With a challenging real estate market anticipated for the year, where should restaurant companies look for growth?
Economists from real estate services firm CBRE anticipate resilient consumer spending will counter economic headwinds in 2024, including high interest rates and near recessions in Europe and China.
“This anticipated economic bottoming out and initial rebound will affect all sectors of commercial real estate,” the company said in December. “CBRE sees lending remaining tight, property values declining further in the first half of the year before activity rebounds in the second half, a topping out of office vacancy, and a wave of multifamily construction.”
U.S. office vacancy will peak at 19.8% in 2024, up from 18.4% in Q3 2023 and 12.1% at the end of 2019. Office-leasing activity will revive slightly in 2024 but remain significantly below pre-pandemic levels, CBRE said. Companies seeking blocks of office space of less than 20,000 square feet will account for the bulk of leasing activity. Office construction will slow to the lowest level since 2014, raising the prospect of a shortage of available Class-A space later in the year.
CBRE broke down data including population, population growth, and median incomes for individuals and households, and identified five U.S. metropolitan areas that may be primed for growth. Check them out in this gallery, and read more about the real estate market in 2024 here.