The commercial real estate industry is constantly changing to reflect the world of business and the growing international economy. If you want to make strides in this industry, it's important to understand the current state of commercial real estate and purchasing large buildings so you can see what the future holds for this lucrative business. Here are the factors investors and real estate experts are watching to see how commercial real estate will continue to evolve.
Technology
One of the most dramatic shifts in commercial real estate is happening because of the increase in using technology throughout the business. Technology, such as smartphones and powerful apps, are making commercial real estate an entirely different business. Not only is technology making investing and finding potential properties easier, but it's also opening up the world to newer types of opportunities and more efficient ways of doing business.
Industrial Demand Increases
Another big change in the world of commercial real estate is the increase in the demand for industrial spaces, such as manufacturing or warehouse storage. Internet-based retailers are keeping this type of commercial real estate niche growing because of the need for production spaces for creating products and storing products to be shipped to customers. Investors and others involved in industrial real estate spaces can make more money by paying attention to the wants and needs of these new entrepreneurs.
Foreign Investors
Foreign investors are also making an impact in the world of commercial real estate and buying large buildings. When asked, what has changed most in real estate investing since you originally started, Steven Taylor landlord in LA says, "Competition is fierce now. There is a ton of foreign and coastal capital in our market place. Investing in apartments in Los Angeles wasn't always the asset type chosen, but that has definitely changed."
Sustainability
Next, investors and experts in the industry are paying close attention to how sustainability is going to impact how large buildings are constructed, sold, and managed in commercial real estate. The industry can help do its part to support a healthier planet by focusing on greener building practices, such as using sustainable materials, looking for renewable power sources, managing waste better, and reducing a building's carbon footprint. These practices also help investors and developers save more money in the long run.
Shifting Away From Retail
Another change that is impacting the state of commercial real estate is the shift away from the traditional retail model. The brick and mortar retail stores that became meccas of profitability in decades past are starting to shut their doors and close as consumers opt for online stores. Big box retailers may not be as much in demand for commercial real estate developers, but there are some opportunities for growth for smaller outlets.
Millennials
Developers and investors also need to pay attention to the changing demographics of the country to better meet the needs of customers. The new generation of millennials, who are starting to have more purchase power and be influencers in the world, need to be catered to so commercial real estate developers build better projects. Millennials prefer a different type of working style that may influence how offices are designed.
Economic Changes
Finally, the economy's changes on the world stage are also important to keep in mind when dealing with commercial buildings. The introduction of tariffs to China in the upcoming trade war may make a significant impact on how businesses use property in the future. Additionally, tax code changes and interest rates also may have an effect on this sector.
Being a part of the commercial real estate industry is exciting, and with these trends, you can expect to see a very different setting in the near future. If you pay attention to the changes and maximize them and evolve the way you do business, your stake in commercial real estate could be more promising.
