E-commerce is expanding, businesses are shifting to a remote workforce, and environmental factors are playing an increasingly important role in investment decisions. It’s a good idea to keep up with 2022’s commercial real estate trends, so you’ll know what they mean for investors.
1. E-Commerce Boosts Warehouse and Storage Property Sales
With many retail companies shifting part of their strategies to e-commerce, there is a growing demand for inventory storage space. There’s also an increase in small business ecommerce storage facilities, including self-storage units for the self-employed and entrepreneurs.
Warehouses, industrial properties, and self-storage facilities will continue to be an integral part of businesses moving forward. Savvy commercial real estate investors will look for centralized industrial properties with easy access to main roads and highways.
2. Environmental, Social, and Governance Considerations for Investors
Commercial properties aren’t immune to environmental concerns. Those that focus on energy efficiency can increase profit margins for property owners, along with a boost in name recognition and reputation. Additionally, investors will benefit from governmental grants, more profitable tenants, and exclusive lending deals. Green buildings with environmental certifications will enable owners to charge rents up to 10% higher on average.
Environmentally friendly investments are becoming key components of a successful real estate portfolio.
3. The Demand for Retail Property is Declining
Due in part to the growth of ecommerce opportunities, many businesses are giving up large retail spaces. This doesn’t mean the days of brick and mortar stores are completely over, but it does mean that investors will need to dig deeper into the data analysis before making decisions.
The sustainability of retail properties will depend on the tenants’ choices to take an omnichannel sales approach, which includes online shopping and ecommerce as well as a physical location.
4. Businesses are Seeking Shorter Lease Agreements
Factors such as remote and hybrid working options for employees mean many businesses are reluctant to sign long-term commitments on properties. They’re seeking to downsize their offices in the face of new work models, preferring smaller spaces.
Flexibility, such as shorter lease terms and offering smaller spaces, is the key to marketing commercial spaces to businesses still trying to make long-term decisions about the sustainability of their employees’ working models.
5. Malls Present Unique Opportunities for Investors
Shopping malls were already losing popularity amongst consumers, and the shift to ecommerce is sharpening this decline. Property investors are looking at purchasing mall complexes not for retail, but for other purposes like residential properties, health facilities, warehouses, and industrial complexes.
Most malls already hold an advantage over other properties with a centralized, easily accessible physical location.
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