Whether you are a real estate expert or just getting started in the field, paying close attention to trends in commercial real estate is essential for making smart decisions for your business. The past few years have been an exciting time for the real estate market, and as 2024 approaches, experts predict more of the same, along with a few new changes coming down the road. Learning more about the predictions of what will drive real estate trends in 2024 can help you make the most sound and informed business decisions.
Why Knowing Commercial Property Trends Is Important For Business
Savvy real estate professionals know how to time investments for maximum potential. If you’re just starting out as a commercial real estate investor, timing is essential for a successful venture. The current market can predict future trends, so if you are starting a new business in 2024, take some time to learn about current trends and see what the experts are saying is likely to happen next.
Low-Interest Rates and Mortgages Predicted
Throughout 2023, those purchasing real estate have enjoyed some of the lowest interest rates seen in decades, and this does not seem to be changing for 2022. Low-interest rates give interested parties more buying power and allow people to make purchases that would have been difficult or impossible when higher interest rates drive up total investment costs. Those making commercial real estate transactions benefit greatly from low-interest rates. Commercial loans have always worked differently from residential loans and typically involve higher interest rates. If the base rate is much lower than usual, that means even a commercial loan the lender considers higher-risk would come with a lower rate than in typical times.
Retail Properties Will See a Big Change
If your business involves a commercial real estate purchase in the retail category, it’s especially to keep an eye on the market for 2024. While you still enjoy lower interest rates, the retail market is a little more uncertain due to leftover pandemic effects. One interesting consideration is the number of business owners that have had difficulty during the pandemic and may decide to sell off real estate to recoup losses. These properties may be better deals than in a typical market, but you also have to compete against more investors than usual.
E-Commerce Surges
The pandemic forced customers to turn to e-commerce more than ever, and this trend may never be truly reversed. Now that customers have become accustomed to shopping online, owners of commercial properties need to readjust where money is spent. Although many owners may unload unnecessary properties and therefore increase the number of commercial real estate options on the market, others plan to convert the space instead. These owners may even expand the space to incorporate more in-house production facilities to save on the elevated costs of transportation and shipping from other areas.
The Stockroom Will Become Top Priority
Another unintended consequence of retail e-commerce during the pandemic is the need to keep a larger volume of products in stock for quick shipping. Finding a commercial space with an easy-to-organize stockroom can be at a premium. Many customers prefer to shop with businesses that have an option for curbside or on-site pickup to save on shipping costs without having to go inside to browse. Due to this preference change, many retail spaces have had to accommodate pick-up transactions and extra inventory organization areas.
Office Demand Rebounds, Propelled by Hybrid Models
In the world of commercial real estate, office buildings have always been a solid investment. Owning an office building with successful businesses has always been a way to guarantee steady rental income. During the pandemic, many businesses allowed employees to work remotely and discovered that remote or hybrid models work in the long term. This trend is expected to continue into 2024, with businesses changing spaces from dedicated offices to collaborative rooms and hybrid workspaces.
Three Trends That Will Drive Real Estate in 2024
As the end of 2023 approaches, real estate professionals have been focusing on predictions for 2024 to drive investment decisions. During gatherings of successful real estate minds, several new trends have emerged. The ability of the real estate market to adapt and change during trying times is a positive attribute. Using this information, investors can make more sound decisions.
A Focus on Green Building
Commercial real estate investors have seen a trend toward green building initiatives that are not expected to slow down in 2024. Many office and apartment building tenants alike specifically seek out environmentally conscious rentals and savvy investors recognize this as an opportunity to satisfy a client base. Investors interested in new builds can also gain the approval of local residents by remaining cognizant of the needs of the area and keeping on-trend with green building initiatives.
A Rise in Alternative Sectors
In addition to the continued demand for office, apartment, and retail buildings, modern commercial real estate includes several types of buildings gaining popularity. An aging population has increased the demand for senior living housing. More university students plan to live off-campus in apartment-like buildings that are geared specifically toward student life. Self-storage units are also on the rise due partially to the increase in renters during the pandemic.
A Focus on Markets With the Best Opportunities
Even in a robust real estate market, some areas become hotbeds for commercial real estate activity. In 2023 the market shifted toward the Sun Belt, which is expected to continue into 2024. If you are looking for opportunities in any available market, moving your focus to properties along the Sun Belt can help you get the most out of your investment.
Embracing Commercial Real Estate Trends
Investing in commercial real estate is a huge undertaking but can be rewarding if you pay attention to trends in the market. Putting your trust in an experienced real estate firm can help keep you on the fast track to success. To learn more about the industry and what a full-service firm can offer, contact Unique Properties, Inc. for more information.
« Previous Next »