The commercial real estate industry is no stranger to cultural trends with these assets being fixtures of communities. However, the new trends, largely based on generational differences, do present some unique and often challenging conditions for those in commercial real estate. As diversity reigns, so do many diverse choices regarding how people choose to live, work and even shop. We dip our toes into this topic with a look at socio-cultural trends currently affecting commercial real estate.
The Generational Impacts on Commercial Real Estate
An easy want for a new family is to invest in a home that is near everything a young family might want or need. Nearby shopping? Check. Nearby parks and recreational areas? Absolutely. Let’s not forget nearby schools, churches and other possible neighborhood amenities.
However, the issue is that the younger generations, namely Millennials, have put those pursuits on pause. Marriage, parenthood and home ownership are not hot on their radar. For the moment, the younger generation is more likely to rent and they also prefer a wider range of workplace options.
This creates unexpected variables in the commercial real estate business. While older generations have literally built up a lifetime of habits that surround ownership and real-life work and shopping experiences, those now coming up are growing accustomed to remote applications that allow for distant shopping and work environments. This brings us to…
The Technological Impact on Commercial Leasing
Online retailers present the convenience of buying power without having to ever leave one’s home. While this is a modern-day marvel of sorts, it has affected the world of commercial real estate. Retail shrinkage is a negative trend that has caused some businesses to shutter their brick-and-mortar operations and either close permanently or shift to an online platform.
What does this mean for those with skin in the commercial real estate game? It has caused issues but for the more creative in the business, it also presents opportunity. Some might think that a mall is a mall is a mall and that an abandoned mall is even less of a mall. However, abandoned retail spaces are simply a new puzzle to solve and every puzzle has a solution.
Repurpose Those Retail Spaces
One solution for this new trend is to repurpose or repackage those once popular office and retail spaces. In a notable instance an abandoned mall was purchased and transformed into a local church, complete with its own retail spaces. Another similar instance and in that same city, an abandoned family amusement park was also taken over by a church which made an impressive use of the decades-old carousel that remained on the property.
Of course, not everything needs to be converted into a church, but these are a few examples of how socio-cultural trends are helping to transform the commercial real estate market.
As for changes now and in the future, Star Trek fans might even offer up the familiar quote “Resistance is futile.” A more familiar and agreeable axiom is “Roll with the punches.” When it comes to reviving a commercial space or property, think outside that proverbial box. Success in the commercial real estate world is all about understanding generational lifestyles and meeting those wants and needs with innovative applications and designs. It’s also about tenant relations and juggling the complex world of lease management. For this, commercial real estate software can prove to be your ally. Schedule a free, no-obligation demo today.
