While a rising tide lifts all boats, not all boats are created equal. That's the case in commercial real estate (CRE). Nearly every segment of the vast industry showed recovery from the initial shock of the pandemic-induced shutdowns, but some improved way more than others.

And the factors that influenced the kind of year each of these verticals had in 2021 will continue into the new year, including logistics issues, labor shortages, travel restrictions, inflation, and the immutable law of supply and demand. Especially demand.

Two people with a cart in a grocery store.

Image source: Getty Images.

The Fall 2021 ULI "Real Estate Economic Forecast," based on a survey of 49 economists and analysts at 36 major real estate organizations, predicts CRE property price increases of 10% this year, to be followed by 7% in 2022 and 6% in 2023, based on the RCA Commercial Property Price Index.

But, again, that rising tide thing: A lot depends on the segment. Industrial and multifamily continue to outperform the market in rent growth, each at 5% this year, while rent growth for retail is predicted to be 0.6% and office even lower, at -1.5%.

Here are some predictions about four major CRE segments for next year.

1. Industrial will remain hot

Demand for warehouse space all along the logistics pipeline drove prices to record heights and vacancies to record lows throughout 2021. E-commerce is a major driver of this, with Amazon (AMZN -1.86%) at one point this year accounting for nine of the 10 largest warehouse construction projects in the country.

But Amazon is hardly alone. Retailers of all sizes -- from Walmart and Kroger to craftspeople on Etsy -- are driving the growth of distribution facilities. Manufacturers will also be requiring more space as they look to start keeping more parts in stock on-site or nearby, going from "just in time" to "just in case" inventory practices.

A couple of real estate investment trusts (REITs) to consider in this space for your investment dollars include Prologis (PLD 2.04%) and Terreno Realty (TRNO 1.59%).

2. Multifamily will stay hot, too

Just like in industrial real estate, multifamily investors can expect strong demand to support higher rent in most markets across the country, according to the National Association of Realtors (NAR). Rising mortgage rates and home prices that affect affordability for many people, and building activity that lags demand, will all continue to be factors, the trade group said in its fall forecast.

The report projects rent growth for multifamily units could remain at about 10% in 2022. That depends on the market, of course. Double-digit rental growth was recorded this year in 127 out of 390 major metro areas, defined as having populations of more than 1 million. Leaders in this area include Tampa, Florida, which posted 25.1% rent growth year over year in the fourth quarter of 2021. In markets of 25,000 or less, rents on Hilton Head Island, South Carolina, saw 24% rent growth at the same time.

REITs to consider here include Mid-America Apartment Communities (MAA 1.67%) and AvalonBay Communities (AVB 1.24%).

3. Retail will continue an uneven roll

The pandemic was particularly hard on brick-and-mortar retail, and the shift to online shopping that was well underway only sped up. Stores closed by the thousands, and while that trend has slowed down, UBS is still estimating that about 80,000 -- or 9% of total stores in the country --- will close by 2026.

From the landlord perspective, essential brands -- think Walgreens (WBA -0.38%) and grocery stores -- will continue to be stable tenants and anchors, and individual entrepreneurs may be the right choice to fill strip mall and downtown space that was previously unaffordable to them. (I'm seeing that now in an open mall center in my neighborhood that is now discounting its rents deeply.)

From the investor perspective, the net lease structure that REITs typically use will continue to work well for those that have survived the retail apocalypse, including mall giant Simon Property Group (SPG 2.94%) and diversified retail portfolio holders like STORE Capital (STOR).

4. Office will also continue to be a mixed bag

There's a good reason that the ULI report predicts rent growth for office space nationwide to be slightly negative in 2022. The continued prominence of working from home will combine with the net effects of the Great Resignation to dampen demand in 2022.

While some companies have started bringing people back into the office, the list of those who haven't -- including major employers -- is long and probably won't shrink much, given the continued uncertainty of COVID-19 and the effect of its variants.

In fact, a report from PwC and ULI says that almost two-thirds of real estate professionals believe that fewer than 75% of workers will be there in person at least three days in 2022, and that office space utilization will likely decrease between 5% and 15% through 2024.

Suburban office markets have performed better than some central city business districts, and one of the better bets in the sector is on the life sciences. Two REITs in that space to consider are Alexandria Real Estate Equities (ARE 1.26%) and increasingly, Boston Properties (BXP 1.12%).

There are a lot of ways to invest in CRE, and REIT returns still look promising

There are a lot of ways to invest in this kind of real estate, including through Delaware Statutory Trusts and 1031 exchanges, opportunity zones, crowdfunding, directly, and through REITs.

I find the latter choice the most attractive as a source of passive income and stock appreciation and with a strong return that should continue in the year ahead.

That ULI report says total annual returns for equity REITs are expected to end 2021 at 27.8%, an impressive showing that approaches a 2014 peak of 30.1%. For 2022 and 2023, they're forecasting 10% annually for that investing choice, which is still not too shabby, indeed.