Glass is joining the list of building materials in short supply. A range of industries, including shower door manufacturers and window installers, are reporting glass shortages.

Nearly two-thirds of home builders said that windows are their biggest material shortage, according to a recent survey from John Burns Real Estate Consulting. Rounding out the top four in additional shortages are umber, engineered wood products, and concrete, according to the survey.

Window delays could range from four to 15 weeks, though some are stretching even up to 45 weeks, according to John Burns Real Estate Consulting.

An international logistics backlog is leading to shortages of glass and other materials, experts say. Many glass manufacturers have moved operations overseas. China, Mexico, and India have traditionally exported the most glass and stone to the U.S. The glass shortage has especially affected the supply of glass jars and bottles, driving up the price of some grocery products lately.

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More brick-and-mortar retail is needed. Store openings are outnumbering closings for the first time in four years, according to an analysis of more than 900 chains by the IHL Group, a research firm.

The largest amount of growth is coming from mass merchants, food, drugs and pharmacy, and convenience chains, The Wall Street Journal reports.

E-commerce is also driving a lot of the increase in the physical footprints of stores as a greater number of online and store experiences become more closely linked. Digital businesses are relying on physical stores for easier shipping or for customer pickup or returns.

E-commerce had been blamed for physical stores closing. The nation’s largest chains closed 6,573 more stores than they opened last year.

Property owners have been offering incentives to win more tenants back. Companies took notice. For example, company officials with the clothing company Levi Strauss & Co. told The Wall Street Journal that their company is securing space for prices 15% less than pre-pandemic levels. They plan to open 100 U.S. stores over the next five years.

“The majority of consumers like to engage with us in our stores,” Harmit Singh, Levi’s finance chief, told The Wall Street Journal.

Dick’s Sporting Goods is opening more than 800 stores under its House of Sport, Public Lands, and Golf Galaxy brands that include more experience activities within them, such as batting cages, rock climbing walls, and putting greens.

Also, digital-first companies want more of a physical footprint. Amazon is planning to open its own department stores.

Overall, retailers are opening 4,361 more brick-and-mortar stores in 2021 than they closed.

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T3 Sixty releases its annual Swanepoel Power 200 list, revealing the movers and shakers in the industry.

Real estate leaders and brokerage executives are demonstrating a powerful influence on the housing market, as their impact extends to all corners of the country.

T3 Sixty, a real estate consulting firm, annually releases its Swanepoel Power 200, known as the SP 200, which ranks the residential real estate brokerage industry’s executives and leaders for their influence on the profession.

For 2023, Gino Blefari, president and CEO of HomeServices of America, was named the most powerful and influential person of the year. Blefari was credited for his “steadfast leadership” of HomeServices of America since 2019 and for keeping the “most profitable national real estate brokerage on a consistently profitable track.”

Gary Keller, the founder and executive chairman of Kwx, ranked number 2 on the SP 200 for 2023. Keller Williams Realty is the largest franchise brand by sales volume, transaction sides and agent count as well as the nation’s largest privately owned real estate company, T3 Sixty says.

The SP 200 ranks professionals by their achievements over the past 18 months, the size and reach of the companies they lead and their overall influence on the industry.

“These exceptional leaders have a few things in common: a keen eye for hiring talent and a diligent focus on sustainable growth,” says Stefan Swanepoel, executive chairman of T3 Sixty.

The top 10 on 2023’s SP 200 list are:

1. Gino Blefari, president and CEO, HomeServices of America
2. Gary Keller, founder and executive chairman, Kwx
3. Glenn Sanford, founder and CEO, eXp World Holdings
4. Ryan Schneider, CEO and president, Anywhere Real Estate
5. Richard Barton, cofounder and CEO, Zillow Group
6. Susan Yannaccone, president and CEO, Anywhere Brands
7. Hoddy, Helen and Hoby Hanna, company leaders, Hanna Holdings
8. Robert Reffkin, co-founder and CEO, Compass
9. Andy Florance, founder and CEO, CoStar Group
10. Phil Soper, president and CEO, Bridgemarq Real Estate Services

Several NAR Leaders Make the List

National Association of REALTORS® executives and leaders also scored several spots on the SP 200 for 2023, including:

• Bob Goldberg, NAR’s CEO (number 13)
• Katherine “Katie” Johnson, NAR’s general counsel and chief member experience officer (number 35)
• Kenny Parcell, NAR’s president (number 51)
• Shannon McGahn, NAR’s chief advocacy officer (number 55)
• Lawrence Yun, NAR’s chief economist (number 96)
• Mark Birschbach, NAR’s senior vice president for strategic business innovation and technology (number 116)
• Dave Garland, managing partner of Second Century Ventures (number 196)

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As the pandemic wanes, companies are weighing alternative setups to their corporate office structures, including “hub and spoke” and “hubquarters” models. That may prompt many changes in commercial needs moving forward and what companies may be looking for.

