Commercial real estate or shortly known as CRE is one of the best ways to invest in the real estate business. Due to the pandemic and overall economic inflation, the recent trend in Commercial real estate is a Price increase.
Price increased by 24% percent
CRE has seen a price increase for last year’s December. Investment managers are willing to be open about this issue, as it is a concern for many investors. CRE property prices were up by 24% from the December of last year, and this has made the business more difficult to sustain. Other sides of CRE have also seen an increase in their price. Self-storage saw 66%, and the industrial sector saw a 41% increase this year, which is higher than ever. Cap rates in the industrial sector have fallen too.
Why is this trend going to stay long?
The pandemic has left a large impact on the whole real estate market. As properties were not built according to the demand, and the high price of raw materials. Existing property prices have increased a lot due to the demand. As long as this is the case, prices will not come down.