Commercial real estate has seen some of the most rapid and unprecedented changes in the past two years since the 2008 economic crisis. First, the transaction value crashed when COVID hit, and investing in commercial real estate no longer remained feasible. Then, the uncertainty made it difficult to decide which type of commercial real estate was the right choice.

However, these problems are now behind us as we enter the post-COVID era, but the challenges are far from over. The commercial real estate industry has continued to remain somewhat uncertain, especially regarding trends.

This blog will help you make sense of the current trends in the industry and provide some tips about investing in commercial real estate.

Tips for Investing in Commercial Real Estate Post-COVID

Following are the primary tips that will help you make the right investments and earn a high ROI:

1. The Overall Office Capacity will Reduce

Although businesses are returning to offices, many employees are demanding flexible working arrangements. The work-from-home helped people achieve better work-life balance and minimized their overall monthly expenses, something they couldn’t achieve previously.

Hence, there is a high chance that working arrangements will change for good and offices will not operate at full employee capacity. Of course, businesses will need to accommodate employees whose jobs cannot be performed remotely and make space for when more staff is working from the office.

However, even incorporating these aspects will not meet the capacity conditions pre-COVID.

2. People are Shifting Away from Bigger Cities

The pandemic, its resultant economic crisis, and the inability of companies to increase pay to meet inflation pushed people to leave big cities and retreat to smaller cities instead. A primary indicator of this change is the 12% reduction in office space prices.

While these numbers are alarming, experts predict that they will likely drop further as more people move away from urban areas to more affordable living. Several Texas towns have seen an inflow of new residents, so investing in commercial real estate in the state will be beneficial.

3. Retail Businesses will Rent Warehouses for E-Commerce.

The COVID-19 pandemic is responsible for the powerful push towards digitization, increasing the audience’s conversion to e-commerce. Although in-store shopping is safer now, especially with vaccinations, several shoppers have continued to rely on e-commerce for their needs.

Hence. Businesses are renting warehouses more than retail spaces because they know they need to store stock for e-commerce. You can use this insight to make the right investments and earn better ROI as an investor.

4. Be Prepared for Change

Things are still stabilizing post-COVID, and there is a high chance that several of the current trends will not persist in the future. The key is to stay observant and make relevant changes to your investment strategy to accommodate these changes.

Final Thoughts

In short, investing in commercial real estate is a bit of a gamble at the moment, but you can increase your chances of winning by playing safe. You know e-commerce is here to stay, and flexible work arrangements will be the norm. So invest accordingly, and you will get the return you want.

If you want to invest in commercial real estate in Rio Grande Valley, please contact the CHRE team. We have worked in the region for several years and can help you choose the best options and increase your return.