Today’s Commercial Real Estate Trends
Moving further into 2023, we see the commercial real estate landscape continuing to evolve rapidly. Changing demographics, technological advancements, and shifting work habits make this an exciting and challenging time from the perspective of construction firms and real estate agencies. In this blog post, we look at the top trends in commercial real estate for 2023 and try to predict what’s on the horizon.
Accelerated Prop-tech Adoption
Property technology (prop-tech) refers to the technology and software used to streamline, optimize, and enhance various real estate sectors. The point of prop-tech is to fuse technologies like machine learning, the Internet of Things (IoT), and virtual reality to transform how properties are managed, marketed, and maintained. Some examples of prop-tech impact on commercial real estate trends in 2023 are:
According to the World Economic Forum, buildings account for more than 60% of carbon emissions in cities. Because of this, there is pressure for investors and owners to think about sustainability and seek green options when possible and through sustainable architecture. Sustainable architecture attempts to limit the negative environmental impacts of construction by using recycled and recyclable materials or materials that are more environmentally friendly than what’s been used in the past.
Enhanced Property Management
Advanced software solutions and IoT devices can help property managers monitor and control various aspects of their buildings, including energy consumption, maintenance, and security. Using specialized software and devices can help them dramatically reduce costs and increase efficiency.
Data Driven Decision Making
The key to making the best decisions is having enough data. Today, AI and machine learning algorithms can analyze massive amounts of data in seconds, giving investors, contractors, and developers up-to-date information to help them make better, more informed decisions for acquiring property or deciding to build. Moreover, as AI gets more intelligent, it can recognize trends in the data more quickly, which means the people using the technology can plan and react more quickly too.
Improved Tenant Experience
Finally, prop-tech can create smarter connected buildings providing tenants with better security and mobile access control for locks, climate controls, and facility updates.
The pandemic changed many people’s attitudes towards office work and work in general and significantly changed the commercial real estate landscape, maybe for good. According to the U.S. Bureau of Labor Statistics, 43% of full-time employees worked from home in 2020. While those numbers have come down slightly, remote work is the norm for many companies, impacting the commercial real estate industry with lower demand for commercial space. This is where flexible workspaces come in. Because of the shift in remote work and people’s attitudes towards working in the office, there’s increased interest in flexible and co-op workspaces as businesses seek to mitigate their vacant buildings while accommodating their workers. Flexible work spaces offer short-term leases and scalable options, which help the company’s bottom line, and provide networking opportunities and a sense of community for people who remain remote.
Specialized Real Estate
Because of the changing dynamics of the commercial real estate market caused by more workers working remotely, developers, investors, and contractors are turning to real estate that’s developed for specialized purposes like data centers, industrial parks, medical facilities, and especially warehousing and distribution to meet the growing demand for people who shop online.
Finally, although many people are choosing to work remotely, there’s still a significant number of workers flocking to the cities to find jobs, so the demand for residential and commercial space will increase in these areas. Many people want the convenience of walkability, public transportation, and the amenities that come with living in an urban environment, so there will be a push to develop mixed-use spaces in larger cities.
Whether you need a general contractor or construction services for your next real estate project, you can count on our experience. We worked extensively in the hospitality, education, entertainment, and retail sectors and on public and private projects. Call New Horizon Construction Services today at 407-574-2164 to discuss your next project.