Invest Like an Expert: Top 14 Commercial Property Market Trends to Follow in 2023

Commercial real estate market trends in 2023 are affecting how entrepreneurs invest. Here are the 14 key trends that investors and experts are keeping a close eye on.

Commercial property market trends in 2023 are flagging up potential challenges for real estate investors.

Cyclical headwinds, like rising interest rates and falling GDP, are forcing industry experts to take a long-term view of property assets. Property investors, meanwhile, are finding out that they need to keep up-to-speed with what’s happening in the ever-changing commercial real estate market.

Even investors who have been making real estate investments for a while may find these trends hard to keep up with, especially if they lack fundamental information preventing them from making decisions.

To be more specific, these common investor difficulties may include one or all of the following:

  • Not knowing enough about commercial properties and what makes for a sound investment.
  • Uncertainty about the type of investment they should go for.
  • A lack of information about which trends control the commercial property market these days and how they can affect the purchases they make.

This article provides a comprehensive guide for the commercial real estate market in 2023. We’ll cover the following:

  • How to invest in commercial real estate in 2023
  • Advantages of investing in a commercial property right now
  • Top commercial property market trends to watch in 2023

[If you’re looking for reliable funding for a commercial property investment, Duckfund provides soft deposit loans in less than 24 hours with lower interest rates than traditional loans.]

How to invest in commercial real estate in 2023

Commercial real estate is a promising investment opportunity. As a rule, investors can choose between two strategies:

Direct investment

Those who want to either personally manage the property or work closely with a property manager may find it beneficial to invest directly in a single piece of real estate.

Investors adopting this strategy often have a financial cushion and might be looking to take advantage of tax deductions associated with a depreciating property.

Commercial real estate provides unrivaled versatility in direct investment types, including mobile home parks of various sizes, storage facilities, industrial properties, multi-family buildings, stores, and shopping malls.

Indirect investment

Those looking for passive income and easy portfolio diversification should consider indirect investment. Real estate investment trusts (REITs) are popular among retail investors because non-traded and publicly traded REIT stocks are accessible to those with limited financial resources.

Additionally, indirect investment enables buyers to invest in popular areas like New York and Los Angeles, even if they don’t already reside there.

Advantages of investing in a commercial property right now

There are many benefits associated with investing in commercial property this year.

Diverse investment options

Commercial real estate provides a variety of investment alternatives, including industrial and office buildings, allowing any investor to customize their portfolio to their tastes.

Stable cash flow

One of the primary benefits of investing in a commercial property is the stable stream of income investors can expect, thanks to longer lease terms. This secure income can protect the investor from financial market volatility.

Low mortgage rates

Compared to buying a building outright, commercial real estate investment allows the investor to take advantage of a property’s potential rise in value at a far lower outlay because of the current low mortgage rates.

A better return on investment

In comparison to residential real estate, commercial property offers a higher return on investment (ROI), because of the diverse investment portfolio available, longer leasing terms, and longer tenancy periods. According to Forbes real estate advisor, the average annual ROI for commercial properties over 20 years is roughly 9.5%, a considerably solid return over time.

The potential growth in the value of a commercial property is exceptional. Its value is bolstered by the income it creates, which can be raised with professional management and renting it out as the premises for certain profitable businesses.

commercial property market trends

The top 14 commercial property market trends to watch in 2023

Industry players, notably investors, should be aware of the commercial real estate market trends in 2023, as it helps them make more informed decisions.

The following are some of the most significant trends to take note of.

1. Return to work and hybrid work

Like the rest of the country, the commercial real estate industry is encountering unexpected challenges, with work-from-home syndrome still one of the most pressing concerns for most CEOs. Because of the COVID-19 pandemic, hybrid work environments have become increasingly crucial in meeting the changing job requirements and the associated shift in corporate culture.

Due to these new developments, a major change in the corporate real estate sector (also known as the CRE market) has altered everything from the preferred office space style to the square feet required to house an on-site workforce.

2. Increasing year-over-year sales due to PropTech

The commercial real estate market has been revitalized by the progressive lifting of restrictions and the return to the office that followed the pandemic. Today, investors’ attention has shifted to multi-family housing and apartment buildings, which has been buoyed by new PropTech.

According to Morning Star, an online platform monitoring stock markets and economy news, multi-family market sales were at an all-time high of $277.2 billion in the first quarter of 2022, driven by rising rents, a lack of available homes and easier access to property online. Commercial real estate investors will ignore this PropTech revolution at their own peril.

3. Supply chain disruption

Striking a balance between supply and demand is needed to maintain economic stability. Despite the growth of e-commerce in the wake of the 2020 pandemic, the global supply chain wasn’t ready to meet the sudden increase in demand, disrupting the processes that link the chain.

According to the U.S. Chamber of Commerce, because of the workforce and material shortages that accompanied the drop in supply chain work, 88% of construction contractors had difficulty finding skilled workers in the second quarter of 2021, leading to over a third of them turning down work at least once.

Vacant retail space in older buildings caused by this disruption presents a growing opportunity for leasing and repurposing.

However, it also presents a new challenge for commercial real estate investors who must make new location decisions and push back development schedules for several months due to supply chain issues.

4. Commercial multi-family recovery

Since there will always be a demand for reasonably priced rental units, investors see multi-family properties as a safe bet.

The slow recovery from the pandemic has hit multi-family real estate the worst, but the extent to which this is true varies widely by city, sub-market, and neighborhood. According to a report by JPMorgan, commercial multi-family real estate is predicted to do well in 2023 as the highest performing of all asset classes.

