The pandemic has changed how industries work, including for Commercial Real Estate (CRE). As world leaders restricted human movement and business hours, and more people opted to work from home, commercial real estate dynamics have changed.
The CRE sector was always quick to get back on its feet from these sudden global events. However, after the dip in business in the 2008 market crash, this pandemic has been the biggest setback to date.
The CRE Industry and the Pandemic: Top Developments
The pandemic had different effects on all sections of CRE, but some more than others. Here’s how.
The sectors that suffered
Sectors like Hotels, Retail spaces and office spaces lacked demand due to lack of economic activities and social distancing practices. Deloitte data says that CRE business in the US alone declined by 27% in the first few months of the pandemic itself. In 2021, more than 78% SMEs mentioned that they are struggling to make rent and are running behind on payments. This is not only bad for their business but also makes life harder for all property managers.
The sector that thrived
One sector of CRE that did not suffer but actually thrived during the pandemic is the warehouse and storage business. When people couldn’t physically go out to shop, e-commerce sails soared by 15.7% in mid 2020. By 2022, the of e-commerce is now booming. It is now thriving so much that companies are investing in extra warehouses to help keep up with the demands.
This has positively impacted CRE business owners who dealt in this sector. Amazon alone increased it number of warehouses from 4 to 21 within the last two years. In reality prices for warehouses were way higher than office spaces and other such commercial buildings like hotels. Real estate property managers and owners saw a major opportunity in this and even earned hefty commissions to bridge the gap between lack of supply and increased demands.
The Way Forward for Commercial Real Estate
Many adverse events started playing out since the onset of the pandemic. From restrictions in movements to complete lockdowns, businesses have seen and lived through all kinds of adversities. This is exactly why real estate business owners need to rethink their strategy and leadership plans to recover and come out stronger from these unforeseen situations.
PropTech
Managers, owners and real estate agents are now using property management software to ease their way into the post-pandemic world. Though property management software were already on the rise, the pandemic give it an even bigger push.
The world is now online and real estate is also looking for tech based solutions to their management plans. Canadian real estate developers believe that PropTech is the future for growth in the real estate market post-pandemic. From AI-based virtual chatbot responders to customer queries to virtual home tours with latest software usage, PropTech can help with all.
But the technology selection in project management can be an overwhelming change. Nevertheless you need to embrace this change to beat the pandemic blues. You can get outsourced help from the Assetsoft consultants to guide you on this journey to select the right technology for your property management needs.
Hybrid real estate
Most real estate owners are now trying to find ways to bring in new avenues of change in their commercial real estate spaces. From hotels offering workation options to cafes and restaurants offering whole day work packages, we have seen it all over the last two years. This quick response to the changing state of the pandemic is what has helped businesses thrive.
If you are a property manager and owner you need to rethink your business plan and adapt. With the advancement of remote work you need to find ways to offer leisure and reliable workspaces at the same location for people to get in business with you. Research believes that commercial office spaces will eventually downsize due to lowering demand and come up with more open spaces to help people relax at work.
Make proper recovery & relief plans
Make and have set plans in place for the future. Where you have some safety net to fall back on in case of further unprecedented situations like the pandemic. Yes, we are all getting back to normal, many states have even lifted compulsion on masks, but no one knows what lies ahead. Just like this pandemic hit us from the blue. This is exactly why going forward your CRE business needs to have contingency plans in place to stay afloat during a crisis.
Assetsoft Can Help You Move Forward Post-Pandemic
Though we are all adjusting to the new normal, but it will take a huge time for everything to be completely “normal”. This is exactly why you need to be a resilient leader and accept the positive changes that the pandemic has brought in. From advanced use of PropTech to better recovery plans, the adverse pandemic situations has taught real estate biz to adapt and learn new things.
The Assetsoft team specialises in these rising tech trends in real estate. We provide you with the best selection of technology in project management. From systems integration, business process improvement to implementation of the latest software, we will be there every step of the way. Our team of experts works with ERP systems like Yardi systems, MRI software and many more to automate and digitize your property management plans.
We help you select the technology that is best suited for your growth amidst all the impending problems of the pandemic. No more falling behind on your growth plans due to lack of the latest tech in the market. The Assetsoft team is here for you. Book a free consultation with our team of consultants to know more about our systems and services.