There are different types of properties that are covered by the real estate industry. These include office, hotel, multifamily, medical, life sciences, industrial, and retail. The real estate industry is one industry that is always evolving and never really at a spot. This is partly due to technology being integrated continuously in this industry and covering different levels and parts of the industry, including the different types of properties. It is already over ten years since the expansion cycle began slowly and steadily, but to date, there is still cautious optimism, and the real estate market is still sturdy.
There have been challenges with investors that have resulted from factors such as generational changes, an increase in product types’ specialization, and continuous evolution of the occupier demands. So, we look into what we expect to be the most likely trends to shape the real estate industry in the year 2021. Here’s what the authors at thesis writing service from Assignment Masters, have to say:There will be an increase in specialized real estate demand, and the momentum of the life science industry will be the driving force behind it
It is not possible to doubt the fact that the life science industry has been growing at a significant rate in the last few years. This growth and the momentum that it generates will drive the need for highly specialized spaces to facilitate development and research, and production as well. Investors now consider alternative assets like a life science property to diversify their portfolio and gain more yields than the industrial acquisitions and traditional offices have to offer.
The industrial shape is reshaped by technology
There are already new companies catering to and trying to improve the supply chain. But what this will do is bring about change in the acquisition of industrial space by other companies. As they continue to grow, they are also starting to develop new markets. With the expansion of these companies and their continuous struggle to revolutionize the industrial shape, there will likely be an increase in the demand for industrial spaces of class A in the real estate market across the US.
Real estate work from home possibility
According the reports and reviews of the consultants from Assignment Masters, now, many real estate offices are closed or functioning embracing remote work. And despite the Coronavirus influence, a lot of real estate marketers realized that they can work from home to avoid communications from the office. And this was the real insight and great influence on the market, really a good decision. The costs are lower and meanwhile the productivity of the remote work is increasing. Also, the possibility to recruit the talents from around the world at competitive salaries gives more possibilities when it goes about the really expensive markets. Also, from online rent collection and buying and selling apps you can control from anywhere, the process that drives real estate work.
It is obvious that these changes won’t vanish when the pandemic lockdowns will come to an end. These new beginnings will adapt further to obtain more profits and the better investment opportunities for the market players.
New concepts and brands of the hotel are emerging from the competitive market
There has been a massive growth in the hospitality industry as business. This has consequently led to an increase in leisure travel, putting upward pressure on the occupancy rates. This stiff competition has led to a new brand and concept being designed to appeal to different types of travelers. We expect that hotel property owners and operators have to be flexible from now, and it is important that they are not out of touch with what their customers want so that they can adapt quickly to the ever-changing demands.
Multifamily and office development are becoming more intertwined
Over time, we have seen a symbiotic relationship evolve between the multifamily and office types of assets, and this has made both parties semi-dependent on one another. Multifamily is a top performer nationally in this space. And in cities that have an urban core is established and nurtured, it is more likely in 2021 that we see new office spaces being set up in order to cater to different firms that might be willing to leverage on the available workforce and increase their presence within the city.
Office design creativity is improving thanks to the technology sector
More technology firms target millennials, and they do this by planting their firms in central business districts while avoiding the traditional office towers for a highly amenitized and more collaborative space. The high growth mode of these firms dictates their need for scalability and flexible lease terms. The built environment, talking about the curated space and carefully selected locations, are now the most potent tool used by the companies for recruitment and retention.
Rise of construction costs means that tenant improvements allowances will increase
In the last few years, a combination of different factors such as restrictive trade policy and a lack of qualified, skilled labor has led to a dramatic increase in the cost of constructing new properties in real estate. Although robust new constructions and the fundamentals of demand and supply in many major markets have played key roles in the tenant improvement allowances, the rapid increase in the allowances that have been experienced in the past years is very much related to the continuous increase in construction costs.
Increase in cold storage demand will increase due to the growth of beverage and food eCommerce
With online grocery stores and eCommerce generally continuing to grow, food distributors and retailers will require larger distribution hubs. These hubs will also be required to have cold storage functionality, as this will help them their capabilities for last-mile delivery for their customers. Big fulfillment centers are already on the rise and are breaking grounds as developers are in search of available land and warehouse facilities that have proximity to interstate highways and ports, especially in the gateway markets.
Baby boomers are increasing the multifamily unit demands
As they start to enter their retirement, several baby boomers now prefer to rent houses in urban areas. So, we are likely to see an increase in baby boomers’ multifamily even into the coming years. This is because this demographic group is one of the fastest-growing in the US. Studies also suggest that their numbers will only continue to rise and might double towards the middle of this century. The baby boomers are a good demographic group for asset owners to target for rent. They also are less of a rent burden than other groups of the tenant as they have had the time to build their wealth.
Medical retail continues to grow very fast
We now see medical service providers expand quickly into retail spaces such as urban storefronts, shopping centers, and malls. According to authors at best thesis writing services, the main driving force behind this trend is the creation of a comfortable experience for their patients as retail developments are located more centrally and close to residential populations, and offer more visibility and ample parking.
An increase in decline of the traditional small office lease due to a rise in coworking
Coworking is becoming more popular over the years, which doesn’t sound suitable for small office leases. There’s a rapid decrease in the total number of transactions involving spaces that are less than 10,000 sq. feet in the direct office market. Although a decline in the volume of smaller deals is an issue that traditional asset owners have to deal with, it might have gotten to an inflection point due to the slow growth of the sector for flexible office space and coworking. A repercussion that might result from this slow activity is a rine of the direct-to-owner lease market
There’s a lot to be said of the real estate business in 2021, including things to and not to look forward to. But here are some of the trends that are shaping real estate in 2021.