How the Labor Shortage Shapes Commercial Real Estate Trends

Role of Labor Markets in Return-to-Office Decisions

• Health concerns were original reason for remote work, but worker preferences are now the biggest hurdle
• Strong job gains continue to support consumption and CRE space demand
• The U.S. currently has a substantial labor shortage which drives continued remote work trends

What it Could Take to Resolve the Labor Shortage

• Overall unemployment rate is 3.7% and just 1.9% for college educated workers
• Severe shift necessary to re-align employment trends

What this Means for Commercial Real Estate?

• Remote work benefits suburban CRE space demand
• Return-to-office would boost urban CRE demand
• Lingering labor shortage a headwind for service staff dependent CRE like hotels and seniors housing

*Through July, Unemployed through August
Sources: Marcus & Millichap Research Services, BLS

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