With there being so many changes to expectations we had for this year, it is important to evaluate some of the current commercial real estate trends to see where we are at.
Technology of all sorts is rapidly evolving, and it is incorporating itself more and more into commercial real estate. E-commerce is extremely popular for thousands of items, now branching into the food and beverage industry. With an increase in e-commerce use, brings a higher demand on e-commerce operators. This demand forces them to utilize the best real estate possible in order to have a successful business.
Current commercial real estate trends also show technology reshaping industrial real estate. Every step of the supply line is transforming in some way by new technologies such as artificial intelligence, advanced manufacturing, machine learning and robots. It is completely changing the way factories and warehouses operate, creating dynamic work spaces aimed at productivity, creativity and retention.
Since 2007, the investment volume for nontraditional properties has more than doubled. Commercial real estate investors are interested in investing in alternative speciality properties such as student housing, senior housing, medical offices and self storage. This trend is expected to continue to increase due to portfolio diversification, market demands, product availability and higher cap rates.
In addition, although there is a slower economic growth rate this year, this doesn’t change the large amount of investment capital available. The US is still expected to be a desirable place to invest in commercial real estate because of low global bond yields and volatile markets.
It is also important to look at how covid 19 has been impacting the 2020 commercial real estate market. It is hard to determine a general outcome, though, as each type of commercial property is being impacted differently. Many commercial tenants have struggled to pay their rent as of late, which is expected to worsen in upcoming dates. Although, it’s not all bad news. Many are expecting a quick, strong bounce back following the covid closures, with limited long-term effects.
We look forward to businesses opening back up, and will be there through it all. If you need any help with your commercial property right now, don’t hesitate to contact us.