From advancements in technology and cultural shifts to economic fluctuations, the number of outside factors constantly affecting the real estate industry is incredibly high. However, one of the most disruptive aspects seems to be the emergence of the COVID-19 pandemic. Ever since 2020, the pandemic has been affecting the commercial real estate sector in quite unprecedented ways, and it’s still shaping the industry today. Driving Commercial Real Estate
The economic downturn, virtual showings, and the shift away from traditional offices are just some of the obstacles and circumstances currently impacting the industry. If you are in the field as well, it’s crucial to be prepared for what’s to come. To that end, here are some of the most important trends driving commercial real estate you should know about:
Lower demand for office spaces
When countries around the world began to shut down, new work-from-home orders emerged, possibly one of the most prominent aspects of the novel pandemic. But even as the world started to open up in the following months, many businesses decided to stick to a virtual workforce or chose a hybrid model combining remote and in-person work. Evidently, companies have found that they could operate just as well, achieving better levels of productivity and efficiency, without the overhead costs of renting or owning a physical office. As a result, the demand for office space significantly dropped in the last few years and will likely continue to be low in the future, although this aspect is still relatively uncertain.
Higher need for property maintenance
Another concern COVID-19 brought upon is health. Disinfection is now more important to consumers than ever before, and well-maintained properties tend to instill more confidence, whether that means spotless floors, visible cleaning, sanitization, or even fresh landscaping. The pandemic has clearly put property maintenance at the forefront. It seems like this is one of the most crucial areas commercial properties should focus on, as an investment in facility maintenance could be directly related to the overall brand experience.
Modular building attracts investors
The need for affordable housing continues to rise across the globe, and modular building seems to be the best option for a number of reasons. With a labor shortage affecting the construction industry, quicker and more sustainable solutions are needed for keeping up with demand. In addition to speed, safety concerns are ever-present, and a higher amount of control is needed during production. Modular building can solve all of these issues, and more. As modular solutions are built off-site using high-quality materials, advanced technology, and under strict supervision, commercial properties can be produced quickly and seamlessly, providing efficient and affordable real estate solutions despite the current market fluctuations.
Smart amenities are on the rise
As the adoption of sophisticated technologies begins to dominate the market, smart amenities in commercial properties are slowly becoming a necessity rather than a commodity. This trend has already been present before the pandemic, but it truly took off once worldwide restrictions forced people to spend more time at home, and it will only continue to grow stronger in the future. Remote working solutions paired with an increasing need for safety and convenience have turned IoT-enabled devices and other advanced smart tech into fundamental features all commercial real estate should include as “must-have” amenities. Driving Commercial Real Estate
The popularity of rental properties
As already mentioned, most people were sheltered in place, office spaces were mostly empty, and time spent at home was at an all-time high during the COVID-19 pandemic. In turn, multifamily amenities became increasingly important, and will likely continue to drive the commercial real estate sector as time goes on. Renters looking for well-equipped properties is not exactly a new trend, but it was exacerbated during the last few years. Likely due to isolation and a growing need for community and human connections, the search for valuable properties with options such as on-site dining, fitness centers, co-working spaces, and other similar amenities has never been more important.
The impact of the internet on land value
The advancement of technology and the prominence of digital connectivity have affected most industries across the board, and commercial real estate is no exception. It seems like these developments could impact the real estate industry’s approach to the built environment and land use as well. The effect the internet has on the value of land in general will likely be an increasingly prominent subject in the sector, but it looks like we are still in the beginning stages of analyzing the scope of technological impact in the real estate industry.
The number of factors shaping the commercial real estate industry is quite high, but the emergence of the COVID-19 pandemic along with the advancement of technology seem to have had the biggest impact on the sector. The trends mentioned above are just some of the many tendencies that will be driving the real estate industry throughout the year and beyond.
