What does the current economic situation mean for CRE Investors?

Author Charlie Cutler Read bio
Tags: commercial real estate economy investment opportunity
Date: November 30, 2020

Everyday opportunities, ​the non-stopping challenges, and the potential to transform a real estate business seemed to be experienced by many brokers, landlords, and owners on a daily basis.

And then the Covid-19 pandemic happened and spread like fire, slamming the business. Today, prioritizing tenants’ experience and using advanced technologies to help the enhancement of everyone’s and everything’s efficiency, as well as identifying ongoing risks – drives the commercial real estate business to the growth of some yet unseen form.

The commercial real estate industry is showing the face of tomorrow, carefully selecting its new locations, planning experiences, and dedicating a good amount to analytics. 

See how the current pandemic has affected the CRE investors, and how their points of view have changed to ultimately impact the whole industry.

Investors ride on tech-enabled commercial real estate

The extensive use of technology gave birth to new-age business models, which naturally led to the creation of new competition. Changing tenant and investor expectations, CRE has been redefined, embracing the change in order to adapt for the future.

Commercial Real Estate dives deeper into the preferences of its investors, in our endeavor to help (CRE) companies understand the new rules. Global investors revealed the following key theme on an ongoing plan to increase their capital commitment, revealing the mixed-use properties as nontraditional assets and new business models.

Investors prioritizing their investments

Many CRE investors, buyers, and sellers are expected to prioritize their investments and protect the investing potential of companies responding rapidly to changes and business models adopted from a variety of technologies that are making buildings “future-ready”.

A significant impact from technology advancements on properties have happened in less than three years, and are now even more accepted as human contact has practically become a taboo. 

With CRE investors committing to invest in newer era business models and a tech-enabled ecosystem, CRE should gain more of the changing usage pattern of the built space. 

Agent and customers meeting outdoors

Becoming more agile in attracting capital

By revamping users’ experience, tenant mixture, and administration processes leases, CRE companies can reduce the risk of losing tenants, and creating a differentiating brand.

With the obvious change in investor preferences, CRE companies are rebalancing their property portfolios. This measure has put more focusing on creating memorable tenant experiences while diversifying the investor base and attracting higher capital rates. A rebalanced property portfolio of companies has the advantage to show clarity and transparency on investment strategies.

Also, in the current situation, a large portion of “traditional” real estate (except industrials), are trading their assets at discounted values.

These new arrangements seem to be beneficial to most stakeholders, adding to leading positions on the market, and leasing administration processes to offer better, short-term leases or a “hybrid” longer-term ones. 

With increased and unpredictable business ambiguity, tenants are welcoming those flexible leases, and landlords and sellers, for their part, are seeing a direct benefit on their operating income (especially by leasing vacant spaces).

Upgrading digital strategy and infrastructure

CRE Companies are somehow forced to adopt a variety of advanced technologies, even faster than other industries, and the excessive use of predictive analytics and business intelligence has been set as a standard resulting in CRE becoming a leading resource in managing modern infrastructure, relying on the power of adequately utilized data

Embracing technological innovations, form a proactive instance, develops an enterprise-like digital core of the niche. Such a robust and agile core makes CRE more dynamic, automated, and easy to integrate and connect with – valuable marker householders are in search of. 

As the Covid-19 pandemic has shuttered the majority of offices, forcing employees to work from home, at a safe social distance, the commercial real estate market came under intense need to get better and stronger than ever, upgrading their game by carefully selecting buyers and investors!