Trends Affecting Commercial Real Estate Today


The commercial real estate market in 2018 is vastly different than, say, ten years ago. Things like shared working spaces are emerging, which was not really in existence ten years ago. Trends affecting commercial real estate are important to know for those who are both buying and selling real estate in today’s market.

1. People Drawn to the United States to Invest

While their continues to be economical and political instability across the globe, the United States’ real estate market is the most stable and the most transparent, which is drawing people from around the world to invest. Therefore, Americans will be competing with foreign investors for the viable commercial real estate in all areas.

Places like Los Angeles and New York continue to remain at the top of the investing charts.  With that being said, London is a top investment destination, despite the strength of the United States, and Hong Kong and Singapore are strong, along with places like Berlin.

2. Real Estate Investment Trust or REIT Will Play a Role

Real estate investment trust or REIT owns various types of commercial real estate, including shopping centers, hotels, apartment buildings, hospitals, etc. The current trend is that they are becoming lasered focused. Publicly traded REITs are beginning to partner with top developers.  Activity is growing among nontraded REITs as well.

3. Multifamily Housing is on the Rise

The housing market is really shown changes over the last ten years. In particular, multifamily housing will continue to expand. Multifamily housing is the buildings that house many different kinds of families. There are many avenues in which to search for apartments for sale online such as

Typically, these would be apartment buildings. The multifamily housing of today includes not only the living spaces but things like grocery stores, nail salons, exercise gyms, and other amenities. The Millennial and boomer generations will play a role in both student and senior multifamily housing scenarios.

4. Urban Areas Will Continue to Evolve

The traditional way to raise a family and reside is to move to the suburbs out of the city. However, urban areas are evolving into areas that offer not only luxury living and work possibilities but also retail stores, entertainment spaces and parks, and playgrounds. Suburban developers are noticing this trend and will try to make the areas as vibrant as the urban areas to continue to attract people to the suburbs.

5. A Decline in Retail Bankruptcies


There have been retail bankruptcies on the rise. However, now they are expected to be on the decline. Losses for department stores will begin to level off, and the number of major department stores closing will be on the decline. In addition, large discounters, such as Walmart, will show improvement as growth investments pay off.   

6.  Office Real Estate Growth will Slow

The office real estate growth will slow. Older buildings that lack the amenities of newer buildings will struggle. The days of the traditional office building that is nothing more than offices, a cafeteria and bathrooms are on a rapid decline. Buildings that offer a wide range of amenities will manage to move ahead at a satisfactory pace.  

7. Industrial Real Estate will Continue to Rise

The industrial real estate market is making huge strides especially with warehouse and distribution centers close to urban areas. Rents are still at a reasonable cost but will climb as things continue to take off.

8.  Senior Housing on the Rise

Although the traditional aspects of senior housing, assisted living, independent living, nursing care are not yet being taken advantage of fully, the senior housing market will eventually rise due to aging baby boomers.

9. Investors Disciplined in Strategies

Investors are interested in real estate, but they are taking a disciplined approach to investment strategies. Therefore, large-scale risks will be on the lower end as investors seek a measured approach.

The rise of flexible working space is being seen. This is a situation where companies share workspace with other companies. More and more companies are interested in working circumstances that give them more flexibility, an opportunity to save on costs, and that opens the door for co-working situations and networking. It is estimated that by 2030, 30 percent of all working spaces will be in a flexible model.

These are just some of the trends affecting commercial real estate. Every year, some trends remain while others are replaced with emerging trends.

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