Like the residential real estate market, commercial real estate keeps evolving and growing with the tides of the world. Due to this dynamism that commercial real estate possesses, an investor must keep strategizing on how to corner the profits and edge out his competitors from the market.
In this informative article, we look at the 2020 trends in commercial real estate.
Demand for workspaces Before the advent of the novel Coronavirus, offices was open, and retail and restaurant operations were also in full force. However, the virus forced the government to order a lockdown of all of these commercial spaces in its effort to cut down the spread of the virus.
The virus has forced many businesses to ask their workers to work from home, leaving many offices empty and unused. The virus also caused a global pandemic that has affected the global economy and has led to a soaring unemployment rate that has negatively impacted households and investments.
Though the virus is yet to be exterminated completely, life is returning to what we used to know before. After the long hiatus, some businesses are asking their workers to resume back to the office while others have adopted the remote working option.
What commercial real estate investors can deduce from the foregoing is that as businesses begin to open back en masse, the once empty workspaces can be expected to fill up in little time.
- Demand for a restructured design of office spaces
Part of coronavirus’s effect would be a surge in demand for a restructured office space that allows for more space and privacy.
Workers would be more conscious of their environment and health because of the pandemic. Commercial real estate landlords can expect to have businesses demanding that their offices be restructured so that it can allow for more privacy.
- Growth in the use of technology
Like every other human endeavor, commercial real estate has seen rapid growth in the use of technology in the industry. This is not looking like it is ending anytime soon; instead, it looks like it has come to stay permanently.
According to PWC, many industry leaders view technology as an enabling force for efficiency gains, not just for their business but in the work they undertake for clients and occupiers. This is whether it is building information modeling used by architects and developers or data management tools used by investors and asset managers.
Reliance on technology is only going to escalate as the years go by. It would be in every real estate investor’s best interest to incorporate technology into his dealings.
- Growth in residential investment
Many investors are beginning to invest more in places people can call home. Due to the rising interest rates, this sector allows investors to tie their investment to essential human living.
Investors are now becoming more interested in investing in purpose-built student accommodation, residential care homes, and residential homes in areas where there is a sharp rise in job opportunities.
- Focus on the climate
There is a growing focus on building homes and offices that are climate-friendly and compliant.
PWC notes that “climate change is seen as having the biggest impact on real estate over the next 30 years, but it is clear that some industry leaders are already rising to the challenge, not least because they bear some responsibility.”
Investors are careful not to run foul of laws of the state that protect the environment, and many are responding to national emissions target.
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Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.frazier@fbol.com. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.
