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BUILDING INSIGHTS: Anticipated dynamics in commercial real estate in 2024

Glenn Ebersole

Challenges and opportunities were created in 2023 as the commercial real estate market, economy and innovation continued to evolve. Commercial real estate market professionals need to work to navigate the disruptions that will occur in 2024 and develop solutions and a better understanding of the impact of these dynamic changes.

The commercial real estate market will continue to exhibit an extraordinary and dynamic level of unpredictability in 2024. Some of those major dynamics include:

Geopolitical unrest and vitality of global economic health

There will be an abundance of issues that will impact the risks associated with the commercial real estate market. The real estate market is facing a turbulent economy and sagging office sector, which are exacerbated by inflation, slowing GDP growth, high interest rates, bank stress and rising geopolitical concerns involving Russia, China and elsewhere.

Hybrid work

The future look of hybrid work is still evolving with themes of flexibility, agility, productivity and space reduction. The Covid-19 pandemic created permanent shifts in where work is done, which has dramatically altered the environment of the office sector and central business districts. Employers are recognizing that office space needs to become an environment where workers have an incentive or real reason to look forward to return to the office.  Otherwise, the owners will need to start thinking about alternative strategies exploring reuse of obsolete office buildings.

Labor shortage

Everyone, everywhere, in nearly every sector is reporting difficulty in finding skilled, willing and able workers. The labor shortage has grown for a couple of reasons: An aging population of Baby Boomers who left the workforce in what became known as the “Great Resignation,” and new employment trends among young professionals with unique views about the workplace.


A strong infrastructure is needed to support a strong economy. The nation’s Infrastructure is a serious concern with staggering costs to repair and upgrade the aging infrastructure. The American Society of Civil Engineers (ASCE), grades the United States infrastructure annually and has been handing out sub-par grades in the C and D range for the past 20 years (with an overall grade of a C- in its most recent 2021 report card).

Economic ‘Perfect Storm’ in commercial real estate

An economic “Perfect Storm” has evolved from the convergence of the economy, interest rates and inflation following the recent era of “free money,” which ended abruptly and was followed by an intense pace of Fed rate hikes. The federal funds rate is now at its highest level since 2007. Owners, investors and developers across the commercial real estate market are feeling the effects of higher capital costs, tightened lending and the looming $1.5 trillion U.S. debt that will mature by the end of 2025.

Closing thought

“Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.”  — Russell Sage, American financier, railroad executive and Whig Politician from New York.

Glenn Ebersole is a registered professional engineer and is the Director of Business Development at JL Architects, a West Chester-based architectural firm serving clients locally, regionally and nationally. He can be reached at gebersole@jlarchs.com or 717-575-8572.

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