5. Boost in the PropTech revolution

In 2021, PropTech, or property technology, was already on an upward trend, which continued strongly throughout 2022. The construction industry stands to benefit greatly from the new technologies.

Using the internet of things (IoT), for example, commercial real estate investors can provide a better experience for tenants while also increasing their profitability. Yet, despite the proven importance of technology in the wake of the pandemic, commercial real estate is lagging behind other financial markets in adopting such measures.

As a result, many commercial real estate investors looked to increase their investments or collaborations with PropTech companies last year. This trend is expected to continue in 2023, as KPMG for Financial Services reported.

6. Investors will continue to make faster decisions

The real estate industry has benefited from the PropTech revolution since it has introduced cutting-edge technology and made it easier for investors to gain the knowledge and data they need to make informed decisions. This new approach to making decisions is more efficient than the old methodology.

7. Green goals and ESG requirements

Concern for the environment and the desire to preserve it influences every area of modern life, including the commercial real estate market. For this reason, governments around the world pass laws to deal with the environmental, social, and governance (ESG) concerns that regulate the energy efficiency of real estate assets.

Tenants and investors in the United States, where environmental consciousness is on the rise, are less inclined to consider renting or investing in commercial real estate that isn’t energy- and resource-efficient.

8. City office rents rebound

Following the lifting of pandemic restrictions, people who had fled to the suburbs for safety and better living conditions began returning to the main cities.

Office property asking rents, for example, were up 1.3% year-over-year throughout the country in Q2 2022 as the economy started to recover and workers returned to the office.

9. Cybersecurity interruptions

The commercial real estate industry is not immune to the pervasive influence of modern technology, which has simplified everyday living. Investors in the sector have traditionally relied heavily on data to make key decisions.

Still, with the advent of new technologies, these records are at risk of being compromised by malicious ransomware, which can result in devastating financial losses. As a result, investors in commercial real estate should keep cybersecurity in mind as one of the most important developments to watch.

As information moves from one system to another and from one department to another, it is crucial that all of these transfers occur securely, for which they need robust cybersecurity measures.

10. Increase in healthcare commercial properties demand

After the pandemic and the subsequent increase in the need for preventive medicine research, investments in healthcare have emerged as one of the top commercial real estate trends.

The growing interest in life sciences increases the demand for commercial properties suitable for healthcare purposes.

11. Retail is coming back

During the pandemic, online sales boomed, causing a fall in foot traffic for traditional businesses worldwide. However, despite the huge growth in the online sales sector, businesses are increasingly embracing an omnichannel approach that combines online and offline channels.

Therefore, commercial real estate might witness increasing demand in 2023.

12. Shield against inflation

Inflation has become the primary fear of investors worldwide. In addition, the rising cost of constructing new buildings has reduced the number of inexpensive structures currently on the market.

Consequently, investors will seek the most practical investment to meet such situations. Commercial real estate can protect them from inflation because most commercial property sectors are built to include annual rent increases. Multi-tenant assets with a high ratio of labor and replacement costs tend to increase in value when inflation occurs.

13. Tighter regulations cause lower financing

The commercial real estate industry is seeing the effects of persistently high inflation in areas including building costs, operating expenses, rent, vacancies, and debt. Moreover, banking and trust company regulations have tightened, which has driven up interest rates and reduced CRE investors’ access to financing options.

According to The Globest, the premier online platform for CRE information, cap rates will increase by 1.0% to 2.0%, which will heavily affect the commercial real estate industry.

14. Creative solutions to secure funds: soft deposit financing

As a result of increased lender scrutiny and the difficulty in obtaining cash from traditional sources, like banks, commercial real estate investors are constantly on the lookout for new sources of liquidity. When faced with limited options, investors may even turn to capital recycling (disposing of assets to fund new acquisitions).

To avoid situations like this, new solutions are needed to meet these demands. The emergence of internet lending platforms has made it possible to get a loan quickly and easily, often in less than 24 hours.

DuckFund is a rapidly growing digital finance platform that aids commercial real estate investors by providing fast and inexpensive soft deposit financing, eliminating the need for personal capital.

Applying for a soft deposit through Duckfund takes less than two minutes, offers a commission of 2% (of the deposit size monthly), and requires only 24 hours of due diligence. To simplify matters, Duckfund will form a limited liability company (LLC) on approval of an application and enter into a call option agreement with the buyer in exchange for a percentage of the LLC’s membership.

The LLC then deposits the funds into an escrow account and signs the real estate purchase and sale agreement. If the buyer wants to move forward with the transaction, they will send the deposit to Duckfund in exchange for a full ownership interest in the LLC. Afterward, the buyer will become the primary party to the agreement to purchase and sell. If the purchaser reneges on the arrangement, the transaction will be called off and the deposit will be returned to Duckfund.

[Still trying to figure out where to get funds quickly and easily for a commercial property you found on the market? Duckfund offers affordable soft deposit financing for your commercial property investment with high approval rates, low-interest rates, and easy applications.]


  • Commercial real estate investments can provide a wide range of opportunities with substantial returns.
  • It is crucial to keep up with the current commercial real estate trends to plan for future investments and make sound choices.
  • Investors in commercial real estate face a significant hurdle in securing financing in light of rising interest rates and stricter restrictions.
  • Emerging online platforms like DuckFund offer soft deposits financing to facilitate commercial real estate deals.
Register and apply for a loan in less than 2 minutes

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