How Has Commercial Real Estate Recovered from COVID in 2022?

A three-story apartment building

It’s been more than two years since COVID-19 hit the shores of the United States. Among many other issues, the pandemic threw the commercial real estate industry into a state of uncertainty. Offices emptied out indefinitely, restaurants closed, retail stores had to shift to an online model and people fled apartment buildings in big cities to return to their hometowns. But has this trend happened in Auburn, Opelika, and the surrounding region?

Retail Stores

Early in the pandemic, brick and mortar stores suffered as people did most of their shopping online. But over time, people have begun to shop in-person again with some areas actually doing better than before the pandemic. Even as the e-commerce industry grows, recent trends show that brick and mortar is far from dead, especially in niche markets, like Downtown Auburn, Opelika, and Columbus. Specialty restaurants and retail stores have remained open with very few closures in the region. There appears to be relatively no change in retail and the only closures were resulting from businesses that were struggling prior to the Pandemic. Further, there appears to be no change in vacancy rates and rental rates have continued to increase.

Multi-Family Dwellings

Early in COVID, rent fell in major cities as demand for new units fell. Now, vacancy levels are lower than they were in 2019. Because of the increased demand, rent is rising at record highs. Experts expect this trend to continue despite interest rate hikes due to a nationwide shortage of housing units. The Auburn University Student Housing Market continues to exhibit extremely high occupancy rates and construction levels. According to CoStar, Inc., Auburn still has an average rent of $1,464 per month and an average vacancy of 7.5%. The investor market appears to have stalled after record-high sales prices. Most of the multifamily opportunities for investors have been sold and development has slowed down as interest rates have increased. The duplex, quadraplex, and small student house market has continued to increase to record highs as parents purchase these properties to avoid paying record high rents and to take advantage of low interest rates. Return on and of investment for these types of assets seems limited as with increasing interest rates, there is limited upside to these investments.


Industrial in eastern Alabama exhibits record high occupancy rates, sales price, and rental rates. This is due to extreme shortages of supply chain buildings in the region, which have been mostly fully “gobbled” up by Tier 1, 2, and 3 automotive suppliers. This lack of industrial space had “bled” into secondary markets, such as Phenix City, Lafayette, and rural areas of Alabama as manufacturing and distribution companies seek areas to store product. Construction in this sector has remained extremely low with high construction costs limiting new supply. Thus, existing industrial space owners have reaped the benefits of huge demand for their spaces.


Commercial office buildings were among the emptiest places in America in 2020 in large cities, such as Atlanta. However, most of the office buildings in secondary markets, such as Auburn and Columbus, have mostly been unaffected. It has remained true that location is key to the office sector and due to lack of supply, office space has continued to remain mostly full in the region, especially in Auburn and Opelika with very limited availability. This has led to most users requiring office space in the region to construct new buildings in Auburn and Opelika. Despite huge demand in Auburn, the Montgomery office market has struggled tremendously with minimal upside. 


In summary, the region has largely been unaffected by Covid-19 with continually increasing home prices and high demand for commercial real estate. The biggest and seemingly only threat to real estate appears to be solely macroeconomic with rising interest rates and inflation, which will likely affect affordability as discussed in our previous post.

No matter what type of commercial real estate you’re invested in, there’s a good chance the value of the property has risen or fallen in the past two years. If you need a professional appraisal on your commercial property, Atlas Valuation is the place to go. Our specialists have experience in a wide variety of commercial real estate appraisal. Call 334-737-6993 to get started today!

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