Real Estate Investment Trusts Continue Their Development Plans
While COVID placed a halt for countless operations, some companies decided to maintain their functions as much as possible. Real estate investment is an ideal example, actually experiencing boosts in buyer interest and other incentives.
We also have several cases of development companies and investment trusts maintaining their projects despite the crisis. As the crisis starts to calm down, companies start to bet on the future for big cities, mainly Toronto and Las Vegas, as we’ll dissect in a moment.
Toronto: Dream Office REIT Moves Ahead With Extension Plans
As ConstructConnect explains, Dream Office REIT is betting noticeably on Toronto’s future. Focused on King Street, the Canadian investment trust is continuing development with a 79-story building.
This project basically merges three different buildings into a single tower for mixed usage. It’ll include 588 individual units for rent, making up 10,000 sq. for retail space and 660,000 sq. for office spaces.
Humbold Properties Also Joins the Plan
Dream Office REIT has been the main focus for most reporters, but as we can see from the ConstructConnect report, Humbold is also taking a similar strategy. In fact, both companies’ projects take place in the same districts within downtown Toronto.
Humbold’s project mainly consists of a bought building from Canadian General Electric. This building has experienced extensive transformations throughout the year, turning it into Entertainment District. Current developments include adding two new halls to the building.
A New Approach to Construction Development
Both projects draw their inspiration from the buildings before them. The main focus is to create a more sensitive feeling to the design of skyscrapers. One of the architectural firms has stated that the need for innovation must collaborate with sensibility and real contribution to the city’s life.
Interestingly, there’s lots of attention to detail when developing buildings that usually focus more on practicality than an “artsy” approach. The objective behind this strategy seems to be to elicit an emotional response from the people around it.
Las Vegas is Experiencing a Similar Trend
On the other hand, the Las Vegas Review-Journal has another article detailing similar development plans. In the article, the main focus is an interview with Jeff LaPour, one of the developers behind the explained projects in the report.
The developer currently works in an office building within Las Vegas, and the goal is to resume its construction in a few months. The building is four stories tall with 100,000 sq. While the office focus might be surprising, the developer has strong hopes in its returns.
Investment is Still Strong
The project is actually leased in its 35% with investors including G2 Capital Development. However, there’s already a likelihood for other investors to take the remaining space. Therefore, there seems to be no lack of interest in the project.
Site work and utilities were ready by the time COVID hit, pausing development since April and spurring significant job losses. Despite that, it seems the project is ready to resume.
The Office Market Isn't as Promising
Office real estate has seen some of the worst repercussions in the real estate sector. That’s mainly because of how many companies and businesses had to close several retail installations. As social distancing became vital, remote working turned into the standard.
That means office space isn’t as fundamental today as it used to be, and this trend seems to remain as the world recovers from the pandemic. Office leasing saw noticeable declines in activity as a result.
Experts Agree the Halt is Momentary
However, LaPour is confident that office real estate won’t experience permanent changes. Collaboration is an often-quoted important factor for business growth. Additionally, social distancing might require less-populate offices, thus driving the need to acquire more office space.
According to the developer, office real estate is vital for any business. We can agree with that statement, yet adaptability to new trends might be vital for its profitability.
What do we Think?
Retail and office markets within real estate aren’t likely to disappear. Centralizing operations is a big advantage for many businesses, and not everyone can work from their homes indefinitely. Distractions are too plentiful at home for countless workers.
However, we’ll definitely experience a noticeable shift in how much of a priority office space will be. That said, newer trends like coworking might breathe new life into the office sector for real estate.
Whatever happens, you need to be ready for what’s coming next year. Knowing what you can expect is a key advantage when making investment choices. That’s why we’d like to invite you to join our newsletter, where we curate all the information you need to achieve that goal.