Keeping abreast of current trends in commercial real estate can help your company make the right decisions when it comes to choosing an office for rent, land for sale or cooling your jets and staying put for the time being.
This year, the market seems to be more or less on an even keel, which is great news compared to trends from years past, but there are still some really interesting developments you should be aware of since they may impact your business in the future.
Here are three to keep a close eye on:
- Rising Interest Rates. The Federal Reserve officially raised interest rates in December 2015, but there were many in real estate circles who didn’t think that rise would become a permanent trend. They were wrong, and the double-edged sword of creeping interest rates has been thrust upon us ever since.Even though those rates are rising slowly, your customers are acutely aware of the situation and are going to be even more careful with their money as credit becomes more costly. Commercial rents and mortgages will also cost more, so if you’re considering a move, keep this in mind. On the flip side, increasing interest rates generally mean the economy is moving in the right direction.
- Global Urbanization. The 1920 Census was the first time that more Americans were shown to be living in the city than on farms, but it wasn’t long before city life overwhelmed them. The 1950s Census marked the rise of the suburbs, as Americans had emptied their cities to relocate to a place a bit less noisy.Today, walkable living and working spaces are back in style, with Americans moving back to the cities and converting suburbia into more urban-like spaces. Positioning yourself in a walkable space could be a huge boon for your business, especially if your area is just now hopping on board with this growing trend of urbanizing everything.
- Lower Energy Costs. As the cost of buying commercial real estate and leasing office space increases because of rising interest rates, it’s nice to know that energy costs are dropping to help offset the cost of running a business just a little. Last year’s dramatic drop in oil prices (from $110 to $50 a barrel) and a continued reduction in demand mean that energy prices will remain stable or possibly drop slightly further, but either way the long term decrease in cost has already begun to increase consumer confidence. That’s always a boon to business since consumers tend to spend when there’s extra money in their budgets.
Commercial real estate trends are always on the move, but staying informed can put your business at an advantage in today’s ultra competitive environment. Knowing where trends are headed gives you a chance to position yourself to take advantage of the newest wave of customer buying power or economic savings that are bound to follow.
