Commercial real estate has long been an attractive market for investors and developers. Businesses of all kinds, for instance, need to rent office and retail space, so there have always been plenty of opportunities to find local tenants or interested parties.
But the world is changing, and shifts in the way people work and shop have impacted the way commercial spaces are used. Remote work arrangements and e-commerce are becoming the new norm, and real estate professionals must adapt to these trends if they hope to succeed.
Below, five members of Forbes Real Estate Council discuss some effective ways for investors and developers to approach the changing commercial real estate market. Here’s what they advise you consider:
Members discuss some things to keep in mind about commercial real estate as you plan ahead.Photos courtesy of the individual members.
1. Offer Adaptable ‘Blank Canvas’ Spaces
We believe commercial space should adapt with the internet in mind. Commercial space, especially office space, should cater to companies that are internet-based. For retail space, landlords should offer a “blank canvas” built for the 21st century. A space should appeal to Dunkin Donuts (old), or an Amazon grocery (new). – Otto Bonahoom, Bohouse
2. Help Build An E-Commerce Infrastructure
The landscape of viable investment options in commercial real estate is changing in many ways due to the nature of the internet and growth of online shopping. Previously, many were focused on indoor malls, outlet malls and shopping centers. Now we focus on industrial distribution centers, data centers and multi-family apartment communities. – Dwight Kay, Kay Properties and Investments
3. Mix Retail With Residential And Professional Services
Investors are looking to diversify their portfolios to protect against a significant downturn within any specific segment of the industry. Having a mixed-use component of say, medical office within retail centers, or multi-family within larger retail malls, is a hedge against a retail downturn. Recently we’ve been seeing larger vacant big-box space being reused as self-storage or apartments. Creativity, flexibility and forethought will prove to be effective traits of successful landlords. – Jeffrey Halbert, Blackpoint Group
Read more in Seven Smart Strategies For Making Mixed-Use Property More Profitable
4. Keep Up-To-Date On Changes
Focus on educating yourself on the changing uses of commercial space to stay adaptable. Consider if the trend can perform in both good and bad times and if it is compatible with your core values. – Darin Davis, Presario Ventures
5. Consider Use Of Space
Investors and developers have to consider the impact of technology, automation and the future of work. We live in a world that is on the cusp of eliminating entire classes of employment. In that context, how can you create usable spaces that can meet multiple demands? How should buildings and spaces be designed such that their primary use can be altered? Answering these questions are key. – Angelique Brunner, EB5 Capital