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