The drivers affecting the need for commercial real estate are always changing. Especially after the recession, the landscape of the commercial real estate market shifted drastically. How are companies, today, strategizing for their spacing needs to ensure they have the room to operate efficiently, but also to minimize their financial risk?
According to a recent industry report by Hoovers First Research, there are four main trends happening in the commercial real estate industry:
Demand for Office Space Depends on Industry
When the recession hit, many business services employers had to reduce their workforce, therefore, decreasing demand for office space. Although it has rebounded in the past several years, there are new factors affecting space requirements, such as office policies where employees can work from home. Demand for office space within the technology and medical sectors remains strong.
Rent vs. Own
More and more companies are choosing to rent their facilities rather than own them. Not only is this a way for them to control costs, but it also allows firms the flexibility to reduce their space by not renewing a lease if the economy slows down instead of being stuck with a facility that has no use.
Retail Market Analysis
With the retail market being dominated by e-commerce, commercial real estate companies are becoming more specialized in shopper trends, demographics, and internet shopping in order to adjust to the changing retail environment.
Instead of building new facilities to support growth and expansion, firms will often seek to acquire another company in order to expand their reach or services.
Source: Hoovers First Research