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In the early days of the COVID-19 pandemic, the real estate industry scrambled to predict how lockdowns, remote work, and shifting consumer behavior would reshape the built world. Five years later, a review of these predictions reveals that the biggest risk to CRE wasn’t the pandemic itself—but what came after.

While the industry focused on immediate concerns like office occupancy, retail collapse, and an urban exodus, it failed to anticipate the deeper economic shifts that would reshape the market. The real danger was inflation, fueled by central bank stimulus and global disruptions, which led to rising interest rates, collapsing investment volumes, and significant value declines across key asset classes.

Some of the biggest miscalculations include:

• Investment Recovery and Inflation's Impact – CRE expected a slow rebound, but 2021 saw a record-breaking surge in investment—followed by a sharp decline as inflation and rate hikes took hold.
• Distress in the Wrong Places – Investors anticipated lucrative distressed assets post-pandemic, but much of the distress is concentrated in offices, an asset class few want to touch.
• The Urban Exodus That Wasn't – While city dwellers briefly moved further out, long-term migration patterns have largely returned to pre-pandemic norms.
• Retail’s Unexpected Resilience – E-commerce growth spiked but didn’t sustain at the expected pace, and brick-and-mortar retail has proven far more durable than forecasted.
• The Myth of Permanent Remote Work – Business travel and office space demand, while evolving, have rebounded far more than anticipated.

The pandemic wasn’t the existential crisis for real estate many feared—but the economic aftershocks have been far more disruptive than the industry expected. As CRE continues to adjust to higher interest rates, shifting workplace norms, and an evolving investment landscape, the lessons from this miscalculation will shape the next decade of real estate strategy.