The pandemic has accelerated social and economic changes that were underway before the outbreak. This led to consumers, workers, and employees to adapt to new preferences and behaviors. Collectively, commercial real estate investments will require to adapt to new norms, design, customer relations, and business operations to function successfully in the future. It is said that this pandemic will reshape demand for commercial real estate, and specific steps should be taken to remain competitive in the market.
A buyer’s mind will be plagued with the pandemic’s effects on the buildings’ revenue and expenses when thinking of how to get into real estate investing. Potential issues from infections and many other reasons may cause buyers not to secure any favorable financing for an acquisition. There is uncertainty for sellers where they wonder whether they should sell now or wait out the pandemic. They are unsure whether they will have good options for investing the proceeds from the sale.
The pandemic is affecting economic growth, and that, in turn, has changed everything else. Even with low demand for most real estate types, the commercial estate is deemed to play an essential role in economic recovery. Such crises have been faced before, and even during that phase, the real estate industry has emerged as one of the pivotal drivers of financial and economic revival.
There will be a change in demand for each sector of commercial real estate. Digitization of office spaces will reduce the need for space from tenants, with half of the workforce is expected to work remotely by 2025. This will lead to repurposing the retail space over the coming years when investing in office space. Retails centers will need to be reconfigured to facilitate curbside pickup and to support delivery services.
With the increasing tendency for residents to work from home, multifamily building owners can respond by providing enhanced connectivity options. Property owners can augment common areas with sensors, smart walls, and voice assistants to modernize their current properties. In the future, tenants may also expect onsite emergency equipment and health certifications for onsite personnel and common areas. Multifamily real estate developers should consider updating their designs to include spaces for delivery services within the buildings and drop-off zones in parking lots.
The growth in e-commerce space will contribute to the demand for more space. Tenants related to the e-commerce industry will expect their area to be equipped with improved air ventilation systems, antimicrobial technologies, and motion detectors that can replace frequent touchpoints.
There is a need to strategize a post-pandemic plan that will allow businesses to thrive in these new contexts. Being proactive and adapting rapidly to the changing environment will help you succeed in this ever-competitive industry. There is a need for structural reorganization and embrace new communication methods, remote workspace, and compliance with technologies that help welcome the new normal.