top of page
  • Writer's pictureStacy Patrick

May Commercial Real Estate Newsletter


What's in this issue?



Hot, Hot, Hot: Should you be investing in Sun Belt Properties? As real estate markets in the Sun Belt heat up, many investors are wondering whether to direct their money to the west and/or south. Citing moves by remote workers and other growth factors, a November report by the Urban Land Institute/PwC US issued a top 10 “markets to watch” list featuring literal hot spots Nashville; Dallas/Fort Worth and Austin, Texas; Atlanta; Tampa/St. Petersburg and Miami, Florida; Raleigh-Durham and Charlotte, North Carolina; and Phoenix, Arizona. That said, due diligence is a must. Sun Belt markets often offer lesser business tax rates and regulatory requirements than gateway markets, but some are also struggling with “big city problems” such as the need for better infrastructure. Pending climate change may also call for added insurance and remediation costs in Sun Belt areas. Some will be subject to extreme temperatures within the next 30 years; others face added threat of hurricanes and/or rising sea levels. High-tech climate risk tools can help with forecasts. “Large corporations are choosing Sun Belt cities due to their strong labor markets, good weather, tax-friendly business environments and overall lower cost to do business,” states one Forbes article. “These trends are expected to continue in years to come. “The Sun Belt has gone through cycles of boom and bust; however, each bust is always higher than the previous bust pricing. The Sun Belt will have to continue to manage the water and heat issues to maintain the quality of life that continues to draw new residents.”


Analysts: More workers returning to offices in 2023 Now that the pandemic has slowed, some employers are eliminating work-from-home options and requiring workers to again be physically present in communal work places. Analysts predict that as much as 54% of the U.S. workforce will return to brick-and-mortar workplaces this year, either through hybrid or all in-house arrangements. As such, one PwC report forecasts that 10 to 20% of existing real estate stock will need to be removed or repurposed to fit employers’ new needs. “Landlords will need to do a better job of delivering what tenants want,” write the authors. “As employers and workers settle on work preferences, many firms will continue to hold onto their offices either as a precaution in case they need the space in the future, or because they could not break their lease. However, more firms are downsizing or not renewing their expiring leases. As a result, vacancy rates are still rising slowly. Many tenants have even started subletting their office space until their leases expire. “No one knows for certain the amount of office space needed for workers in the years to come. However, we do not expect a mass departure from office buildings going forward.”


Research: Remote work is profoundly affecting the housing market A report published by the National Bureau of Economic Research predicts how remote work will impact the future real estate market, spurring moves from urban centers to suburbs, exurbs or smaller metros, especially in the southern and western U.S. ​​​​​​​

©2023 Century 21 Real Estate LLC. All rights reserved. CENTURY 21®, the CENTURY 21 logo, and C21® are registered service marks owned by Century 21 Real Estate LLC. Century 21 Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated.

2 views0 comments


bottom of page