Commercial real estate in 2023 reflects a shift in how business is done. After the past three years, the tenant pool continues to drive changes in commercial real estate.
We all breathe a collective sigh of relief that much of life is normal. It remains clear that most industries, commercial real estate included, are in transition from pre-2020 to post-2020 operations. This transition period could last a while. Buckle up. Let’s look at the best ways to ride the transition period out in commercial real estate.
- Online search for properties is essential.
- Remote work is permanent.
- Collaborative office spaces sought after.
- Interest rates affect transactions.
- Expenses due to inflation are an issue.
Online search for properties is essential.
Dear fellow commercial real estate agents, please hear this plea. Potential tenants will absolutely do their own searches online. They want to find the property first. If you’re not listing and using every online resource available, you’re not doing your job well.
For most entrepreneurs, they’re searching privately before they ever make a phone call to see retail or other commercial space. List your space in every free listing service available, utilize all the paid listing services at your disposal, and consider the benefit of creating a website with great SEO to help entrepreneurs find your property.
The volume of available property may be extremely high depending on your location, but it is imperative that you market your spaces well. Utilize on-site marketing for the space that includes a QR code for quick scanning to advertise your space. The goal is to make it easy for the potential tenant to find the space.
Be sure to include all relevant information in your property listing. Not all entrepreneurs are experienced in commercial property and zoning, so providing more information to the consumer is necessary and helpful.
Remote work is permanent.
Remote work was necessary in 2020. Many workers see remote work is a viable option across industries and are not eager to return to the office. Whatever the reason for the preference of remote work, it is a permanent factor in doing business.
Many companies will maintain a remote workforce, many will use a hybrid remote/in-office workforce, and some industries must return to in-office completely. This will impact the future of commercial real estate. Finding solutions for potential tenants will enable you to adapt your business because remote work is not going away entirely.
Collaborative office spaces sought after.
As remote work remains the preferred choice post 2020, collaborative spaces are a great solution to utilize existing commercial property in a meaningful and beneficial way. According to Zippia, “68% of American would prefer to be fully remote.” (Zippia)
The article from Zippia on remote work statistics is fascinating and worth a read. Find it here:
How do remote work and collaborative spaces go together? Companies moving toward a permanent remote or hybrid work solution recognize the need for flexible working space. Commercial tenants could consider downsizing space or subleasing current space if it is more than they need in a post-2020 world. Collaborative workspaces allow for smaller square footage to accommodate those who prefer an office work environment and for those specific times when an in-person meeting is required. These types of spaces allow for flexibility and are less confined without walls, partitions and barriers. Additionally, it allows for creative lease options if interest on a particular property has stalled. In commercial real estate, it’s better to be creative in marketing a property than to be stuck sitting on a property that won’t budget because of lack of creativity.
Interest rates affect transactions.
Current interest rates are no longer surprising to anyone. They do affect the market and impair people’s ability to buy property. Banks are less willing to lend, and it’s much more expensive to borrow. With some commercial lending rates reaching up to double digits, entrepreneurs are slowing down on borrowing while lenders are slowing down on lending. It’s not a sustainable situation, and it’s unclear how long it will take to ride it out.
Expenses due to inflation are an issue of concern.
Everything is more expensive. That’s not an exaggeration; it’s a fact. As a result, entrepreneurs and potential tenants exercise caution in spending even if it slows down their business growth. As a commercial real estate broker, we aren’t exempt from the pain of inflation either. As a result, it’s essential to continue to adapt in business as well.
At Weaver Realty, we work with our clients to keep their business growth moving. We make it easy to find information on success in growing a business in self-storage or in other commercial properties. We would love to work with you as your grow your business. Call us today 904-733-0039
Zippia. “25 Trending Remote Work Statistics [2023]: Facts, Trends, And Projections” Zippia.com. Jun. 13, 2023, https://www.zippia.com/advice/remote-work-statistics/
