The pandemic hit the economy with full force and has shaped future trends in real estate that respond to the new reality we face as a society. As working remotely and e-commerce are at full power, investors are looking for new possibilities in commercial real estate that resurface as businesses start to reopen. Innovation opportunities appear soon while financial districts slowly start to welcome back their workers and brick-and-mortar stores readapt to different customer demands. In our following guide, we have identified six emerging trends that are currently reshaping commercial real estate and will heavily impact future investments.
1. Online Trends Determine New Investments
With the evident rise of e-commerce, brands need to adapt their business models to cater to online customers and offer a hybrid experience if they already have a physical store. As lockdown restrictions loosen up, open spaces are attractive investment opportunities to provide outdoor dining experiences and other activities. For instance, food distributors may start looking for better cold storage spaces to properly cater to skyrocketing delivery demands, or retailers seek warehouses to expand their available inventory for faster shipping times.
2. Greater Focus on Sustainability
Relying on green energy and using sustainable materials for construction has become a critical point of discussion in commercial real estate for the past couple of years. Commercial property owners must go above and beyond in offering energy-saving systems for electricity, water, and HVAC to their lenders, aside from allowing these companies to implement sustainable measures in their installations to dive deeper into the matter. This comes hand in hand with increased building restrictions and a new consumer profile interested in how their product or service performs in sustainability.
3. Embrace Digital Solutions
Thanks to impressive technology advances, commercial real estate can open its arms to specialized industries that are looking to implement their supply chains with innovative changes. Things like advanced manufacturing and drones will soon reshape the way commercial real estate offers space solutions to manufacturers and companies from the science and engineering industries. Stepping up to the challenge implies catering to these markets with specialized facilities while still offering central locations not too far away from urban areas.
4. Increasing Interest in Repurposing Properties
One of the most interesting trends that will reshape the industry has to do with how lenders and users perceive space use. The shift from static office properties to more dynamic spaces opens the door to innovative solutions to indoor and outdoor areas. Several manufacturers, through their website, are already offering several alternatives that perceive a commercial property as a multidimensional service rather than a single-use space. Welcoming different demographics in a single spot and blurring lines between businesses is a rising trend that should set the tone for many years to come.
5. New Uses for Office Properties
Working from home has forever changed the way companies will look into office investments. Instead of standard offices, the investment focus has shifted towards coworking spaces that function as working stations and meeting spaces. That way, businesses can save costs in infrastructure and reinvest in other areas. At the same time, commercial real estate investors can look into multipurpose commercial properties to cater to several purposes at once. However, this rising trend doesn’t mean old-styled offices will go extinct. Investors can still take advantage of properties with more than a thousand square feet for businesses embracing a hybrid schedule model for their employees.
6. Delicate Situation with Price Declines
The economic strains from the pandemic will have long-term effects on the industry. Even if the demand for new leases will start to increase as cities start to reopen, the borrowing costs will place increasing pressure on real estate owners. Nowadays, many lenders and the federal government have allowed certain flexibility given the unprecedented circumstances, hoping that borrowers can eventually get back on their feet and return the money. Therefore, looking closely at how economic indicators behave during the following semester should be a top priority to see how well the entire industry will perform.
As time progresses and new medical advances allow us to lift lockdown restrictions, knowing what trends will reshape commercial real estate can help find new investment opportunities for the next semesters. Recovering lost revenues and preparing for a steep decrease in prices will be a stressful challenge for investors, lenders, and business owners alike. However, the pandemic has opened the doors to innovate and readjust the old formula for commercial buildings to rethink their main purpose and search for alternative ways to attract customers again. Today is the time to embrace change and aim at niche industries that have thrived during harsh times, and look towards the future with further understanding of customer’s expectations on sustainability and innovation.
Comments are closed.