Commercial Real Estate Trends: Three Predictions for the Future

May 20th, 2014 – in market trends commercial real estate

Commercial Real Estate is not just an economic driver in the industry. It drives numerous facets of our economy. It involves where people work, live and play. Successful commercial Real Estate investment relies heavily on the trends of people in general. NBC recently interviewed Peter Linneman of Linneman Associates, one of the National Association of Realtors' 25 Most Influential People in the Business. Here are our top three among Linneman's predictions about the state of commercial real estate innovation over the next 25 years.

  1. Senior housing will be a major industry.
    The aging population will continue to grow senior-related services, increasing the demand for commercial Real Estate that supports the facilities that provide the services. Baby boomers will hit 75 in just seven more years. Senior living establishments and multi-family housing that is affordable and convenient to shopping, mass transit and employment will be in huge demand. Linneman predicts we'll see a shift in babyboomers moving back into the city, seeking dwellings that are low-maintenance, easily accessible and convenient.
  2. An international workplace will force transformation.
    Globalization has discontinued the 9 to 5 workday for many companies. They must now have staff available 24/7. This not only increases technology needs, but more companies are looking for open office complexes. Companies will be following the lead of technology firms like Google, who are already incorporating amenities like hair salons, dry cleaning shops and trendy bistros at their office sites. A fully-equipped campus will attract the talent needed to run a 24/7 global company.
  3. Suburbs won't die.
    The increase of city dwellers have some thinking living in the suburbs is a dying trend. It will be just the opposite. Instead, we'll see more mixed-use complexes coming to the suburbs, with the goal of imitating the city experience. Suburbs will become more like walkable communities, with amenities that enable dwellers to live, work and play in the same vicinity. Companies are aware of this trend as well. Gen X and Gen Y workers want to live and work in one compact area, fueling a trend that will draw more companies to set up shop outside the city center.

For agents, keeping up with long-term trends is critical to success. Where will the needed workforce live? What amenities will attract top talent and what properties can provide those amenities? Build your own custom database to keep track of all the information you need to know your market and close the sale. Tracking current and future trends will help you be effective.

Author: David Goodrich