It’s no secret that the pandemic of 2020 upended every facet of living. This included the commercial real estate market. During the current year, and the years to come, what will happen to that market as the crisis abates? Real estate professionals, like Simon Kronenfeld, have some ideas of what to expect. Here are a few examples that you can consider.
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Financing is Expected to Remain Affordable
Professionals like Simon Kronenfeld can point to financing for commercial real estate that has remained lower during the past year. The good news is that there’s every indication that the cost of financing is likely to remain steady during this year, and into the next few years. That creates a great situation for anyone who wants to invest in commercial construction, or renovation, as a way to build wealth.
Given the financial beating that many took during the last year, stable interest rates on financing is one aspect that will help to build confidence in the marketplace again. There will no doubt be lingering changes in the way that investors and others approach the acquisition of industrial, office, and retail space, but concerns about increasing interest rates will help provide incentive for people to invest in their communities. People like Simon Kronenfeld will be ready to help buyers find properties that are ideal for their purposes.
Demand for Commercial Spaces is Anticipated to Increase
Among the changes that professionals like Simon Kronenfeld anticipate is the fact that some corporations will continue to operate with a combination of centralized work spaces and telecommuting. Simply put, the past year has proven that some work can be done from home just as effectively, and perhaps even better, than in a traditional setting. Other roles call for being gathered in one location in order to enjoy maximum efficiency.
Some corporations that relied heavily on rented spaces allowed leases to expire in the past year. There was no real need to maintain office space when everyone was at home working. With the pandemic receding, expect to see some of those businesses looking for new spaces that will accommodate the portion of their work force that need to gather.
Small Business Owners May Be Reopening in New Spaces
Big business is not the only type of company that will be seeking new homes in the coming year or two. Professionals like Simon Kronenfeld have already noticed trends of smaller business owners rethinking how they use gathered space. In some instances, that may mean renovations. At other times, it may mean moving to new spaces altogether.
What motivates the move? For some, it may be a matter of square footage. According to Simon Kronenfeld, businesses may not need larger spaces, so they look for smaller ones that are a better fit for their needs. Location may also be a factor; situating a small business so that it’s more conveniently located for a larger share of the customer base could mean an increase in net profits.
Renovated Commercial Spaces Could Be the Rage of 2021
With a possible demand emerging for smaller commercial spaces, what will happen to those larger ones? Renovation may be the answer, according to real estate professionals like Simon Kronenfeld. Larger spaces may be converted into smaller ones that allow businesses with similar interests to occupy areas that are adjacent to one another.
Consider how this could work for a manufacturer who will now function with a minimum of clerical space while maintaining most of a production floor. The space that’s now freed for other purposes could be renovated to house one of the manufacturer’s main suppliers. Both parties benefit from the proximity and the resulting savings in transportation costs.
Increase in the Demand for Commercial Spaces in Less Populated Areas
A greater share of the populace working from home could create a demand for more commercial spaces outside what has been the norm before. As Simon Kronenfeld, people who used to drive past multiple commercial spaces on the way to and from work were more likely to stop and purchase whatever they needed. Working from home eliminates the commute, and could make some of those stores, and other commercial spaces, disappear.
The result is that there may be an increase in the demand for commercial spaces that are closer to the residential areas where telecommuters live. It’s much more convenient to pop out and travel five minutes to do some shopping than having to drive for a half-hour each way. The result may be an increasing number of retailers, restaurants, and other commercial spaces settling in areas where they are more easily accessible, according to Simon Kronenfeld.
Keep in mind that real estate professionals, like Simon Kronenfeld, remain open to new information as it becomes available. This will mean that predictions for the future of the commercial real estate market may change, as unforeseen market trends emerge and impact the way investors, builders, and buyers conduct themselves. Keep up to date on the latest data about what’s happening, and never hesitate to restructure your planning if that new data indicates that doing so would improve your circumstances.
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