The real estate industry will always be characterized by ups and downs. Prices fluctuate, trends change, and areas become more or less desirable for commercial operations. In saying that, COVID-19 has presented an entirely new set of challenges that commercial property owners must face. Knowing what those challenges are can put you in a position to solve them. With that in mind, let’s take a look at the top 5 challenges faced by commercial property owners post-pandemic
Building Layouts
Office layout trends have changed over the years for many reasons. However, in the wake of the COVID-19 pandemic, commercial real estate agents are discovering that prospective purchasers and tenants are looking for a layout that allows for a safer and healthier environment.
Often, this looks like separate offices, generous entrances, and spacious communal areas to allow for social distancing. Defined worker spaces will take over from the hot desks that were popular pre-pandemic. Commercial property owners planning on selling may end up having a layout that, while once desirable, now no longer is.
Technology Upgrades
COVID-19 has taught us a lot about what our current technology is capable of. We have been able to work from home, talk to customers worldwide without traveling, and hold virtual office meetings. Once workers slowly make their way back to their central places of business, they may expect their buildings to be capable of managing all this tech. However, not all of them will be.
Real estate agents and commercial property investors may need to look at ways to bring their buildings into the 21st century. This may involve updating internet connections and improving WiFi strength to make their property more desirable to prospective tenants and purchasers.
Change in Demand
Since the beginning of the pandemic, nearly 100,000 businesses in the United States have closed their doors. There is now a change in demand for commercial property, especially with all the uncertainty around lockdowns and job losses.
For some time, commercial property owners may notice a difference in the number of inquiries they receive on properties for sale and lease. Some may also see that vacant properties are sitting on the market for longer, as well.
Experts expect the recovery to come in three phases – today, tomorrow, and the future. Some industries may be more affected than others.
Adapting to Post-COVID Requests
Many real estate agents and commercial property investors expect to be able to rent, lease, and sell commercial properties at pre-COVID levels in the near future. However, many are also expecting to need to add wellness features.
Ten key areas were identified in a rating system for certification: air, water, light, nourishment, movement, sound, comfort, materials, mind, and community. Some of these combat health risks, while others contribute to the occupants’ mental health.
Price Drops
It’s a basic rule of economics that demand affects price. When the bottom falls out of demand, the bottom falls out of the price.
Experts are well aware that the commercial property sector will recover – most likely at a rapid rate. However, investors may need to revisit lease rates and even the price tag they have on buildings for sale if they expect to sell or lease quickly.
Some industries are going to be more affected than others in the wake of COVID-19. However, downturns can’t last forever. By being aware of the most common challenges, you can be prepared for when or if they happen to you. One thing that will not change is the fact that many fortunes have been made from land. Pandemic or no pandemic, real estate is a desirable asset to have.