Posted on Dec 27, 2017

6 Commercial Real Estate Trends to Watch in 2018

commercial real estate trends

Commercial real estate consulting professionals and investors saw significant growth in both 2016 and 2017. These same individuals are expecting 2018 to be another impressive year in the CRE industry.

 

  1. Diversity in the Workforce

 

Trends in the commercial real estate industry tend to follow business world trends. While C-suites continue to be occupied by women and minorities,

 

  1. Millennials

 

A clear desire among millennials is to reside in the city and gathering around “never sleep” communities. Furthermore, millennials shop differently than older generations by utilizing e-commerce sites to complete their shopping needs rather than the traditional shopping methods with brick and mortar businesses. In fact, a powerful effect has already been felt on retail. However, the e-commerce industry will receive a boost because of this, benefiting both the retail sector and industrial sector. Rather than risk shutting down, the e-commerce trend needs to be adapted to by big box retail chains.

 

  1. Aging Population

 

The sizeable baby boomer generation will have a significant impact on healthcare as well as housing. Boomers, particularly empty nesters, are relocating to urban centers, saying goodbye to suburban communities. Medical retail, such as walk-in care centers and urgent care, is expanding due to the boomers. Healthcare centers across the nation are being converted from obsolete strip malls beginning a trend.

 

  1. Mobile/Remote Workforce

 

As more companies begin to use mobile workspace, we will continue to see the co-working trend rise. However, people still have a desire for personal contact and want to have proximity to others. While remote workplaces are not bound to overtake commercial office space locations in the near future, consider this in the way you should approach searching for potential office space clients.

 

  1. Alternative Financing

 

Private equity funds, as well as other types of lenders, will fill the breach left by banks who are controlled by new regulations. Although, expect higher rates from these financial institutions.

 

  1. Focus on Mix-Use Developments and New Urbanism

 

Populations have begun to relocate their residences in urban centers, bringing a renewed focus on shared services such as bike-sharing facilities, Lyft, Uber, etc. With the use of mix-use developments in both the suburban areas and urban areas, the older generations and millennials are allowed a lifestyle of genuine live-work-play; where driving is not a requirement while living in a walkable area. Where people reside and work is beginning to be shaped by public transportation.

 

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