The 2019 Deloitte Commercial Real Estate Outlook has been posted, and it’s giving a lot of juicy insight as to what investors and realtors alike can expect in the coming year. While there’s too much to bite off all in one article, we’ve put together some of the top takeaways that you won’t want to miss. Read on to discover some of the trends in the commercial real estate market that may impact your investments as the New Year rapidly approaches.
The term capital commitment refers to any monies that a company intends on spending on long-terms assets over a given period of time. In the case of the coming year, it appears as though more and more companies are planning on investing larger amounts in commercial real estate than years past. The United States, Germany, and Canada appear to be at the forefront of this trend, paving the way for what is believed to be a growing number of investors throughout the course of 2019.
In the past decade, commercial real estate has begun to look a lot different. The more traditional models of office space, retail buildings, and even medical office space have been consistently getting replaced with more functional models that break the mold of what’s been considered normal. This is a trend that not only doesn’t show a sign of stopping, but actually appears to be on the increase. So, what is meant by non-traditional?
- Shared Office Space: The ever-growing interest in shared office space has given many more individuals and small businesses access to commercial real estate. This changing model has encouraged the majority of survey responders to agree to increase property investments, with 44% agreeing to more flexible leases.
- Mixed-Use Buildings: More and more commercial real estate buildings are also converting to mixed-use, as opposed to being primarily used for one facet of the CRE industry.
- Changing Medical Models: The medical sector of the CRE market has perhaps been the most affected thus far, and it appears that this trend will also continue. The emergence of mobile healthcare units, urgent care centers, and traditional doctors’ offices offering access to on-site specialists continues to boom. With the rising demand for medical care, creativity in this sector is certain to continue.
No matter what sector of commercial real estate you are watching, the top factors to consider remain the same. The outlook for 2019 still relies heavily on location as a prime consideration for a top-quality property. This is particularly important as more and more people move into urban areas. Additionally, consumers and clients are still seeking a user-friendly experience, regardless of the industry. For retail stores, this may mean more interactive displays or easier returns policies, whereas for medical office space, this means an increased demand for a quality experience with speedy check-in/check-out, while still getting the one-on-one time expected.
Technology still leads the way, as more and more investors plan on putting their money into existing companies or new prospects that prove their ability to adapt with fluctuating trends as they arise. Ideally, their top interests are in companies who show a willingness to think outside of the box and consider the new business models showing up, as well as companies who are looking to adopt a vast array of new technologies as they present themselves, in an effort to get their buildings equipped for the future of business. The reason for this is likely the large impact that investors have been able to see in the past three years from companies that have employed some of these technological advancements.
This is just a small taste of the valuable information offered by the 2019 Commercial Real Estate Forecast, but as you can see, the CRE market is on the rise, making now a great time to invest.
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