Lifestyle changes and increased remote-work opportunities may contribute to a decrease in the demand for commercial real estate. As reported by REALTOR Magazine, the Urban Land Institute’s 2021 emerging trends survey revealed retail vacancies could continue to decline.
Retail stores face competition from online e-commerce platforms. Property owners could, however, adapt and stay competitive by converting their unused buildings. Shopping malls, for example, could convert idle physical retail units to warehouse and order-fulfillment space. To compete with established online sales operations, retailers may benefit from systems enabling shoppers to purchase goods online.
Improvements offering health and safety features
Based on the ULI survey, 82% of the responding real estate leaders claimed tenants’ health considerations will play an important role in how their sectors overcome challenges. Restaurants and hotels may choose to adapt by implementing technology such as sensors and touch-free control panels that offer customers ways to easily maintain physical distancing.
Commercial building owners may have a better chance of finding desirable tenants by replacing outdated HVAC systems. According to the CDC, HVAC improvements help reduce the risk of spreading viral particles. Commercial buildings circulating clean air could help relieve tenants’ and customers’ health concerns.
Reduced office spaces with smaller footprints
At least 60% of ULI’s survey respondents expect commercial tenants to increase their satellite or remote office presence. With more individuals working from home, large units may no longer reflect tenants’ needs. Smaller spaces that accommodate training sessions, for example, may better reflect a company’s hybrid workforce needs.
According to ULI’s emerging trends, the Boston real estate market will reemerge as a major hub. An existing vacancy may, however, require upgrades such as technology or HVAC improvements. Dividing large units into several smaller ones may also help meet the demands of today’s tenants.