August 23, 2019
By Patrick Roberts, Director of Lender Strategy, MountainSeed
Commercial real estate trends continue to emerge as we move into the second half of 2019. From market predictions on commercial real estate, to millennials making an impact on a retail resurgence, here are three industry insights to keep on your radar.
Online shopping means retailers need to think outside brick-and-mortar box.
Online retailers are slowly and steadily penetrating the market share, but that doesn’t necessarily mean death for brick-and-mortar stores. Instead, these spaces simply need to rethink their strategies by offering customers unique environments optimized with the latest technology and outfitted with immersive in-store experiences. In fact, in the oversaturated e-commerce world, many successful online retailers are now moving into the physical retail space to set themselves apart from the competition, which offers customers a more personalized in-store experience.
Millennials are driving the commercial industry in a new direction.
It’s officially the age of the millennial, and this demographic cohort is credited with sparking changes across every industry, including the commercial real estate industry. Millennials are responsible for driving industry trends like coworking spaces and tech-savvy amenities. Millennials appear to work very differently than previous generations, and so they require innovative working environments where they can telecommute, work remotely, and even host their startup companies. By 2020, millennials are expected to make up 50% of the global workforce, making their influence all the more powerful.
Now is the time to invest in CRE.
While the market downturn that’s forecasted for 2019 seems foreboding — especially in the case of shared ownership — the downturn actually presents a prime opportunity to invest in commercial real estate. CRE tends to return more than the residential market, especially in a downturn, with between 6% and 12% per annum on CRE and only 1% to 4% on single-family residential properties.
Ultimately, commercial investors can gain the upper hand by taking note of these industry trends. Knowing what to expect when it comes to the market, demographic, and the retail space means you can make informed decisions when it comes to next steps throughout the remainder of 2019.
MountainSeed is an Atlanta-based appraisal management and real estate service company.
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