Is a Bubble Forming in Commercial Real Estate?


  • The big question on many investors’ minds – “Is a bubble forming in CRE?”
  • From a macro level, RetailUrban Office and Suburban Office are clearly not in a bubble
    • –  Price growth has been moderate, and fundamentals have kept pace with price gains
  • While Apartment values have climbed considerably, historically strong vacancy and rent growth support strong appreciation – Structural housing shortage also a strong tailwind
  • Similarly, Self-Storage price gains are backed up by record property performance
    • –  Vacancy at all-time low and rent growth is strong
    • –  COVID helped quell overdevelopment risk, keeping supply and demand in balance over the short-term
  • Even Industrial, where exuberance has been strongest, is likely not in bubble territory
    • –  Vacancy, rent growth and NOIs support the aggressive price appreciation
    • –  eCommerce and supply chain disruptions provide long-term tailwinds to the industry
  • Investors should closely monitor the supply and demand outlook for the next 3 to 5 years


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