Inflation affecting business real estate decisions

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ATLANTE, September 8, 2022 /PRNewswire/ — A new survey by CoreNet Global, the leading association of commercial real estate professionals, has found that the highly inflationary environment is impacting commercial real estate decision-making .

According to the poll, 62 percent say the current rate of inflation is impacting real estate decisions.

From these:

  • More than half, 54%, consolidate locations
  • Forty-two percent are reducing the size of the leases they sign
  • Forty-one percent are looking for more profitable buildings and lower rents
  • Thirty-seven percent are signing fewer leases
  • 34% say annual escalations are 100 basis points higher than normal

While nearly 60% of respondents say their business is in growth mode, 75% expect the U.S. economy to enter a recession by the end of 2023, and 72% expect the global economy goes into recession by the end of 2023.

Forty-four percent say that compared to before the pandemic, their overall corporate real estate footprint has shrunk; 21% say it has increased and 34% say it has stayed the same. By 2025, 39% expect the size of their commercial property portfolio to increase, 42% expect it to decrease and 19% say it will stay the same.

The survey was conducted in June-September 2022 and gave 175 responses from all regions, including North America, Europe, Asia and the Middle East.

About CoreNet Global

CoreNet Global is a non-profit association, headquartered in Atlanta, Georgia (United States), representing nearly 10,000 executives in 50 countries with strategic responsibility for the real estate assets of large corporations. The organization’s mission is to advance the practice of corporate real estate through professional development opportunities, publications, research, conferences, designations and networks in 45 local chapters and groups of networks globally. For more information, visit www.corenetglobal.org or follow @CoreNetGlobal on Twitter.

SOURCECoreNet Global

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