The commercial real estate industry is thriving.
Based on a recent report that Capital One inducted from MIT’s Center for Real Estate; “We are at one of the longest periods of sustained growth ever in commercial real estate.” Below we have identified a number of key trends real estate professionals should acknowledge as they prepare for the future.
- First and foremost, mixed use developments!
“There is reason for continued optimism across all asset types, but mixed-use developments have significant potential for maximizing upside while insulating investors from the challenges affecting any one sector.” Mixed-use developments can bring about higher rents and higher rates of return.
- A target on smaller, strategically located stores
“The upsurge in online sales has led retailers to focus on smaller, more strategically located stores and in-store experiences that draw and engage shoppers.”
- There are discouraged traditional investors in some multifamily markets
“The combination of rising valuations and trailing absorption is discouraging traditional investors in some multifamily markets.”
- Last but not least, office space demand is quickly decreasing
“Flexible spaces, open floor plans, and telecommuting have lessened the demand for office space.”
All of these trends together have contributed to the overwhelming insistence of mixed-use developments.
“Our researchers have captured the commercial real estate industry at a moment of transition. Borne out of necessity during the downturn, new business models and technologies are maturing, and real estate uses are converging to form new and exciting product types. This presents tremendous opportunity for developers, owners and investors going forward.”
In conclusion, it’s the hour for real estate professionals to delve into new types of properties and projects. See more details here.