Commercial real estate executives are most likely looking at the last six months and the losses they have incurred and also looking at the next six months to figure out how much more they are set to lose. When asked to point to the current and emerging issues affecting the commercial real estate sector, the answers pointed to the following:

  • The leisure, hospitality, and air travel sectors took a hit early on in the year and rebounds are expected into the next year. This could affect state and local taxes and potentially postpone infrastructure projects.
  • Instability in the capital markets has made it difficult to price debt and more and more loan defaults are not helping the situation.
  • There is a shortage of both affordable housing for rent and for sale. By some estimates, there is a shortage of 7.2 million affordable rental homes right now.
  • The design and use of space has changed. As the health of the worker has been prioritized, changing the way entries and exits of buildings are placed and how quality of air will be controlled.
  • Remote work has increased, as has the need to incorporate technology into the environment. Contactless doors, tracking people in buildings, monitoring air and water quality and controlling recirculation will all become a common part of commercial real estate projects.
  • Funding is likely to remain tight into the next year, affecting the viability of projects in underserved locations.

There are a lot of factors that affect someone’s decision to enter into the commercial real estate market and many of them can be included in a contract. An experienced attorney can make sure buyers and sellers are making informed decisions and have contracts that represent their needs.