Trends in Commercial Real Estate Investing
For serious investors, commercial real estate has always been a solid prospect. Businesses need locations, and they don’t like to move any more often than the absolute must. A well-maintained commercial property is usually a very sustainable investment. As with everything else in the digital age, however, some aspects of the business model are changing with the times. Here are some of the biggest industry-wide trends to be considered and recognize.
The Pendulum is Swinging from E-Commerce Back to Brick and Mortar
A short while ago, there was panic in the commercial real estate world as it seemed e-commerce was driving more and more local storefronts out of business, creating more supply than demand. Recently, however, a shift has begun as some of those very e-commerce giants are looking to build and buy properties throughout the country for brick-and-mortar outlets. Amazon’s acquisition of Whole Foods has gotten them into the grocery game, even going so far as to open Amazon stores. Expect this trend to continue.
Visual Presentation is More Important than Ever
When selling a home, every realtor knows that the pictures displayed online or in real estate publications must be top-notch. For a very long time, however, commercial realtors held the opinion that their clients didn’t care about visual aesthetics, only square footage, location, and logistics. Another pendulum swing has forced change in this area. Now that high quality, low-cost cameras are readily available, from lightweight DSLRs to high-end smartphones, marketing of all kinds has embraced high-quality photography. This trend is so prevalent that it is essentially the cost of admission to market and sell any product. Realtors need to educate themselves and invest in good camera gear, or higher someone who can make their properties look as good as possible.
Office Construction is Trending Downward
Finally, for the first time in many years, several factors indicate a downward trend in the commercial real estate construction business. There are some industry-wide concerns about the economic cycle or real estate, rising costs of materials and labor, and zoning concerns. It’s more of a thing to be aware of than afraid of, and being aware may lead you to ways to turn this into a competitive advantage.
Investing in commercial properties, like many ventures, has some tenets that are etched in stone, and some that are ever-changing as technology, society, and business move onward. These trends are the latest part of the cycle. Recognize them and use them to be a savvier buyer!