Infrastructure. It’s a vague term to most of the populous and it’s not exactly what many commercial real estate professionals think it is. There are differences between infrastructure and commercial real estate, but the former definitely has the potential to impact the latter.
With President Biden’s wide-ranging $2 trillion infrastructure proposals still being processed and finalized, it begs the question: how will this affect commercial real estate, if at all? Let’s take a look at the differences between infrastructure and CRE, the potential effect of the bill on the industry and how to stay on top of trends and changes.
Infrastructure vs. Commercial Real Estate
First, a rehash of the basic differences between “infrastructure” and the properties or buildings that comprise a commercial real estate professional’s portfolio. In general, infrastructure assets are projects, buildings and structures that directly benefit the general public. (Think highways, airports, public transportation, bridges, etc.)
Commercial real estate, on the other hand, is a property or structure that is used for business purposes and is usually inhabited by a business (whether open to the public or not). There are few overlaps between infrastructure and CRE, but they are related.
Potential Impact of the Infrastructure Bill
CRE pros may not directly own infrastructure in their portfolio, but it definitely has an impact. Infrastructure is like a river and CRE properties are like a farming village that depends on it for survival. If the river runs dry (or is diverted in another direction), the village will either suffer or be forced to relocate.
CRE properties are the same way. Pay attention to how this bill moves and what particular changes will take place in your area. Take into account how proximity to new highways, schools, hospitals and other public services will impact your current and potential CRE targets.
How To Stay On Top of Industry Changes
There will be an impact if/once the bill provisions are finalized, but whether it’s negative or positive is up to you and your ability to measure and adapt to the market. If you have CRE software like Quarem at your disposal, you can see actionable information such as market rate fluctuations, occupancy rates and interest changes for the criteria of properties you’re targeting. If you can adapt and forecast with a tool like Quarem, you can stay on top of industry changes and turn them into a profit instead of a loss for your business.
If you’re interested in seeing how Quarem can help you address industry changes and trends, request a demo today.