The commercial real estate (CRE) industry witnessed significant shifts in 2023, marked by challenges such as rising interest rates, economic uncertainty, and evolving market dynamics. Insights gleaned from comprehensive reports by DLA Piper offer valuable guidance for navigating the complexities of the CRE landscape in 2024.

Key trends from 2023 include the dominance of multifamily properties in acquisition activity, followed by industrial assets, while office space transactions remained relatively low. Retail experienced a notable uptick, driven partly by the continuation of hybrid work arrangements, highlighting the importance of amenities in residential areas. Financing contingencies saw an increase, with buyers seeking protection amidst economic uncertainties, although sellers maintained leverage in negotiations.

Property management and construction practices remained relatively stable, with minimal shifts in fees and costs as a percentage of property revenue and project expenses, respectively. Notable variations were observed across asset classes, with multifamily and mixed-use properties incurring higher construction management fees compared to senior housing and industrial properties.

Looking ahead to 2024, stakeholders can anticipate continued emphasis on multifamily and industrial properties, alongside evolving trends in retail and mixed-use developments. Financing contingencies are expected to remain prevalent, reflecting ongoing economic uncertainties. Property management and construction practices are poised to adapt to changing market conditions, with stakeholders leveraging competitive pressures to negotiate favorable terms.

Overall, proactive strategies informed by market insights will be essential for success in the dynamic landscape of CRE in 2024. Through continued monitoring and adaptation, stakeholders can position themselves to capitalize on emerging opportunities and navigate potential challenges, ensuring resilience and success in an ever-evolving industry environment.