Commercial Real Estate (CRE) was and always has been a dependable form of investment and business. The prices and market for CRE hardly ever went down without any significant economic incident. But the recent two-year-long pandemic and the associated economic turmoil made the CRE market quite volatile.
Many changes in interest rates, supply chain issues, low demand for office spaces or retail shopping areas, and rapid changes in technology selection in the real estate sector have added to this volatility. These rising trends are full of challenges that come with their own set of opportunities, and you can get on top of these trends with the correct planning. But there are no trends you can not handle with a bit of change in your strategy and management systems.
Even though all the uncertainty, market reports have found a 4% rise in the CRE market in 2022, and there are multiple factors affecting this rise. Read this blog to understand how you can steer these CRE trends to work in your favor and make them positively impact your ROI. At Assetsoft, we have carefully curated a list of the top 8 CRE trends dominating the market in 2023.
These 8 trends will drive the CRE market
We are already halfway there in 2022, and these trends are here to stay and make long-term changes in the CRE biz. Check them out and take them into account while planning your strategy and leadership to better your business and management plans.
Retail is being reshaped
Retail shopping was badly hit during the pandemic due to all the social distancing norms and travel restrictions. Leisure shopping or shopping for non-essentials took a backseat. Since then, malls and other retail outlets have been grilling under pressure and are yet to bounce back to their original form. But there is a high inclination toward retail being reshaped. People are now going for hybrid shopping options where they choose a product from a company’s online website or app and place an order. Later they drive by the retail outlet and pick up their order. For this new type of business, retail shops need to replan their inventory management and get in new storage spaces to handle this extra load.
Multi-family homes are in demand
There is a rise in demand for multi-family homes. Why? Remote work is slowly being removed from most company policies, and employees are called back to offices. Many first-time renters, fresh graduates, and college students who had moved back home or to the suburbs during the pandemic are now heading back into the cities. They are all looking for cheap rental options, and multi-family homes are the answer.
The industrial sector is consistent
Industrial construction in CRE is still consistent as before. With the high demand for e-commerce goods and to produce them and get them delivered, the industrial sector real estate remains popular. Factories and warehouse spaces are in high demand to make and store the added orders coming in through online shopping portals. Forbes reports back up these changes; e-commerce saw a 14.2% rise between 2020 to 2021 and a 50.5% rise between 2019 to 2021. Among these, Amazon accounted for over 40% of the sale. This is why Amazon went on to increase its number of warehouses around the country.
Tourism real estate to rebound
Tourism and hospitality real estate are slowly but steadily getting back in business. When the pandemic hit the world, this industry was one of the worst-hit. Travel is treated as one of the most non-essential, and both leisure and corporate took a backseat in people's priority lists. But in the present age, people are rethinking tourism to help beat the pandemic blues. New hotel spaces to encourage “workation” crowds where they offer both working spaces and leisure options under the same roof.
Offices types set to change
The typical office space is being reimagined after the pandemic. Hybrid workspaces with more open spaces and workstations are rising in demand. Both offices and their employees are now focusing on leisure and relaxation offices and work. If you are a real estate property manager or owner of office spaces, you must consider these demands to make more sales.
Investment in technology
The use of PropTech is on the rise. There is much new-age tech that is shaking up the real estate market. You can do a lot with the correct technology, from integrating software like Yardi or MRI to automate your property management work to using autonomous drones for home tours. You can also use RPA chatbots or CRM software to automate customer communication.
Mixed-use properties are rising
Another major CRE trend is the rise of mixed-use properties. People no longer want to travel in their cars and get far from home to access other amenities. CRE is now developing properties and complexes which residential spaces, office spaces, retail outlets, recreational facilities, and shopping malls all under the same compound. This gives tenants are wholesome life within the same compound without setting foot outside or working hard to get to their things of need.
Sustainable real estate is crucial
Forbes news reports have pointed out that real estate accounts for 40% of the global carbon emissions. That is a scary number, and CRE is a major contributor to this problem. But the present tenants or homebuying crowd are the millennials, and this generation is highly conscious about the environment. You need to make an effort to make your real estate more sustainable or try to build zero-net energy homes to cater to this crowd. Why? This generation is ready to pay for more eco-friendly housing options than invest in non-sustainable properties.
Investing in the right technology for your CRE business with Assetsoft
CRE business owners creatively handle the situation to get ahead of the curve. The right innovation, proper strategy, and leadership clubbed with the correct technology selection can do wonders for your CRE business, even if the market is unpredictable.
If you and your team are new at handling technology, then we got your back. At Assetsoft, we have years of experience in the selection of technology in project management. From managing properties and automating construction to asset management, the proper software integration can streamline everything.