye out for days when all the employees are in the office for teamwork, which creates a need for bigger office space. That may call for a rethink of the workspace design, as buildings have to conform to the new reality of preventing communicable diseases.3. Senior Living
With increased life expectancy, there is a growing demand for senior living homes and skilled nurses. The demand is not just about buildings as investments, but the increasing need for places where the elderly can feel safe, protected, and cared for. Life expectancy is expected to rise to 85.6 by 2060. Baby boomers are growing old and will need skilled nursing and more senior living homes. Covid-19 caused a decline in the move-ins, leading to a drop in occupancy rates. Even though there is a growing demand for senior homes now, percentages are still lower than what they were pre-pandemic.4. Housing Markets
Post-pandemic, consumers are looking for affordable rents and home prices, which in turn will limit home price appreciation and rent growth. Millennials aged 26 to 35 are in the prime first-time homebuyer age and need affordable housing despite the slight increase in mortgage rates to 2.9%. Rising rents, as high as 7.1%, will further drive millennials to purchase homes. The markets for home purchases and apartment rentals are usually polar opposites of each other. When the rental market is strong, the housing market is soft, and vice versa. The pandemic created a desire for more space, as more people adopted a work-from-home model. This directly affects the rental and housing market, driving them to record highs.5. The Federal Reserve And Interest Rates
Inflation is expected to continue above the trend and will likely decrease as the year progresses. The majority of the Federal Reserve members predict three interest rate hikes in 2022. They also expect that the increased interest rates will help fight inflation. Long-term real estate interest rates will remain low, providing attractive financing conditions for investors. The consumer price index rose to its highest level in 30 years. However, this does not account for the unpredictable swings during the pandemic’s short period. The bottlenecks in the supply chain are still present and will continue to be for some time. The shortages in key commodities and goods are likely to continue and fuel high prices in the middle of the year. However, things are likely to cool down toward the end of the year.
6. Self-Storage
Self-storage outperformed expectations during the pandemic with an average profit margin of 41%, higher than other real estate niches. The increased strength in the apartment and housing markets positively affects self-storage. Due to the pandemic, more and more people needed to move stuff out to create space for study and work-at-home situations. Further, millennials are starting families, meaning an increasing number of people will look into self-storage. The same goes for college graduates living in cities where living space is at a premium. Before getting into real estate, it pays to understand tax benefits such as the 1031 exchange process to save money on profits and investments.7. Conventions And Business Travel
During the height of the pandemic, business-related travel halted, with most meetings and conventions moving online. Hotels, entertainment, and restaurants catering to business meetings can expect a recovery in 2022. Selling a new product or closing a major deal is always best done in a face-to-face meeting, thus increasing the need for hotels, meeting spaces, and entertainment spots.8. Why Are Mixed-Use Developments On The Rise?
An overarching trend is the migration of urban users to decongested areas, leaving vast office spaces unused. To utilize the available urban spaces and provide better value, commercial real estate investors will likely turn to mixed-use developments. That way, commercial developers can stem the tide toward residential properties by having all amenities, such as retail, commercial, and residential properties all under one roof. Mixed-use developments look like the best way to attract a new market.9. What Is Digital Real Estate?
Digital communications surged during the pandemic since people relied on them for work, e-commerce, and entertainment. Even as the economy opens, people continue to rely on digital communications because of the conveniences they offer. This leads to a demand for cell towers, data centers, and logistics facilities, which counts as growth in commercial real estate.10. Smaller Is Better
What the market has reaffirmed is that nothing stays static forever, so there is some wisdom in moving with the times. Currently, companies are hesitant to commit to long-term leases, hence the shift toward shorter-term leases. Further, as employees seem to prefer the hybrid working model, it makes sense to opt for small working areas, or even smaller ones situated closer to workers’ residential areas. So investors are likely to target smaller suburban offices.Final Word
While interest rates are set to rise during the year, it doesn’t create much of a worry for commercial real estate players as they expect a commensurate rise in the economy. Also, a few top commercial real estate management companies smooth the process for investors to get through the hassles involved. That said, some of the trends you should expect from the commercial real estate market include a rise in hospitality spaces, workspaces, and brick-and-mortar retail spaces.Frequently asked questions
What were the biggest commercial real estate trends in 2022?
The trends to watch in 2022 were brick-and-mortar retail, the return to the office, senior living, housing markets, Federal Reserve interest rates, self-storage, business travel, mixed-use developments, digital real estate and smaller suburban offices on shorter leases. Activity rose across every asset class, and industrial and multifamily properties led the way.
Where do interest rates stand now?
As of August 2026, the federal funds rate is 3.63%, down from a 5.33% peak in August 2023, and the 30-year fixed mortgage averages 6.66%, down from 7.79% in October 2023. The median U.S. home sale price is $410,700 (Q2 2026), below the $442,600 peak of Q4 2022, and consumer prices are rising 3.3% year over year, per Federal Reserve (FRED) data.
Why did self-storage do well during the pandemic?
Self-storage outperformed expectations during the pandemic, with an average profit margin of 41%, higher than other real estate niches. People needed to move belongings out to make room for studying and working from home, strong apartment and housing markets lifted demand, and millennials starting families and graduates in crowded cities added more renters.
Why are companies moving to smaller offices?
Companies are hesitant to commit to long-term leases, so they are shifting toward shorter-term leases. With employees preferring a hybrid working model, it makes sense to rent smaller work areas, often closer to where workers live. That is why investors are likely to target smaller suburban offices.
