Let’s explore what CRE’s most influential brokerages are predicting as this year’s dominating trends. Our team at RealNex has compiled 4 industry-wide movements expected by top professionals to create massive opportunities for CRE and beyond.
1. Investors Returning to Major Metros
After 2018’s explosive widespread interest in smaller markets, U.S. investors are refocusing on popular metro areas. According to JLL, this pull-back is due to the stability and safety found in the already-established cities.
According to JLL’s Chief Economist, the U.S. economy is facing a likely slowdown in 2019. GDP growth is expected to slow from 2018’s 2.9%, meaning that low-risk deals act as investors’ best bet.
JLL’s data also predicts that CRE investment in the U.S. is set to decrease by 10 percent this year. Investors are combatting this slowdown by adopting a defensive strategy. By redirecting investments back into major metros such as New York, Los Angeles, and Chicago, they are adopting a defensive strategy that will remain successful during 2019’s economic forecast.
2. Widespread Micro-Retailing Surge
As tech adaptations offer customers instant gratification, retail is facing pressures from every direction. Kidder Mathews released their 2019 Retail Survival Guide, providing expert insight into the future of retail.
According to their studies, one of the biggest things to be hitting the market will be micro-retailing. Going beyond pop-ups, micro-retailing is a concept focused around creating a space to test out new products in an interactive and experiential retail venue.
These spaces fall between 20 and 200 sq. ft., and encourage customers to try, touch, and sample a brand’s newest releases. According to their studies, this segment of the retail sector typically involves shorter leases, shared space, short-term stores, and maker tenants. These experimental outlets are already functioning in New York, Atlanta, and San Jose.
3. CRE Sustainability Insights
Widespread environmental concerns are giving rise to increased awareness surrounding all things sustainable. Coldwell Banker explored how environmental efforts will be shaping CRE during 2019. According to their research, environmental awareness is causing investors and companies to pay more attention to sustainability standards as make-it or break-it aspects of a deal.
Coldwell Banker declares that all things eco-friendly serve as major selling points in our contemporary marketplace. Whether it’s a building that uses recyclable materials, offers green-focused amenities, or was built with efforts to lessen environmental impacts - all these details create a powerful advertising point for the modern eco-friendly market.
CRE agents should focus their efforts to accurately collect and share data on sustainability while marketing their properties.
4. Co-working Attracts Medical Professionals
The trend of coworking is slowly infiltrating the medical field. According to NAI Global, the appeals offered by flexible workspaces are transcending the typical office and reaching into medical buildings.
The system comes with perks that allow medical professionals to hold an independent practice without the stresses of covering massive up-front costs. The experts at NAI Global are expecting coworking to begin seeping into medical sectors during 2019 and beyond.
Keep a lookout for these hot trends hitting CRE’s global market throughout 2019. What changes in CRE are you looking out for?