Throughout 2020, some of the biggest US cities looked like ghost towns, with shuttered doors and windows. There was an eerie silence without the usual throngs of pedestrians. So what does this mean for commercial real estate in 2021?
Fortunately, experts are predicting that despite the previous year’s economic hardship and social distancing, commercial real estate won’t meet a tragic end. It’s expected to make a recovery — although it will be on a slow timeline, probably not until at least late 2021 or 2022. In fact, it’ll also shape some new trends to come and change the way we use certain spaces. Here’s what to expect for the future of commercial real estate in a post-COVID-19 world.
Retail: A Slow Start and a Switch to Hybrid Solutions
While many of us have enjoyed the benefits of working from home — saying goodbye to long commutes and getting to work in our pajamas — plenty of us, especially the younger generations, still crave the lively atmosphere of a buzzing coffee shop or store. Luckily, despite the post-apocalyptic look of malls and shopping centers over the past year, we won’t be limited to Amazon orders for the rest of our lives. And while certain retail sectors are struggling — namely, shopping malls — experts see retail in general bouncing back, albeit after a long and slow recovery period.
The difference will be a shift toward hybrid models, such as retail spaces merging with medical retail and service providers. Expert commercial builders predict that this trend will drive convenience for consumers and patients, since retail developments afford substantial parking, high visibility, and — especially important in a post-pandemic world — one-stop convenience.
A Permanent Shift to Telecommuting? Not Necessarily
Now that many of us have been working from our couches or dining tables for the past year, we’ve grown used to the convenience and ease of telecommuting. And business owners who cancelled their leases have slashed business overhead. But many experts believe that the majority of companies won’t be so quick to give up their offices — they’ll simply use the space differently.
Some may realize that they don’t need space for 100% of their employees and may incorporate shifts, staggered start times, and continued remote working for a percentage of staff. Meanwhile, companies that can afford to may simply choose to expand their space for safer working conditions. In fact, demand for high-quality office space may even increase as individuals crave relief from the psychological effects of pandemic isolation.
A Focus on Hygiene and Wellness
The long-term outlook seems to be that, incorporating a new collective awareness of contagion factors, office spaces of the future will be designed more like hospitals. But this doesn’t mean a sterile or uninspiring atmosphere — far from it, in fact. It simply refers to principles of safety and cleanliness.
For example, materials that can withstand heavy amounts of cleaning and disinfecting, like glass, metal, and varnished wood, will be used rather than porous woods and natural stone surfaces. This guiding principle may extend to a focus on air filtration systems that use ultraviolet light and even office layouts adjusted to eliminate circuitous routes in favor of shorter and more direct paths.
All in all, this may give rise to a “contactless office,” which could rely on smartphone technology and voice activation to trigger actions such as clocking in, opening doors, adjusting lights or temperature, and brewing coffee.
Tourism Will Vary by Location
Commercial markets that rely on tourism, such as Las Vegas, NYC, or Honolulu, will take the hardest hit of all. That’s because travel bans continue to fluctuate, with many people not feeling safe enough to fly until after vaccinations are widespread. In fact, nearly a billion hotel rooms went unsold last year, making hotels another sector that faces a long journey back to normal. However, recovery will likely be much quicker for smaller cities and those where the economy isn’t driven by consumer demand.
Although the pandemic created a huge shift in the way we do our work—and where—it was a reminder that, in the commercial building sector, evolving technology is a change we must always be prepared for—but it’s not the only one.