Shifting business trends are making real estate far more important in the corporate world, are changing the dynamics of what’s in demand, is literally altering the landscape, and creating new investment and profit opportunities for commercial real estate investors…
So what’s changing? How is it impacting commercial and residential real estate? What factors may be make or break in future profit potential for landlords and investors?
The CCIM Institute recently ran a feature on Corporate Shifts highlighting just how much more important real estate is becoming in the corporate world. According to the April 2014 article and underlying surveys more and more real estate experts are reporting directly to the C-Suite, and more companies are recognizing their property holdings hold the future of their organizations.
Commercial real estate is becoming more important as the current upcycle can mean more growth and profit potential from real estate investments as main profit margins shrink and even move into negative territory. At the same time workplaces are increasingly becoming one of the top tools for recruiting and retaining top talent. Office design is now also directly tied to employee performance and productivity.
Beyond stunning architecture and workplaces like Apple’s Mothership, this is extending to corporate housing like Facebook’s new apartments.
According to the report just 8% of commercial real estate companies have not been using outsourcing, and within the next 2 years as much as 40% of the work force is expected to be working remotely.
Office, Retail & Multifamily Shifts
The fallout of these trends in the office sector is likely to mean more acquisitions, adding to current relocation shifts to less expensive locales in secondary markets or on the outskirts of major hubs. Companies will be looking for fresh, trendy space, while commercial real estate investors will find huge profits in value add and renovating existing buildings. Companies will need les square footage per employee, but demand spaces be more efficient.
Technology only continues to boost the performance and profitability of retail and retail investment properties. However, remote working and walkability trends are likely to push much of the best gains to local shopping centers and strip malls versus mega malls.
Multifamily & Residential
The new U.S. real estate boom along with business relocations is enabling more small landlords to sell, and making it more attractive for them to sell. This is driving up rents quickly, while creating more local transaction volume as tenants move.
There are many opportunities to increase income from existing properties, with no lack of demand for units. Tenants are prioritizing proximity, additional services such as internet and are looking for easy move-ins.
All of this is only making property management more valuable and important than ever. A savvy local expert and establish full service property management firm that is wired into these trends knows how to make a property stand out, maximize property value and improve income and performance.