The passage of the Tax Cuts and Jobs Act at the end of 2017 brought with it a new investment vehicle for commercial real estate players—Opportunity Zones, or qualifying low-income census tracks designated by state governors as areas for investment that could benefit local communities. The 8,700 designated Opportunity Zones nationwide offer real estate investors attractive tax breaks, including reduced or deferred capital gains taxes, as long as they are willing to keep their money tied in for the long-term (the cost of the improvement to the Opportunity Zone property must also exceed the original investment).

Multiple new funds aimed at investing in Opportunity Zones were being formed as early as June, with Virtua Partners targeting a capital raise of $200 million, for example.

However, market experts warn that investing in Opportunity Zones also comes with a fair amount of risk, since there can be no guarantee that local property values will, in fact, go up. They recommend considering specific neighborhoods and properties carefully, to make sure they show a good probability of a return on investment.

“I think we’re through the worst of it, but there will always be bankruptcies—even in good times,” Cordero says. “Retail is such a cyclical business. [Someone once described it saying], it’s not if a retailer will fail, but when. It might seem dark, but it’s not. It’s the nature of the beast... It’s up to retailers to adapt to change, reinvest constantly. That’s why it’s such a tricky business. But those retailers that are doing it in smart ways are going to be fine.”

Industrial real estate emerged as investors’ most preferred commercial asset class in 2018, as e-commerce growth continued to drive demand for warehouse and distribution properties across the country. In the second quarter, markets ranging from California’s Inland Empire to Columbus, Ohio made the list of places with the strongest industrial space absorption, according to real estate services firm Transwestern.

In fact, the need for space has been so great, many older properties in urban infill markets are being reconsidered for industrial conversions. However, cap rates on industrial assets moved down so far, there has been some concern the sector may be becoming over-heated. Though it doesn’t appear it’s time to worry yet, as industrial brokers believe the sector can still run on high for another two or three years.

The Federal Reserve continued to raise its benchmark interest rate in 2018, including hikes in March, June, September and December. The most recent increase brought the benchmark rate to a range between 2.25 percent and 2.50 percent. Commercial real estate economists don’t appear overly worried about the impact of slow, gradual increases on the real estate sector, especially since these increases have been long anticipated.

What does worry market experts to some extent, however, is the possibility of an inverted yield curve, which has preceded each of the past three U.S. recessions. The yield curve—the difference in the yield between 2- and 10-year Treasuries—has been hovering at a slim margin in recent months.

With REIT stocks trading below NAVs, there has been a pick-up in REIT merger and acquisition activity. As of October, the value of year-to-date U.S. REIT M&As totaled $81.75 billion, compared to just $33.37 billion during the same period in 2017, according to research firm S&P Global Market Intelligence.

Among the most prominent REIT acquisitions this year was Greystar Real Estate Partners’ $4.6 billion purchase of student housing REIT Education Realty Trust (EdR), Brookfield Asset Management’s $11.4 billion acquisition of Forest City and Prologis’ $8.4 billion acquisition of DCT Industrial Trust Inc.

The M&A trend is likely to continue into 2019, as REITs may be seen as a more attractive place to park investment capital than the broader stock market.

An exclusive NREI survey conducted this spring found that women in the commercial real estate industry continue to face pay disparity and fewer promotions compared to their male counterparts, in addition to still facing incidents of sexual harassment. A full 72.7 percent of survey respondents, including both male and female professionals, said that sexual discrimination in the form of lower salaries and getting passed over for coveted assignments currently occurs in the industry.

In the fall, a white paper put together by the Commercial Real Estate Women Network (CREW) confirmed that women in commercial real estate are still getting paid less than men do for doing the same jobs. The discrepancy in salaries starts at mid-level positions and continues once women reach executive ranks.

Meanwhile, some vulgar references to women professionals made by industry titan Sam Zell during a Nareit conference in June, reported by Bloomberg, underscored that there’s still work to be done on the industry’s image as the “good ole’ boys’ club.”

Co-working giant WeWork made further strides toward market dominance in 2018, growing its space portfolio and launching new business lines to compete with commercial real estate services firm. Meanwhile, the field of WeWork’s direct competitors continues to expand, leading to the question of how many co-working operators can the U.S. market sustain?

For the moment, market observers believe co-working operators don’t present a huge challenge for office REITs and are less prepared to weather a downturn than traditional office landlords. While respondents to an exclusive NREI survey administered this fall largely felt that demand for co-working space is going to grow in the near future and that the trend is here to stay, almost 40 percent said that even sector leader WeWork will face substantial challenges when a downturn happens.

As cap rates on core properties in gateway markets have become too low for many investors to meet their return targets, value-add strategies have gained in popularity in recent years. But with rising interest rates and the real estate cycle appearing to be in its last inning, market experts warn that some value-add plays are more risk-proof than others.

Among the strategies experts recommend are less expensive partial renovations, bridge loans in place of equity investments and paying close attention to property fundamentals.

The multifamily sector is still strong, but small cracks are beginning to show in select markets. Landlords find themselves having to offer rent concessions on newly built properties across the country. Vacancies have ticked up slightly, while rent growth has moderated compared to the past few years.

The outlook is brighter, however, for class-B and class-C apartment buildings as the U.S. continues to face a shortage of workforce housing. Meanwhile, a slowing construction pipeline might return more of an equilibrium to the luxury end of the market.