Property Markets 'Normalizing' Post-COVID Period

Aspects of the real estate industry are normalizing and reverting to pre-COVID-19 pandemic patterns while others have permanently shifted to a “new normal” that came with the pandemic, according to a report from the Urban Land Institute (ULI). 

ULI released the report, Emerging Trends in Real Estate 2023, recently. The report was compiled from the data and insight from more than 2,000 real estate industry experts and includes insight on the housing market and institutional and commercial facilities. 

“As we enter 2023, the pandemic-driven factors that upended the global economy for more than two years are starting to fade,” says Anita Kramer, senior vice president of ULI’s Center for Real Estate Economics and Capital Markets. “At the same time, structural changes like the widespread adoption of remote work will likely continue to inform investor behavior. A series of long-term factors such as the rising cost of housing, increased climate risk, and declining socioeconomic mobility pose continued uncertainty for the private and public sectors alike. There are also opportunities – the increase in federal infrastructure spending provides the chance to create greener and more equitable communities that can adapt to these challenges.” 

Facility-related insights from the report include: 

• The U.S. commercial property market remains strong, with markets such as the hotel sector trending back to pre-pandemic level. 
• Institutional and commercial businesses are reassessing office space priorities as employees and employers continue to work through hybrid work situations and the desire of many employees to work from home at least a couple of days per week.  
• While many firms are terminating leases with commercial properties, a mass departure from office buildings appears unlikely. 
• The continued impact of climate change has contributed to building stakeholders to seek greater environmental, social and governance (ESG) disclosures, and that the requests and protocols cannot be ignored. 
• Building owners and investors are pushing the market toward establishing more energy-efficient buildings and ways to limit greenhouse gas emissions. The motivations are boosted by the programs offered by the Inflation Reduction Act of 2022. 

Dave Lubach is managing editor of the facilities market.  

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