Real estate development and investment have long been seen as some of the best ways to make your money work for you as it has traditionally offered solid returns and stability.
However, real estate, like every other business sector, has been greatly impacted by the global pandemic. Going forward, investors and developers should keep these three things in mind.
Office space demand
The necessary shift from in-office staffing to remote workers will likely significantly affect demand for office space. Target recently announced it planned to abandon its huge Minneapolis headquarters, shifting most of the 3,500-person workforce to remote status or smaller offices.
Many other businesses have also said they plan to permanently shift to increased remote staffing or smaller workplaces for employees. While large office spaces will likely be less in demand in the future, smaller retail properties could be more attractive.
Buying and selling property digitally
Commercial real estate acquisitions experienced a slowdown due to the pandemic, but did not come to a halt. Instead, many sellers and buyers took advantage of technology to inspect properties and complete transactions. Sellers should focus on giving potential buyers a complete view of property using video and photos.
However, buyers should be aware that photos can be digitally altered to spruce up “fixer-upper” properties. That’s why it’s better to work with sellers with systems, such as live video or augmented reality (AR), that provide the most accurate picture possible.
Shifting property values
Regardless of the type of property you currently own or want to buy, expect a big shift in commercial real estate valuation. If you have large office spaces sitting empty, it might be a good idea to sell before those properties greatly depreciate.
Likely opportunities for investors are in smaller office spaces, which may be in greater demand as companies rethink the size of workplaces. It’s advisable to explore these properties, especially in prime locations, as their values are expected to rise.