Feeling uncertain about commercial real estate in 2024?
You’re not alone!
In commercial real estate, even the most experienced people often find themselves second-guessing their next move. It’s part of the process.
As we step into 2024, the inevitable doubts and uncertainties will be present, especially during an election year. 2024, like all preceding years in the commercial real estate world, will be unpredictable.
Our attitude? Bring it on.
This year, we’ll embrace unpredictability as our constant companion.
The ability to seize opportunities in unforeseen circumstances will define those who thrive in commercial real estate.
Remember: Success is not found in calm seas but in the skillful navigation of turbulent waters.
There’s a lot to be excited about in the coming year. From landlords breathing new life into old properties to Salem’s burgeoning growth, good things are on the horizon for the Willamette Valley and the entirety of Oregon.
Despite uncertainty in the market, people are pushing forward, creating exciting new things, and reimagining ways to embrace the market and real estate landscape.
Here are two positive trends we see that will continue through 2024:
1) Landlords breathing new life into aging buildings
The rising costs of construction, high interest rates, limited supply of construction materials, and the ongoing effects of the pandemic have created a situation where the most immediate return on investment comes from reinvestment.
The price gap between remodeling older mid-century industrial buildings and building newer, more modern constructions is widening. Many landlords are extending the life of existing structures to address this discrepancy.
This approach helps bridge the rental gap between affordable and expensive options, opening up opportunities for increased rental activity and new leasing options that would otherwise not be feasible.
It’s also an incredibly popular practice in most cities. Who doesn’t like to see an old mill or storage facility turned into a cute coffee shop or a trendy new restaurant?
Take, for instance, the former Truitt Bros. warehouse at 1244 Front St. The owner’s $850k investment in modernizations and upgrades has revitalized the property, making it highly leasable.
Similarly, the Santiam Industrial Center, once a vacant blight on Stayton, is undergoing a $7M phase I improvement by IRG, making it a sought-after multi-tenant industrial complex.
We predict that this trend will become more common in the coming years as the supply in Salem diminishes, and demand within the Urban Growth Boundary (UGB) continues to rise.
2) Salem’s continued growth
Salem’s growth and appeal are on the rise, and it remains to be seen if commercial properties, investors, landlords, tenants, and developers can keep up with the pace – a challenge that we expected them to meet, albeit narrowly.
As we gaze into the future of Salem’s CRE market in 2024, we witness a landscape ripe with potential and growth, excitement, and trepidation.
Salem’s allure as a commercial hub is steadily growing. Our beloved city’s evolution into a desirable destination for investors, landlords, and tenants is fantastic to watch.
However, doubts linger about whether our current infrastructure can support this growth. In 2024, the supply of new spaces will likely stay stagnant while demand keeps growing within the UGB.
Like seasoned sailors navigating stormy waters, we in the commercial real estate world must rely on our expertise and foresight to navigate these uncertain times.
It is in these moments of uncertainty that our greatest potential is revealed. Armed with knowledge, driven by insight, and buoyed by the resilient spirit that defines us, let’s welcome 2024 as a year filled with promise, potential, and the power to turn challenges into triumphs.