Safe Bets on Commercial Real Estate Trends in 2018

Although some people still claim that it’s almost impossible to predict how a certain industry will fare in the near future, commercial real estate offers us many indicators that we can use to make some sound predictions.

The change in demographics is one such factor. Baby boomers are now smaller in number than millennials, and most consumer spending in this field is made by people yet to reach the age of 40. When we couple that information with the fact that both groups are now leading similar lifestyles, we can conclude that some changes will be occurring in the way how commercial real estate market responds to the demand.

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More efficient offices

With more and more people opting to work from home and the constant rise of the popularity of co-working, it’s clear that companies will try to shrink their office footprint, thus lowering costs without affecting productivity. This trend doesn’t suggest, though, that there will be no demand for office spaces in 2018, but it simply indicates that there will be some specific requirements that many companies will make when choosing and organising their office space. Developers and property owners will have to provide functional spaces at great locations and create an environment that fosters flexibility and green design. Only the best construction material, such as that provided by AIMR, will be used, since the new buyers won’t settle for anything but premium products.

Industrial market to continue going strong

Ever since e-commerce entered the world of business, the industrial market has been trying to respond appropriately. Although some predictions were grim about the future of industrial real-estate, it’s clear that it is still an extremely important line of business. Namely, with consumers expecting more goods delivered even more quickly, retailers are increasing their inventory volume. Warehouses and distribution centres are being built more densely, thus getting closer to end-buyers.

Retail, multifamily, and industrial industry

The fact that the number of stores is now higher than last year means that there will be an increasing demand for such real estate, but that doesn’t mean shopping malls will be built. Instead, we may witness small stores trying to find an appropriate place that already exists, but which can still be redesigned and remodelled to serve the new purpose.

There is a slight drop in the interest in multifamily real estate, but that is only seen as temporary, due to the shift in demographics. On the other hand, the focus on industrial construction will definitely have an impact, since more developers could decide to focus their attention on this segment of industry.

Connectivity remains the key

One of the most important elements that businesses will look for is top-quality connectivity in the spaces they occupy, particularly the offices. All occupants will expect to be provided with excellent cellular service throughout the space, since communication is the key to so many businesses nowadays.

What we can say with great certainty is that the focus will be on efficiency, great locations, and application of state-of-the-art technology, which will assist those who occupy the space. The real estate industry needs to respond appropriately and it is expected to rise up to the challenge. Knowing exactly what the trends are, and correctly predicting the upcoming ones will make it possible for the most successful companies to overcome any potential obstacles that might arise due to various types of economic turmoil.

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