Top 5 Commercial Real Estate Trends
This is a question that anybody interested in commercial real estate should be asking themselves constantly. Why? Because CRE is a constantly shifting industry, and one that is dominated by trends.
That being said, here are the top five commercial real estate trends that are both defining and reshaping the industry right now:
1. Telecommuting is in the Rise
Computers are making everything easier, including people's jobs. They are making jobs so much easier to do, in fact, that many professionals can now work from the comfort of their own homes. This, combined with the fact that many companies see a reduction in office space as an effective cost cutter, has led to a significant increase in the amount of telecommuters. Some companies are even paying employees' rent, decreasing the need for roommates.
Because of this change, one can expect that there will be a reduction in office space use, with an increased demand for residential properties.
2. Fewer Flyers, More Online Ads
Studies have shown that online marketing can produce better results at a lower cost than offline marketing. Studies have shown that a helpful blog post, for example, is 63 percent more likely to influence a purchase than a print magazine ad. This rule applies to just about every industry, including commercial real estate. Adept CRE investors are recognizing this trend, and spending their marketing dollars on online strategies instead of traditional 'interruption' marketing campaigns.
3. The Impending Millennial Surge
The Millennial generation is so numerous that they outnumber even the baby boomers, which were once the largest generation the United States had ever seen. This generation also rents a lot. They rent so often, in fact, that some people believe the widespread notion of home ownership will fade away with the Millennials. Commercial real estate experts, however, expect there to be a huge surge in millennial home purchases in the 2020s, when a large portion of this generation will be ready to settle down.
4. Small Cities are Becoming Metropolises
Many people love big cities such as New York and Los Angeles -- they have incredibly diverse cultures and they seem to operate 24 hours per day. There is just one problem: These cities are extremely expensive to live in.
However, the high demand for the easy access of an urban lifestyle -- especially by the millennial generation -- has led to interesting shifts in the culture of smaller, less bustling cities. Many small cities are transforming into 18-hour cities, which are microcosms of their much larger 24-hour counterparts. As a result, commercial real estate investments are surging in these areas.
5. A Spike in High-Tech Photography
Just about every industry, including commercial real estate, has succumbed to the influence of the web. As such, a high percentage of commercial real estate transactions begin via an online interaction. This increased use of the web has led to a high level of competition to attract the interest buyers, renters, investors, etc., especially on listing websites. In order to stand out from the crowd, people are taking better pictures of their properties. And this doesn't just mean HD photos with the latest smartphone, either. High-tech photography solutions, including DSLRs and even drones (for aerial shots) and 3-D virtual tours are becoming the norm.
. . . . . . . . . .
Commercial real estate has undoubtedly become a part of the tech boom.
As this article has shown, most of the current commercial real estate trends revolve around our burgeoning reliance on modern technology, and the digital natives who are most likely to use it (Millennials). Anybody who wants to keep up has to take technology seriously, and figure out how it can benefit their commercial real estate endeavors.
Want to learn more about how the latest CRE trends should be influencing your investment decisions? Contact Andrew Jubelt at ajubelt@avant-capital.com or 212-231-9779.
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