Small Business Brief

Real Estate

4 Commercial Real Estate Trends Every Business Owner Should Know

Commercial Real Estate Trends for Business Owners

The real estate industry has been in recovery mode for years. Here’s where the commercial real estate trends are heading and what business owners need to know.

Whether you’re in the process of trying to understand commercial loan rates, or if you’re just trying to decide on your next investment, understanding the latest trends in real estate is absolutely essential.

And while residential real estate trends are certainly important, commercial real estate is often a far more lucrative — and dangerous — territory.

In short, you need to know what you don’t know.

In this post, we’ll walk you through a few of the biggest commercial real estate trends of the moment.

From industrial real estate to the end of the traditional office, you don’t want to miss any of this information.

1. Industrial Real Estate Is Huge

One of the biggest commercial real estate trends that you can certainly expect to see more of in 2018?

Industrial real estate will only continue to grow in popularity.

Especially thanks to the incredible growth of companies like Amazon Prime, which offers same-day delivery in many states, more and more brands are beginning to look for competitive industrial real estate for warehouse locations.

Industrial real estate will continue to explode in areas directly outside of large cities and markets — so it’s time for commercial real estate professionals to start investigating the available properties in suburbs.

Usually, these warehouses are built from the ground up, so the hunt is on — and the competition is fierce — for prime space.

Industrial real estate isn’t only gaining popularity when it comes to large warehouse spaces, however.

Even smaller e-commerce sites are cashing in on the trend. This means that old factories, undeveloped land plots, and other vacant buildings near large metropolitan areas are frequently converted for use as a warehouse.

So, if you’re planning to purchase a warehouse soon, the time is now. Every day you wait, the prices of warehouse spaces only go up.

2. Data Center Space Is Paramount

With over 14 million small businesses vulnerable to hackers, the focus on cybersecurity has now started to directly impact the real estate market.

In fact, one of the biggest commercial real estate trends, second only to the search for warehouse space, is the demand for property to house data centers and servers.

Interestingly, the real estate market for data centers is expected to be especially strong in North Carolina, Oregon, and Illinois. Somewhat similar to the demand for warehouse space, you should expect data center properties to be in close proximity to large cities.

Especially as more companies continue to transition the way they do business from in-person to online (more on that in a minute) the demand for data center real estate will only increase.

In fact, many investors believe that data center real estate will become one of the most lucrative commercial real estate trends in 2018.

These spaces must be highly secured, somewhat remote, but still close enough to major cities to remain accessible to IT professionals.

3. Office Space Is On The Decline

Of course, even in real estate, for every action, there is an equal and opposite reaction.

This means that, especially thanks to the demand for commercial real estate properties like data centers and warehouses, the desire for more traditional office space is on the decline.

This isn’t only because more people than ever are now working from home — it’s also because the demands of the traditional office lifestyle are rapidly becoming a thing of the past.

Many companies in today’s world simply don’t see office space as a good investment anymore. Instead, they’d rather focus their money on technological investments, product development, and even digital marketing.

In other words, our increasingly digital lifestyle has started to impact commercial real estate trends.

4. Short-Term Rentals Are The New Niche Market

The good news, however, is that the decline of the need for a traditional office space has opened up a new real estate market: short-term rentals and co-working spaces.

Instead of buying or renting out a more permanent office building, corporations are now choosing short-term leases for office space. This allows them to save money for more lucrative investments, but still gives them the chance to meet with their team in person on a regular basis.

In some cases, they’re only renting out single rooms for meetings a few times a month.

Again, this is one of the many commercial real estate trends that is a direct result of a more digitally-driven economy.

When it comes to the traditional office, however, there are still some employees that see it as valuable. These employees will rent out co-working spaces.

Essentially, these co-working spaces are offices that are shared with many people, most of them working for completely different companies. Usually, these shared spaces are especially popular in larger cities.

Considering selling your office space for cash, and switching to short-term office space rentals instead?

It’s a wise investment.

Learn more here about how to connect with a real estate agent that can make it happen for you.

What’s Next In Commercial Real Estate Trends?

We hope that this post has educated you about some of the biggest commercial real estate trends.

No matter which industry you operate in, or the current size of your company, knowing where you should put your money when it comes to commercial real estate is especially important.

So, what other trends should you know when it comes to running your small business?

How can you increase office productivity, leverage entrepreneurial opportunities, and improve your customer service?

You can start by reading our website and blog.

We’ll give you access to the hottest tips, trends, and business advice to help make this your most successful year to date.