While COVID has certainly left its mark on 2020, there is still much to be hopeful for in the commercial real estate field. As we prepare for a new year, we should take a moment to consider the ways in which commercial real estate is already adapting to new challenges. Here are just a few trends to look for in the new year.
- Open Office Plans
In places like Silicon Valley, open office plans have increasingly become the norm at top companies. Expect the rest of the country to follow suit in 2021.
- Hybrid Work Environments
The Coronavirus outbreak has shown that working from home is a feasible option for many employees. However, many employers still see value in retaining the team ethos that is central to so many office cultures. Look for a hybrid of the two styles of working to emerge in 2021.
- Expansion of Company Locations
In places like Silicon Valley, Los Angeles, and Manhattan, rents are becoming unaffordable for even the most promising startup companies. In 2021, expect to see more great startups and established firms stake their real estate claims in cities like Austin, Texas and Provo, Utah.
- More Onsite Perks
At many leading companies, hiring managers attract top-flight talent by offering a smorgasbord of onsite work perks. Watch for more companies to follow suit next year.
- International Investment
Even during the recent economic downturn, real estate moguls saw big returns on their property investments. Because many foreign entrepreneurs see American commercial real estate holdings as solid investments, expect property prices to continue to climb throughout 2021.
- Most Domestic Business Will Come From Existing Clients Until a Vaccine is Released
In the wake of COVID, conversely, few smaller American companies are venturing to rent new properties. However, many investors are seeing steady business from existing clients. Once vaccines are widely available, expect to see more businesses entering the market.
- Offices in Cool Neighborhoods
In many cities, up-and-coming businesses want to be part of their community’s cultural scene. As social distancing restrictions are ratcheted down after vaccines are distributed next year, expect to see businesses expand their office locations to more arts districts throughout the country.
- Market Turbulence in Mid-to-Late 2021
It’s no secret that COVID has had a big effect on the global economy. Things aren’t as dire as experts predicted they would be last spring; however, Americans might be reticent to spend money once the collective all-clear is given after a vaccine is released. Of course, another stimulus package might change that.
- Construction Will Continue to Grow
Six months ago, experts weren’t sure how the construction industry would fare in the wake of growing concerns about the Coronavirus. Thankfully, construction in most areas hasn’t taken too big of a financial or operational hit. With luck, construction companies will continue to expand their operations throughout 2021.
- More Independent Operators
As a growing field, it is no secret that commercial real estate is attracting a new generation of investors. Expect to see much growth over the next five years as independent operators compete for business in up-and-coming cities across the country.