The COVID-19 crisis has affected all industries, including commercial real estate, but it also generated new opportunities like affordable renting prices, efficient online communication, and digital tours.
Trying to predict what the market has in store for commercial real estate is challenging even in pandemic-free times. The truth is that the present crisis influences all business aspects, including commercial real estate evolution. But the history shows that following struggle times, there are usually expansions in all domains, from economy to education and technology. Therefore, as the number of available vaccines is growing and we're heading towards a post-pandemic period, we expect to witness accelerated growth in all industries because the economy has to slowly recover from the pandemic's shock.
Specialists predict commercial real estate to recover from the pandemic's impact and provide new opportunities for investors and business owners, even if some asset classes are still struggling with the frozen transactions' negative consequences.
Here is what real estate experts expect to happen in 2021.
COVID-19 will leave its mark on the commercial real estate market for a long time
The end of 2020 marked a new era in the subjects the media promoted, with everyone talking about how horrible 2020 was and how 2021 will be better. But the statement may not be valid for everyone because not all industries recovered from the shock when the clock hit 12 o clock. History showed that asset sales don't show up on the radar simultaneously with the start of the recession, but it takes time for the sector to recover and adapt to the present scenario.
Commercial real estate investors can take advantage of the assistance the government provides to get back on track. However, the hit-hard businesses won't be able to recover even if they benefit from assistance. But in markets like Colombia, where the government supports businesses like casinos, entrepreneurs may find it easier to recover because investors are searching for commercial real estate they can convert into safe gambling sites. The sellers willing to drop the prices to meet the post-pandemic requirements won't have any issue attracting buyers.
Grocery stores remain stable
Grocery store-anchored shopping centres remained stable during the pandemic because people still needed food and cleaning supplies even if the pandemic prevented them from shopping as often as they used to. While some retailers filed for bankruptcy, grocery stores thrived during the lockdown, especially if they allowed people to order online and have their products delivered at home. While e-commerce will continue to expand, grocery stores will also remain stable. Therefore, it will maintain the commercial real estate industry afloat because retailers will continue to pay rent for commercial spaces and even invest in new ones to address new audiences. As we witness a population decline in the cities and a migration towards smaller towns and remote areas, retailers explore new business opportunities by opening more grocery stores in the suburbs.
Large metros like Chicago, New York, and San Francisco will continue to lose population, while areas like Utah, Nashville, North Carolina, and Austin register growth in population. Retail chains that used to open stores only in big cities explore the option of expanding their services to smaller towns.
The suburbs are welcoming the ones who're running away from the crowded town
If until now commercial real estate agents targeted mostly big and crowded cities, now they have to switch to suburban areas because we're witnesses an urban exodus. Millennials have set a new trend, they get married, purchase a house in the suburbs, work from home, and raise their children in safe neighbourhoods. And since the pandemic forced people to lock themselves in the houses, everyone is seeking a real estate opportunity in the suburbs. Owning a house allows them to spend quality time at home because they can enjoy fresh air in the safety of their yards.
Business investors and commercial real estate agents have to adapt to this change in the market and look for business opportunities in the suburbs. Some would think that industries like the gambling one that are highly productive online won't look for land-based opportunities, but the truth is that brick-and-mortar casinos will remain as popular as digital venues like colbet casino online once the governments lift the restrictions because people are eager to dive again in the atmosphere gambling sites provided. Therefore, we expect to see more businesses moving in the suburbs together with their public. And who would blame them, considering that the suburbs are offering larger spaces at more affordable rates?
The business sector will deal with the same inequality the society is facing
As it's common with all crises in history, the lowest socioeconomic classes are taking the greatest hits. Therefore, in 2021 the recovery will favour particular economic groups and industries, and luckily the commercial real estate one is one of them. Under this presumption, we expect to see businesses like casinos thriving worldwide because people will be looking for any opportunity to increase their income after they deal with the economic crisis. Therefore, the entrepreneurs who want to open casinos and offer services like ruleta, poker, and slots will benefit from this inequality because they can find commercial real estate spaces for rent at affordable rates. Also, companies like Walmart, Amazon, and Home Depot will take advantage of this scenario because they stood afloat during the pandemic and now can enjoy the opportunities the industry provides.
However, the inequality will hit the commercial real estate market because many small shop spaces will stay vacant due to the continued pressure of high rent prices. Rent collection statistics show that even during the pandemic, the prices remained to the pre-pandemic values, with only a couple of retail centres adjusting their rates to the tenants' needs.
The pandemic still has a huge effect on the commercial real estate market. However, despite the current situation, many entrepreneurs continued to invest in the market, and others are looking forward to investing in it, considering that the restrictions loosened up worldwide.