The global Covid-19 pandemic has had a pronounced effect on almost every industry. From subtle shifts like working from home to an entire shutdown of other sectors. This has resulted in a massive change in the way we work, the way we think about workspaces, and how commercial real estate will be utilized.
Prior to 2020, office employment accounted for 51.4% of positions. The 5-year projected outlook was an increase of 8.4%. In terms of commercial space, this was a good indicator that the demand would steadily increase.
Now that many people have transitioned to working from home, some companies have viewed the home as a viable and effective office space. This has changed the mindset of how we think office buildings should be utilized, as there now needs to be more space within the home to carry out work.
Here at Catalyst, our Wayford brand continues to develop build-to-rent townhomes which are giving residents additional space in order to set up home office areas. Our team is also putting co-working opportunities in our clubhouses so residents are able to have a place to work outside of their own home.
What Are the Current Post-Pandemic Trends?
For many years there was an idea that we need to cram the most amount of things into the least amount of space. Offices are outfitted with cubicles, restaurants being opened in the sides of buildings, the list goes on.
However, some of those restaurants are now empty, offices are less populated, and eCommerce is chipping away at brick and mortar retail areas. Even as we are entering post-pandemic life the same trends are still occurring:
– People are working from home
– Offices introducing hotel stations to increase space between people
– Restaurants have fewer seats
– Online eCommerce continues to grow
Some of these trends appear to be here to stay.
How Does Commercial Real Estate Adapt?
The idea of commercial real estate is being reinvented. Office spaces are being reconstructed to allow for more room between employees, some include no more fixed desks, but mobile workstations are installed instead. More companies are embracing the flexibility of partially working from home in part because it reduces stress on their employees. However, this also means there is more workspace required inside the home.
As people have become more aware of shared spaces and how closely they interact with each other, commercial developments will need to change their space allocations. This induces restaurants, bars, and hotels.
There are pockets of significant growth across the Southeastern U.S. including Atlanta and Raleigh who have estimated an additional 4.5-5% increase to their job pools. The increase in jobs will inevitably increase the draw to these cities. Therefore the need for affordable housing solutions is also growing. The idea of retrofitting commercial buildings into multi-use properties is beginning to catch on, with an emphasis on workspaces within the home.
As retail continues to move online there is a huge challenge of getting products into the hands of consumers. Online sales have increased almost 5% in the past year, the largest year-over-year increase ever seen. Therefore, distribution centers will continue to grow in demand. New-build real estate in the southeast U.S. could benefit from taking advantage of this trend.
Our Commitment to Development
Commercial real estate development will continue to grow, however, the old concept will need to change to fit our new world. At Capital Catalyst Partners we are actively investing in the southeastern U.S. Our goal is to develop robust residential and commercial properties that will continue to bolster our economy, create opportunities, and improve our communities.