The hub and spoke model is based on the use of a central office and smaller satellite offices, while hubquarters involve a network of smaller locations. This setup, which tends to be used for collaborative and independent work, may include a distributed cluster of small offices, co-working spaces, and remote locations, the Commercial Observer reports.

Amazon has already set the stage for more hubquarters locations, opening offices in 17 cities in North America and planning to open six more. Google has also announced it is weighing adding smaller hub offices to offer its employees greater flexibility, the Commercial Observer reports.

Hubquarters may help companies cut costs. They take up less space to operate than a single large headquarters, and maintenance and utility costs are lower, too.

Companies are considering options as they look to bring more of their workforce back to the office as measures to manage the pandemic continue. While a majority of the workforce continues to work remotely, workers are showing some eagerness to return, looking to more easily collaborate with coworkers. The Commercial Observer cites a recent survey that found that satisfied employees in the U.S. are twice as likely as unsatisfied employees to say that collaboration makes them feel more productive. More than half say they collaborate with five or more people on any given day.

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Flood risks are increasingly posing a risk to commercial real estate, and a new report cautions the sector to be prepared.

About 730,000 retail, office, and multiunit residential properties face potential risk annually of flood damage, according to a new report from the First Street Foundation, a nonprofit research group. Damage from flooding could cause $13.5 billion in damages in 2022 and increase to $16.9 billion by 2052, according to the report, which focused on sea-level rises and flash flooding events. First Street partnered with Arup to evaluate flood risks on commercial properties in the U.S.

“It absolutely will have an impact on the value of these structures because you’re increasing the risk and the known risks to these buildings, which then has a negative impact on the value of them today,” Matthew Eby, founder and executive director of First Street Foundation, told CNBC. “We have companies like Nuveen or Morningstar or these large institutional investors that are looking at our data to understand what’s at risk today and over that period of ownership. How do you plan against these things or ensure that you’re buying into the right commercial real estate assets?”

Eby says that once businesses understand the risks they can take steps to try to mitigate those risks to their properties and potential costs involved.

Last year, realtor.com® added a flood score for residential houses in the U.S. to both for-sale and off-market properties listed at its site. The flood risk data is from both Federal Emergency Management Agency flood zone maps and Flood Factor. The score can be used to help homeowners determine what properties may need flood insurance, even if their lender doesn’t require it. Read more: Realtor.com® Adds New Flood Risk Tool to Listings.

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Retail space is in demand, and prices are rising. Net absorption of retail space during the third quarter reached the highest level since the fourth quarter of 2017, the National Association of REALTORS® reports. The biggest demand has been for general retail and neighborhood space.

New retail supply has been low throughout the year. That has led to higher prices due to strong demand. Retail asking rents climbed 2.7% over year ago amounts. Strip retail centers have posted the highest year-over-year increase of any retail property at 3.4%, NAR reports. “Power centers”—shopping centers that are usually anchored by tenants like home improvement, discount departments, and warehouse clubs and then have smaller tenants mixed in—have seen significant growth. Also, smaller shopping centers such as neighborhood and strip centers have seen increasing demand throughout the year, Brandon Hardin, an NAR research economist, writes at the association’s Economists’ Outlook blog.

The markets with the strongest year-over-year gains in asking rents were mostly centered in the Midwest, Southwest, and Southern metros, according to CoStar commercial data. The standout markets include Akron, Ohio; Las Vegas, Nev.; Tulsa, Okla.; Salt Lake City, Utah; Fort Lauderdale, Fla.; Jacksonville, Fla.; Atlanta, Ga.; Nashville, Tenn; Tampa, Fla.; and Cincinnati, Ohio.

Still, malls remain vulnerable, Hardin notes. Net absorption had been improving in the third quarter but started to reverse as of Dec. 9 as a new strain of COVID-19 sparks fears across the country. Mall vacancies have increased by 8.4% over the past year, and asking rents have risen 2.3% year-over-year, NAR reports.

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A growing number of investors seem less deterred by high prices, jumping on opportunities from demand for rentals.

Single-family purchases made by investors are surging as they see opportunities in the rapid growth of home prices and demand for rentals. The Golden State, shunned by investors for some years, is seeing a strong return.

