This pandemic has pretty significantly impacted all classes of commercial real estate. However, there are many new innovative possibilities for the CRE market this year. This includes affordable rental prices, better online communication and sending payments with the click of a button.
Industrial and retail real estate trends in 2019 were greatly accelerated by the pandemic. Warehousing and distribution centre contraction and lease rates took off as e-commerce businesses expanded. Brick and mortar retailers have been hit the hardest, as some struggle to make their rents during the lockdowns.
In the office sector, there has been a divide in where office vacancies and trends are heading. Some predict that the work-from-home trend could become the new normal, while the other is saying that we will return to the way things were before. Others predict that there will be a compromise, since clearly companies can save more money if their employees remain working from home. But it would be to the detriment of collaboration and office culture.
Experts predict that commercial real estate will begin to recover gradually from the pandemic’s impact this year. While this recovery may be difficult, there is also a chance that there are opportunities for business owners and investors to keep an eye on.
Knowing the latest trends and predictions will help you stay ahead of the curve and make smart decisions in the CRE market this year. These are some emerging trends and predictions you should know about in 2021.
CRE corporations everywhere are researching and trying to understand evolving behavioural trends, how to establish secure building spaces, ways to increase efficiency and how to recognize challenges and vulnerabilities at the asset and portfolio level.
CRA corporations need to familiarize themselves with the results of this research, since these will likely impact the market as a whole. Those who have an understanding of these trends will be better able to provide their clients with a better experience, which then results in steady sales.
Despite the fact that the pandemic has caused many workers to start working from home, there are actually several opportunities for commercial offices that didn’t exist before. Finding vacancies in high traffic areas is ideal for commercial owners looking to expand.
While many businesses are waiting for their chance to bring their employees back to the office, there are many great reasons for having an office in the pre-COVID era. In an office, employees have more space and opportunity to work collaboratively, which helps increase cooperation and efficiency. CRE owners and investors need to be aware that even during the pandemic, there are still business owners looking for affordable office spaces, and they should keep this in mind while making their investment choices this year.
The e-commerce sector boomed as the pandemic got under way, after it was an already fast growing sector prior to 2020. As a result, retail stores and third-party logistics businesses are growing and optimizing their fulfillment center footprints, and many of them are switching their inventory model to a just-in-case approach as they try and prevent shortages of goods. As this trend grows, many online shops will be looking to lease a warehouse for their growing businesses. This will then provide steady increases in leasing opportunities for the CRE market that owners and investors can take advantage of.
Because of the ongoing pandemic, predictions of the future of the CRE market are still cloudy. But with the rollout of vaccinations and other stimulus there are signs of recovery on the horizon.
Experts predict that major corporations with millions of people working from home will have a huge impact on the office space market, but this will depend on what kind of new standard rises as 2021 moves forward. Investors need to focus on longer term growth to find great deals on office space leasing. In the meantime, industrial sectors have been doing particularly well, especially warehouse operations, life sciences and network infrastructures.
Because of the pandemic, there is a lot of uncertainty in regard to the commercial real estate market. But despite this, numerous investors still continue to be involved in the market, even though problems related to the process often delay things. There are stable CRE sectors which have continued to perform well, which investors should continue to invest in. This includes e-commerce warehouses, self-storage facilities, grocery stores and medical or retail spaces. Experts predict that even after the pandemic, these types of spaces will continue to prosper.
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Joe Battaglia brings over 25 years of real estate expertise in Mississauga and the Greater Toronto Area. As leader of the Battaglia Team at RE/MAX Realty Specialists, Joe is dedicated to helping families find their perfect home.