The United States of America is a young country of contrast where you can ski and surf on the same day. The natural landscape experiences every climate type, offering a diversified choice of locations where to invest.   

In April 2023, the Harvard T.H. Chan School of Public Health indicated that U.S. life expectancy has declined to 76.4 years. While the U.S. is a leader in medical and health innovation, access to prevention care may be the source of the problem, in addition to the industrialization of food and environmental conditions that are all involved to a certain degree in the decline in life expectancy. 

Foreigners invest an average of over $5 billion in the United States every day despite relatively low returns compared to investments in other countries and the widespread expectation of a continued dollar depreciation.
Since the COVID-19 pandemic, the prediction for commercial real estate, like the American economy, was to degrade into a soft landing in most categories into a recession. However, the fourth quarter of 2023 revealed more resilience than expected, with the economy showing signs of strengthening.

The office category may not be your first choice as this market suffered pain, but investors are resilient. There is a growing interest in class A buildings with strong bones where landlords have invested in LEED improvements. Since the pandemic, converting offices into residential units has become a new trend in most metropolitan areas. Opportunities come and go, and if you are an experienced investor, offices may be just what you need. For example, the sublet market indicates an increased demand. With offices, you must anticipate a hybrid work model with lease terms between 3 and 15 years. 

Industrial and multi-residential units continue to attract the greatest interest. At the same time, retail and hotels sustained the largest decline post-pandemic. The U.S. is the third largest country in the world geographically, so it is important to consider its size and the impact the pandemic had on commercial real estate in different sectors and markets.

Back in the nineties, there was already talk of the future of retail and shopping centers. So, it is not surprising that with the rise of e-commerce and then the pandemic, this industry has an uncertain future. However, one resilient sector that does very well during a downturn is the grocery–anchor tenant.  Farmers will confirm without hesitation that when there is an economic crisis, grocery–anchor tenants do better.   

For the past 30 years, the industrial market has gained popularity. In contrast, the retail sector is losing gradually, especially with the rise of big box stores such as Amazon etc.  Today, more than ever, institutional investors who possess an abundance of capital need safety and preservation of wealth, and they find it in the popular darling of real estate, the industrial market (500,000 ft2 facility). 

With most senior housing renters vaccinated, many investors feel reassured of their investments. Over the next five years, according to CNB, there will be another wave of baby boomers demanding retirement housing; however, this time, it may be a single family or a townhouse adapted for special needs.

The self-storage market is doing well as rents are going up, and the vacancies are down, as long as the industry is not overbuilt. 

Historically, since 1929, commercial banks have declined to finance vacant land. However, if these units are leased by Big Box companies with their facilities and delivery trucks the risk has been reduced in the equation and lending facilitated.

We are in a turbulent time to assess the future, so what is new/different today that affects commercial real estate?  In the U.S., a portion of the labor force has the privilege to question why they go to the office to sit at a desk and work on a computer all day when it could be done, in theory, from home. There are so many undeniable advantages to working from home that real estate developers are looking at building multi-residential projects in secondary cities. The rise of interest rates and inflation, although “dévastateur,” have been a plus for other investors/sectors. There are already investors taking advantage of the undocumented immigrants coming from Latin countries south of the U.S. border, planning to create multi-residential units, creating new opportunities.

The moral of the story is that it is not the richest, the most intelligent, or the strongest that survives; it is the one who can adapt.