“After a decade of moving away, investors are coming back to California,” writes Thomas Malone, an economist at CoreLogic, in a recent analysis.(link is external) Of the 11 metro areas with the highest investor shares for the third quarter, four were in California, four are in the South, and three are in the Mountain-West regions. “These are the markets where iBuyers have focused,” Malone adds. “California was prevalent in the top investor shares at the start of the 2010s when there were many foreclosures in the wake of the Great Recession. More recently, the South and the Mountain-West have had the highest investor rates. The California rise is likely due to large investors, who seem less deterred by the high prices found in the area.”

Large investors—those who retain 100 or more properties—have greatly increased their market share, CoreLogic reports. Of all investor purchases made in June 2021, a quarter were made by large investors, a 12% yearly percentage increase.

Overall, the highest investor share of activity in the third quarter, according to CoreLogic are:

• Atlanta-Sandy Springs-Roswell, Ga.: 42.8%
• San Jose-Sunnyvale-Santa Clara, Calif.: 42.6%
• Phoenix-Mesa-Scottsdale, Ariz.: 38.8%
• Los Angeles-Long Beach-Anaheim, Calif.: 38.4%
• McAllen-Edinburg-Mission, Texas: 36.6%
• Las Vegas-Henderson-Paradise, Nev.: 35.2%
• San Francisco-Oakland-Hayward, Calif.: 34.6%
• El Paso, Texas: 34.3%
• Memphis, Tenn.-Miss.-Ark.: 33.9%
• Salt Lake City: 33.9%
• Riverside-San Bernadino-Ontario, Calif.: 33.6%

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Sixty-nine percent of commercial real estate brokers say they made more money in 2021 than in 2020, according to the latest Apto National Broker Buzz Poll conducted in December 2021. They’re even more optimistic about this year.

Commercial real estate has posted a dramatic recovery ever since the beginning of the pandemic. 2021 marked a big turn for the sector, notably in the multifamily and industrial spaces, as well as a demonstrated resiliency within brick-and-mortar retail, according to the National Association of REALTORS®’ December 2021 Commercial Market Insights.

In fact, investment acquisitions helped the commercial sector in 2021 surpass pre-pandemic levels. “This strong foundation of recovery puts the commercial market on pace for sustained demand for the commercial and investor sectors in 2022,” NAR says in its report.

That’s translated into more business for commercial real estate practitioners. Sixty-six percent of brokers say they completed more transactions in 2021 than in 2020. What’s more, 60% of brokers expect 2022 to be an even better year in profitability, according to the Apto survey.

“The poll results reflect the overall economy’s strength this past year, which translated to most brokers making more money, especially those focused on industrial or multifamily real estate,” says Tanner McGraw, a former CRE broker and the founder of Apto, a commercial real estate broker software company. “But the tide is turning for retail real estate and high-quality office. As we know, brokers can do well whether owners and investors are buying or selling, or whether tenants are adding or shedding space. It’s movement that matters, and we saw considerable business activity in the economy in 2021.”

CRE Sectors to Watch

The multifamily sector, in particular, had a historic year in 2021. Vacancy rates hit a record low in December 2021 while the median asking rent growth reached a record high of 11% year over year, NAR reports. Rental demand has soared since the pandemic began as double-digit home price growth has priced out some aspiring homeowners and turned them into renters.

Further, the industrial property market posted a record year, experiencing a boon due to the continued growth in online shopping. Nearly 700 million square feet of space has been absorbed since the pandemic began, and rents have soared to record highs of 8.4%, NAR reports. Meanwhile, vacancies have fallen to all-time lows.

2022 Outlook

NAR expects demand for commercial real estate to strengthen in 2022, despite an uptick in interest rates largely expected this year. Persistent strong demand and supply will keep commercial real estate strong, NAR says.

The multifamily sector is expected to stay robust. Also, NAR researchers are optimistic about brick-and-mortar continuing to make gains as it solidifies its place in complementing online shopping fulfillment. Retail brick-and-mortar market growth is expected to be largely driven by smaller shops, such as neighborhood centers, strip centers, and single-tenant stores.

Further, the office market will likely continue to see an increase in net absorption as more workers return to the office, even if only on a hybrid work schedule.

Seventy-five percent of brokers who work in an office setting say they have returned to the office following the holidays, according to the Apto survey. “It’s nice to see brokers back in the office leading the way as real estate consumers,” McGraw adds. “The new coronavirus variant is posing a last-minute threat to office returns, but the desire and intent to be in the office is very apparent based on brokers’ response to our survey.”

Source: National Association of REALTORS®, December 2021 Commercial Market Insights

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