The world is always changing as trends come and go, people change, technologies evolve, and markets adapt. Commercial real estate is no different. Although the industry has more inertia than most, we have seen how remarkably different it has become over the years as commercial real estate brokers.

Commercial real estate takes more time to adapt because of the sheer number of parties, policies, SOPs, and systems involved in the process. A different approach often means overhauling processes and losing familiarity, something most people are reluctant about due to the money involved.

However, the industry has evolved to a great extent, and this blog will address the way things have changed.

How Commercial Real Estate has Evolved

While commercial real estate’s industrial dynamics have evolved in far more ways, the factors mentioned below have led to the most significant changes.

1. Changes in Demographics

The past decade has changed workplaces extensively, with baby boomers retiring and millennials making up a significant percentage of the total workforce. The shift in workforce demographics is impacting commercial real estate because millennials have brought more well-being and socially conscious practices.

Hence, their generational differences are changing the outlook and facilities within offices, increasing the need for sustainable and inclusive infrastructure.

2. Occupancy and Rental Rates

The economy has been improving, leading to a significant increase in businesses or business expansions. These factors have directly affected occupancy and rental rates, both increasing to accommodate the higher demand.

The occupied space at the end of 2019Q4 was nearly 9 billion square feet, a notable increase of 2 billion sq. ft. from 7 billion in 2010.

3. E-Commerce Orientation

Technology has evolved significantly over the past few years, changing the base dynamics of several industries. One of the key changes has been the introduction of e-commerce and the need for greater industrial and warehouse storage.

Commercial real estate has also changed, with more product-based companies incorporating e-commerce in their business framework to meet demands. Older buildings with lower ceilings are becoming obsolete with the change in business needs.

4. Introduction of Biotech

The focus on sustainability and research needs has led to an increase in biotech startups needing specialized laboratories to run experiments and conduct clinical trials. Hence, this need has evolved, with a portion of commercial real estate investment focused on profiting from this emerging niche.

5. Changes in Office Market Trends

Innovation in communication has revolutionized business, increasing the focus on efficiency and optimization. Hence, businesses have become increasingly focused on using office spaces that improve work efficiency and flexibility.

The pandemic has also created another shift and led organizations to consider hybrid frameworks that incorporate work-from-home arrangements.

Final Thoughts

In short, the commercial real estate evolution is a result of technological progress, changing workplace demographics, and innovations. These factors and the general improvement in occupancies have created several opportunities in this industry that will likely change its future course.

If you are interested in investing in commercial real estate in Rio Grande Valley, please get in touch with the CHRE team. We will be happy to help you find the best investment for you.