Commercial real estate in the United States has been mapping steady growth since the recovery started. Developments have been increasing, vacancy rates declining and rents rising.
Considering the strong growth trend, Robin Micheli, a special reporter for CNBC, gathered several comments from experts and made a list of seven of the boldest forecasts for the commercial real estate industry in the next 25 years.
The experts say that by 2039, the commercial property market will change drastically based on demographic, environmental, technological and economic variations. The changes, they say, will be cyclical, with some industry players unable to adapt to the constantly modifying market. Nevertheless, the sector will continue to thrive.
So what exactly can you expect the commercial real estate market to look like 25 years down the line? Here are some key points:
- Most shopping malls will vanish due to the growing popularity of online retailing. Only those that generate strong profits will likely survive.
- Warehouses will have to keep up with the dynamic technological changes and cater to online retailer needs. Logistics and automation will also gain traction over the years. Distribution will become efficient.
- The number of mega-cities will increase, meaning more office buildings and multi-family residences.
- Suburbs will become an important part of cities. They will be connected to major urban areas via modern infrastructure.
- Workspaces will boast state-of-art technology. Offices will offer more personal touches, like digital workstations, bistros and dry-cleaning sites.
- Green Buildings will become the "buzzword" of commercial real estate. All buildings will require a LEED certification. Old buildings that cannot be retrofitted with eco-friendly features will be razed.
- The need for senior housing will explode as the population will age considerably by then. In the next 25 years, medical facilities will also be in great demand.
More recently, the National Association of Realtors stated that the commercial real estate market outlook for 2014 was positive. The market grew at a moderate pace in 2013. Other experts also added that the market is now ripe for both sellers and buyers. A large influx of lending is also expected to come in for the commercial and retail property market in 2014.
Find out more about the property market of 2014 here.
