Post-Pandemic Behavior: How It Will Impact Cities’ Commercial Real Estate (CRE)

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The pandemic has had a lasting impact on commercial real estate (CRE) and cities are feeling the effects. A recent report by McKinsey, entitled “Empty Space and Hybrid Places: The Pandemic’s Lasting Impact on Real Estate,” suggests that demand for urban core office and retail space will continue to decrease in the coming years. Analyzing what they called “superstar cities,” which include Beijing, Houston, London, Paris, New York City Munich San Francisco Tokyo; McKinsey found that home prices grew more slowly than in suburbs or other cities while percentage of vacant office and retail space increased since 2019. To help improve demand for both office and retail spaces going forward solutions such as mixed-use development at the neighborhood level constructing adaptable flexible space neutral-use buildings designing multi-use modular floor spaces were suggested by experts. It is clear that CRE must rethink their uses if these superstar cities want to maintain vibrancy post pandemic era