One neat thing about commercial real estate is that it is not just one single market. There are so many varieties of commercial real estate and each has its own life. Below is a quick overview of how a variety of commercial markets are looking as we head into 2021. The categories below echo CBRE’s chosen categories in their market outlook for 2021 and include; the flexible office market, storage facilities, retail, industrial/logistics, hotels, data centers, life sciences, cold storage, senior housing, and student housing.

Flexible Office Market

Co-working spaces like WeWork saw a drop in membership at the start of the pandemic. This happened in China in January and the US and Europe in March. Since China has had a much stronger recovery from the pandemic we are able to see how they are returning to work to make predictions about how the western world will do the same. While China has not returned to the pre-pandemic levels of using these types of spaces they have made a significant jump back up to nearly that level, indicating the demand for flex workspace will return as workers return to some sort of office environment.

Corporations are also expected to start using flex space in new ways. They can save money on real estate by allowing work-from-home, but also having a presence at a co-working location so employees can get out of the house sometimes too. They can also use these spaces to test the waters of different locations and set up office space in a new city without engaging in a long-term lease. The flex-space industry has had the opportunity to learn from the pandemic and adapt to the changing atmosphere of the office place.

Storage Facilities

This market, like most others, felt a hit in March. However, as people started moving again and creating new spaces within their homes the need for storage has gone back up. It’s a stable industry that currently has a high occupancy. One good thing about that is that most people use their storage unit for longer than they originally intend. However, the occupancy rates could go back down and if there are more units built before that happens they have the potential to run into a glut of available space. Right now that does not look like it will happen in the foreseeable future.


Retail has been one of the hardest hit property types in the commercial sector. It had already been struggling due to the growth of e-commerce over the past years. Shutting down most of the industry due to COVID caused major bankruptcies among categories that were already struggling, such as department stores and places that aren’t designed to function remotely like restaurants and gyms.

While traditional malls are struggling retail outlets such as strip malls with a grocery anchor have remained stable, since the anchoring store is typically an essential business. Investors have been and will continue to reimagine these buildings. For example, many are being converted to office or industrial spaces.


Due to growth in e-commerce and a new need to keep more inventory on hand the industrial real estate has been seeing growth. A demand for fulfillment centers closer to the consumers is on the rise. This market is expected to remain strong for the foreseeable future as demand for e-commerce remains and the desire to streamline the logistical processes of moving product continues.


Hotels were hit especially hard and Chicago is a city that heavily relies on group and business travel for its travel industry income. The luxury and upper upscale hotels were hit the hardest and will have the longest recovery. Overall hotels are expected to recover to pre-COVID levels by 2023, but the city of Chicago plus the hardest hit categories are expected to take even longer to recover, possibly not until 2025. It is predicted that future business will rely much less on travel than it has in the past and people will travel more often for pleasure than for business.

Data Centers

Data Centers were already seeing growth pre-pandemic and the increase in usage from remote living has only helped. “Investor interest in the data center sector has increased based on the success of the five core data center REITs, which have recorded more than 28% revenue growth year-to-date” -CBRE. Chicago has seen a growth of 96.2% in inventory since 2015. Investors building data centers look for locations that can provide affordable clean energy.

Life Sciences

COVID has fueled the growth of this sector including labs and biomanufacturing. The CBD market has also helped this market grow. However, since much of the growth is due to COVID it is hard to tell if it is sustainable or if it will taper off after a vaccine is widespread and the pandemic is under control.

Cold Storage

Like life sciences this category has been growing due to the pandemic. Much of the growth is from e-commerce venturing into the grocery business, so it could be more sustainable. However, cold storage facilities require specialized knowledge of the industry and refrigeration needs and they have a high overhead cost from large electricity consumption. While it is a growing industry it requires expertise to reap the benefits of investment.

Senior Housing

The demand for senior housing dropped due to the pandemic. A full recovery isn’t expected until 2022 and financing could be difficult due to COVID risk. However, Boomers are reaching the age at which they would typically be interested in this type of housing which boosts investor’s interest in it.

Student Housing

Providing students return to campus by fall 2021 this sector could strengthen. The student body is expected to be larger with international students returning as well as students who took a gap year joining the next incoming class.


Licensed since 2005 Molly Heyen works with clients who utilize real estate for business purposes. Whether it is space from which to run their own business or investment property. She works closely with her clients to evaluate the numbers to make sure the location makes the most sense for their use and the property can serve its purpose in building wealth. When she’s not digging through real estate trends you can find her building race cars with her husband at the do-it-yourself auto shop they own and operate. Learn more at or connect with her on LinkedIn,

Content provided by Women Belong member Molly Heyen