Investors and business owners alike follow commercial real estate trends. They wish to know what the future holds and how it may affect their business or their investment portfolio. What are the four most important trends they should be watching in 2019? Furthermore, why are these trends of importance?
Industrial and Multifamily Properties Remain in High Demand
ULI’s 2019 Emerging Trends report announces industrial and multifamily assets will remain popular in 2019. Investors are grabbing up entire portfolios to strengthen their position in the industry. A good example of this is the Blackstone Group. This group recently obtained logistics assets from Harvard University, investing nearly $1 billion when doing so.
Retail locations are becoming hot again, especially those primed for upgrades or redevelopment. Investors snatch up these properties thanks to their low cost and ability to be used for alternative purposes. Anyone looking for commercial real estate needs to act quickly before they miss out on a great opportunity.
Office Space Demand May Slow
Office net absorption remains positive. If the country continues to see job growth in those sectors making use of this type of commercial real estate, investors may once again look to this area to build their portfolio. Experts are noticing office real estate expansion is greatest in those areas in close proximity to entertainment venues and additional amenities.
However, these buildings now consist of smaller workspaces that are more flexible, and co-working is becoming more common. Nevertheless, if fewer jobs are created, office demand will decrease thanks to the supply levels. When this occurs, vacancy rates will rise and rent will grow at a slower pace thanks to increased competition.
Real Estate Tech Will Flourish
Real estate brokers, as with any business person, look for ways to simplify their daily operations. With the help of new technology, doing so will be less of a challenge. New products can be of help with everything from research to property management. Every company needs to look into investing in this area or risk falling behind competitors. In a competitive market, lagging in this area can be very dangerous and lead to customers looking elsewhere. For this reason, many in real estate will make boosting their technology a top priority.
New Brick-and-Mortar Retailers Will Emerge
Thanks to many retailers closing their physical locations, storefronts will sit vacant or so many believe. However, certain online retailers are opting to make use of this space and are opening physical locations to complement their current online presence. Amazon is one company making this move, and it is joined by Athleta and Casper. These retailers have very little to lose because the rents are incredibly low as landlords try to fill the vacant spots that are overtaking their properties.
Although nobody can accurately predict the future, as there are too many variables at play, experts can provide information on what they expect to happen based on their insider knowledge. While these four trends need to be monitored, this does not mean other aspects of commercial real estate are to be ignored.
The more a person knows, the easier it becomes to make informed decisions that are right for their business. For this reason, every person interested in this sector should follow the news to see what develops and what may be coming. Knowledge always remains the most important thing.