The coronavirus pandemic has had a negative impact on the economy overall. The real estate industry, namely the commercial real estate sector, has had both positive and negative impacts thanks to COVID-19. Let’s take a look at several types of commercial real estate and how they are transforming to stay profitable during these tough economic times.
Industrial Commercial Real Estate
With social distancing and quarantining the new normal, the industrial commercial real estate sector is booming. Online shopping and the demand for large-scale distribution centers have skyrocketed. As such, many retailers and distributors have learned the hard way that last-mile distribution (the “out-for-delivery” part of package tracking) is a must.
That said, companies that hope to remain profitable throughout the pandemic and beyond are investing in the much-needed and expected last-mile distribution tracking. They’re also building more distribution centers to address the heightened demand and expectations of their consumers.
Multi-Family Commercial Real Estate
While the multi-family commercial real estate market is virtually recession-proof (there’s always a demand for housing), landlords are feeling the squeeze of recession as state and local governments have placed restrictions on evicting non-paying tenants during the pandemic.
Whether you’re the landlord of a single-family dwelling or you own several multi-family buildings, it’s more important than ever to understand the economic and employment factors being faced by the renters of your property. The good news is that because many people are now working from home and continuing to earn a paycheck, most tenants are still able to pay their rent each month.
Office Commercial Real Estate
Many companies have transitioned to work-from-home platforms to keep the coronavirus from spreading. This switch to home-based working has resulted in huge savings for many employers. In fact, it’s likely that, even after the pandemic is over, many employers will allow their workers to continue working from home, at least part-time.
It’s too early to predict what the office of 2021 will look like, but one can guess that if people return to the workplace in a full-time capacity, social distancing and personal space will be enforced, causing an increased demand for office space.
Retail Commercial Real Estate
The retail industry has been hit hard during the pandemic, with small businesses suffering most. Big-box retailers have seen record sales during this time. Having said that, any retailer hoping to survive the crisis will need to make some changes.
Before the pandemic, there was an obvious online trend happening in the retail sector. More and more people were embracing app grocery shopping with curbside pickup and Amazon convenience. COVID-19 only hastened the trend, which means big or small, retailers of all kinds will need to get on board or risk failure.
Furthermore, consumers demand automated processes when shopping online. Dealing with a live person when not necessary only serves to waste time and money. Digitizing as many processes as possible will cut out the middleman, saving retailers and consumers alike.
The coronavirus pandemic has turned the planet on its proverbial ear. No one knows if or when things will return to normal. What we do know is that some sectors of the commercial real estate industry continue to thrive while others are struggling to stay afloat during these tough times. For those hoping to remain profitable and those who need a little help, embracing the ideas listed above is a must.