Joe Fairless says record commercial real estate sales show no signs of slowing

Joe Fairless.

Commercial real estate is booming, despite myriad setbacks. The pandemic has changed our world, changing the way we live, work and shop.

CINCINNATI, OHIO, USA, March 7, 2022 / — Commercial real estate is booming, despite myriad setbacks. The pandemic has changed our world, changing the way we live, work and shop. Surprisingly, this did not lead to a slowdown in commercial real estate. According to Joe Fairless, co-founder of Ashcroft Capital, commercial real estate will continue to remain strong.

Commercial real estate benefits from more than a decade of expansion

Notes by Joe Fairless that in 2019 the commercial real estate market passed an important milestone. This marked a decade of continuous growth in the market. This is the longest period of post-war growth.

The trend has continued, with 2021 breaking records for commercial real estate. The foreclosure rate has not increased significantly during the pandemic. Private equity funds and pension funds have spent record sums on new commercial buildings.

The US composite and non-distress index has seen tremendous growth. It has risen 350% since 1996. The US Investment-grade non-distress index has followed a similar trajectory, rising 338%.

Industrial real estate

One of the biggest increases was seen in industrial real estate. Joe Fairless says much of this growth is due to the warehouses needed for online retail purchases. Vacancies are at an all-time low and prices are at record highs.

This, along with a reduction in traditional office and retail real estate needs, calls for creative solutions. Retail businesses are closing. More and more office workers are choosing to stay home in the wake of the pandemic.

Demand for these types of real estate has not grown at the blistering pace of industrial real estate. Some retail and office locations may be better suited as warehouses and distribution centers.

This is the strategy adopted by the e-commerce giant Amazon. They spend hundreds of millions of dollars to turn unused buildings into warehouses and distribution centers. This includes offices, enclosed malls, and even golf courses.

Amazon alone is spending hundreds of millions of dollars to turn abandoned offices, malls and even golf courses into warehouses and distribution centers, according to CNBC.

Multi-family houses

Multi-family homes have experienced hyper-growth over the past decade. Even the 2020 pandemic has not stalled growth. 2020 saw a 50% increase in multi-family units compared to 2019.

Joe Fairless notes that the occupancy rate is close to capacity, as of July 21, at 96.9%. This exceeds the previous record of 96.5% in 2000. Rents also increased by 10% in more than half of the 150 largest markets.

Competition for multi-family homes is fierce right now. It is common for investors to outbid offers worth more than half a billion dollars by a margin of 5-10%.

Joe Fairless

Joe Fairless is a real estate expert and the co-founder of Ashcroft Capital. The company has over $1 billion in assets under management.

Joe Fairless is passionate about passing on his real estate knowledge to others, from newbies to long-time investors.
That’s why he created the podcast, Best Real Estate Investing Advice Ever Show. The show is the longest-running podcast in the daily real estate category, with over 500,000 downloads each month.

Caroline Hunter
Web Presence, LLC
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