The impact of COVID-19 has been felt by every industry, with lay-offs and work disruption taking place nationwide. Commercial real estate is also experiencing a transition. With more people working from home and shopping online into the foreseeable future, real estate will experience some shifts.
As always, our team at WW Reynolds is carefully watching these changes, making adjustments, and finding new opportunities for our clients.
While much remains unknown, we anticipate some of the following shifts in real estate during and after COVD-19.
Higher demand for industrial space
By 2023, industrial real estate demand is expected to increase by at least 850 million SF, and according to Deloitte, the rise in e-commerce sales is to blame. E-commerce has grown by 14.8% in a 5 year period between 2012-2017 according to the same study. And, with large volumes of space being fairly limited, it’ll only become more difficult to secure a lease on industrial space. This trend can easily be exacerbated by consumers nationwide increasing home deliveries due to COVID. Many businesses can now only operate from afar, and the powerful ability to ship items quickly relies on industrial space capacity.
That said, Boulder does have some large scale flex space coming on the market this year. Check out the fully renovated Sterling campus.
The office of the future
Despite the dramatic increase in remote working and working from home (both due to COVID and changing trends in recent years), there is still value in company offices. We don’t believe the company office is going away, but will serve different functions. Instead of office buildings that serve as hubs in city centers, there may be a rise in smaller, satellite offices. This would be for a few reasons. First, public transit will be operating at a reduced capacity, making commuting not only risky, but inconvenient, and second, smaller satellite offices will make adhering to social distancing easier. For the foreseeable future, offices will most likely be outfitted with physical workspace barriers and signage that encourage 6 ft. social distancing.
Several of our listings are uniquely set up to accommodate safe office working, both now and into the future. The 10,098 SF building at 1720 14th Street in downtown Boulder for sale and for lease offers ten big separate offices, each of which can be subdivided into two offices. Considering how open office space has been in high demand in recent years, 1720 14th Street offers an especially rare opportunity.
Real estate transactions
Boulder County has released guidelines for the Safer-at-Home COVID phase which now make activities related to real estate transactions, like open houses and showings, easier to conduct. However, many across the industry are encouraged to limit viewings where possible and leverage digital materials before a viewing is scheduled. This makes digital and online marketing more important than ever.
Overall, it’s important to remember that commercial real estate is going through change. WW Reynolds has been around for many economic downturns and cycles of change over the years and it will be no different this time.