2021 will bring major changes to Commercial Real Estate
1. CoWorking is not dead
WeWork almost ruined CoWorking and the industries around it. While this was a purely venture capital problem, it had no relation to wider industry changes due to technology and the nature of work in itself. Advances due to technology, remote work, mobility, and digital nomads were already trending prior to COVID-19.
CoWorking will continue to be a viable option as companies cut costs, hire distributed workers, and use available options to reduce office space costs.
2. Shorter Lease Terms
Companies will no longer sing multi-year leases tying them down to physical locations. The pandemic resulted in higher productivity in many industries as many employees worked from remote locations. This benefitted companies greatly, and more companies opt not to renew long term leases, opting for shorter terms instead. This will continue well into the next 24 – 36 months.
This also means companies can invest directly into their core businesses without the overhead cost of long term leases.
3. Warehouse leasing will remain strong
From same day delivery to last mile operations. Distribution, especially in retail operations that feature well known companies like Amazon, Phlatbed, Dolly, and Convoy will continue to be hot. This is primarily driven by consumers that expect items delivered directly to them. Increasingly, retailers are also converting their stores into quasi-warehouse operations as part of their same day delivery competition.
Notwithstanding, and over saturation o18f warehouses could be a downside over the long term.
4. Subleasing will stay hot
Smaller companies, and larger companies will sublease working space between each other as options become plentiful. Companies with flexible staff will utilize the overlapping availability to support other companies. This helps smaller companies maintain some work structure should they choose to have a physical location.
For this reason, we will see plenty of changes in 2021 in the commercial real estate market. In a nutshell, it will be a renters market. Savvy realtors and brokers should prepare for a changing industry by implementing tools to help track their deals, leads, and company performance. CRM built for this purpose like Relotis helps small to mid sized real estate firms unclog their sales pipeline.