Here are the top 4 trends that shape the industry and how investors can benefit from them.
Commercial Warehouse Space
An example is commercial warehouse space. Topping out our list of top 4 trends and investment opportunities in Commercial Real Estate, this market is hotter than ever thanks to the expansion of online shopping. Led by giants such as Amazon, eBay, and Newegg – online shopping makes up nearly 13 percent of all sales and continues to expand year after year.
Large and medium-sized online sites need warehouses to store products, and those warehouses are becoming increasingly costly to find. The cost of warehouse space, as well as the relatively tight land market to build them on, is causing many companies to build two, three, or even more storied warehouses.
Of course, the companies have to use new and innovative ways to utilize the space, but commercial leasing companies report the rents for multi-storied warehouses are through the roof, as companies seek ways to expand.
Commercial Office Space
Commercial office space is going through the opposite trend. Telecommuting is now very common and is just the tip of the iceberg. At the same time office hours, that fit the traditional 8 to 6 p.m. are totally going by the wayside.
Companies are increasingly using shared, co-desk space, which means by the time the first shift has finished working, the second shift of co-workers utilize the desk space.
The result is that office space, in general, is contracting. In addition, companies increasingly look for three things concerning office space:
- They want to be located in the suburbs as the vast majority of Millennials increasingly find the suburbs are more affordable and easy on their family life.
- While they want to be located in the suburbs, they also want amenities nearby such as entertainment, quick shopping, and restaurants.
- To attract most companies to move to a new location, they demand the presence of high-speed internet and video to allow a modern company to operate efficiently, and with technological flair.
They expect furniture that is easily movable at the needs of the company and also favor open offices for meetings.
Affordable, Multi-family Homes
As companies move to the suburbs, one thing that is critical to attract talent is affordable, multi-family homes. Single-family homes, in many parts of the country, run from $600,000 to $1.3 million dollars per year – far too pricey for those without 15 or 20 years of experience within the company. At the same time, most people with families don’t want to live in an apartment. As a consequence, workers demand a sufficient amount of condos and duplexes to live in, and as a consequence, condos, duplexes, and fourplexes are hot.
Shrinking Retail But Still Adapting
There is no question about it. Even a slowdown can be seen in Retail, it still remains one of the top 4 trends. the Any number of big box malls have gone bankrupt as the presiding “main showcase” retail stores – the likes of Sears and J.C. Pennies. On the other hand, brick and mortar stores are not going away anytime soon, though they may be shrinking in size. At the same time, many online shopping companies have opened a boutique brick and mortar outlets to attract high-value shoppers. So look for retail space to hold its own, but stay away from strip-malls, which have a “budget shopper” look and appeal. If buying or constructing a retail space, look to be within a mile or so of a mall, with a nice decor and plenty of parking.
CIVE has more than 15 years of experience in the Commercial sphere and provides top-down Design & Build services to investors. Here are some of the projects we’ve executed.
