Spring 2024 Issue

From the Editor: CRE Remains Steadfast Despite Challenges

By: Jennifer LeFurgy, Ph.D.

Jennifer LeFurgy

The North American economies, remarkably, avoided falling into recession in 2023. Although challenges in the office markets persist, commercial real estate remains a vital part of economic growth. Last year in the U.S. alone, the development and operations of commercial buildings contributed $2.5 trillion to GDP, generated $881.4 billion  in personal earnings and supported 15 million jobs.
One of the most interesting, but often trickiest, solutions to dealing with obsolete properties is adaptive reuse. This issue of Development contains several articles on how outmoded and abandoned single-use developments were reimagined into environmentally friendly, mixed-use projects with affordable housing components.
Among the featured projects is Highland Bridge, a former Ford assembly plant in St. Paul, Minnesota. The Ryan Companies is transforming the 122-acre site into a vibrant new community with housing, retail, offices and civic space. 
Speaking of the Twin Cities, I hope to see you at the National Forums Symposium  in Minneapolis on May 8-10!
Stay connected,
Jennifer LeFurgy, Ph.D.

In Brief

Notable facts and figures on the state of the commercial real estate industry, culled from media reports and other sources.



The 2023 unemployment rate as predicted by S&P Global. Unemployment that high would have slowed the economy to a halt, according to Propmodo. The 2023 U.S. year-end unemployment rate was 3.5%.

Industry Outlook


The amount CBRE expects total investment volume to decrease year-over-year in 2024, after plummeting 45% in 2023. “Lower levels of investment activity are directly tied to expectations that the 10-year Treasury yield will remain elevated throughout the year. This will lead to some distress for Class B and C office buildings and for certain assets that were highly leveraged using floating-rate debt amid ultra-low rates. However, CBRE Research forecasts an average 10-year Treasury yield of 3.3% from 2025 to 2028, which will support investment activity and asset prices over the medium term.”



The average office vacancy rate in U.S. cities at the end of Q4 2023, according to Moody’s analytics, making it the highest since 1979.

$4 Billion

Trepp’s estimated amount of the $20 billion in office loans that could become delinquent in 2024.


The number of office buildings in Calgary, Alberta, slated for conversion into housing. The first project, the $38 million conversion of an underused 10-story office building into 112 apartment units, is nearly complete and expected to open in early 2024.


The percentage of companies that will require their employees to go to the office at least once per month in 2024; 75% will require employees to work from the office weekly, according to a survey of 800 business leaders commissioned by ResumeBuilder.com. The same survey found that 41% of companies plan to upgrade their office space as an incentive to return employees to the office.



The industrial vacancy rate, according to Cushman & Wakefield’s Q4 industrial report for 2023. That represents the highest vacancy rate since the third quarter of 2020, although it is 120 basis points below the long-term 15-year average of 6.4%, as reported by GlobeSt.com.

19.3 Million

The estimated number of square feet required by electric vehicle (EV) companies in North America, according to JLL’s 11th Annual Industrial Tenant Demand Study. “The growing demand for clean energy and the rise of EV and batteries have contributed to an increase in demand for manufacturing facility requirements. In fact, demand for these facilities has more than tripled since 2018.” 


1.2 Million

The number of multifamily units under construction. According to the 2024 U.S. multifamily outlook report from Yardi Matrix, deliveries are expected to top 500,000 units in 2024, with concentrations in fast-growing markets in the South and West. “However, the rise in construction financing is putting a lid on new starts, so 2024 is expected to be a peak year for deliveries.” 

Most Popular From Winter 2023/2024

  1. Data Center Real Estate: Challenges and Opportunities in the Digital Age” 
  2. What’s Working and What’s Not Working in CRE” 
  3. Navigating the AI Revolution: A Blueprint for Real Estate Executives” 
  4. Actively Seeking Opportunities for Leadership Growth
  5. NAIOP Research Directors Discuss an Industry in Transition” 

Future NAIOP Events

  • National Forums Symposium, May 8-10, 2024, Minneapolis
  • I.CON East, June 5-6, Jersey City, New Jersey
  • CRE.Converge, Oct. 8-10, Las Vegas
For the most current information on upcoming NAIOP events, both virtual and in-person, visit naiop.org/Events-and-Sponsorship/



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