It certainly hasn’t been predictable but real estate’s journey through the pandemic has been nothing short of an underdog success story. As we near the end of Q4, let’s take stock and set up a few predictions for the future of CRE in 2022.
No industry has proved a greater chameleon than CRE over the last few years – and it’s an industry many thought would tank under the pressure of quarantine, increase in work-from-home, and income instability among consumers. But it didn’t. In fact, this industry – previously attributed as one of the slowest to embrace tech solutions for its operation – has sky-rocketed to the top of the list in terms of staying power.
Looking forward, we can already see that this ability to adapt will continue to evolve as more CRE companies embrace tech solutions, expand their networks, and integrate into special opportunity markets.
The bullish housing demand alone would have been enough to sustain the real estate market as a whole and projections for 2022 are positive even though the housing market demands are expected to settle. The Economic and Commercial Real Estate Outlook 2021–2022 report from the National Association of Realtors shows an increase in the number of workers leaving the 100% remote work lifestyle and returning to the office, leading to a partial restoration of commercial work and retail space demand. Though office vacancies will not disappear, a resurgence of interests in CRE assets seems likely.
Though people may not be returning en masse to brick and mortar offices, the last few years have brought vibes of repurposing and innovation to the CRE market with commercial spaces being utilized for special interests; warehouses, data centers, medical facility extensions, and research labs.
Supply chains have made headlines lately and they may likely remain a main news topic. We mentioned warehouses as a CRE niche market – this extends to shipping and distribution centers as well.
“The global e-commerce fulfillment services market size was valued at USD 77.57 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 10% from 2021 to 2028”, according to a Grand View Research Study.
Warehouses and fulfillment centers make up a small part of the physical locations required to sustain a much larger digital marketplace. From food storage to supply chain hubs we can expect industrial CRE assets to grow in demand.
Embracing technology may have been the biggest edge Real Estate has given itself for the National access alone.
CRE tech solutions promote a high level of connectivity – not just within your internal operations – but with the Commercial Real Estate market on a National level, opening you up to databases, buyer information, networks, and marketing opportunities beyond your county or state.
CRE tech also makes it easy for out of state investors to stay up-to-date in terms of assets and reporting while making it easy to generate contracts, complete transactions, and manage deals.
Despite the move to digital solutions for eCommerce and conducting business, owning land is still an unparalleled asset and key indicator for wealth with an estimated $15 trillion in total US commercial real estate assets and a $485 billion annual US rental market.
With the continued growth in the U.S. market, integrating tech is the only way to stay on top of the variety of opportunities and transaction models that are emerging.
Consider the purchase process – or even the leasing process – which now is all done via Docusign, digital transactions, and digital contracts. Buyers shop for properties online and have started buying sight unseen with the aid of site plans, video walkthroughs and drone photographs.
Real Estate Tech also cuts down on time and cost by streamlining the title process and integrating with necessary third-parties and vendors.
More changes will come for asset management in the form of facilitating processes, automating processing – even connecting property assets to create and share site plans, define property needs, and plan the scope of large-scale projects.
Even with the surge of innovation in CRE tech, the landscape is still new – very much a frontier – and can be challenging to navigate or integrate into your company in the way that will give you the best use out of the platforms you partner with.
At Real Dash, we can help you apply a smart tech solution to your existing business and provide the tools you need to maximize the potential of your current assets while you plan and scale for growth and incorporate more digital tools.
It’s an exciting time in real estate. Stay connected, grow your network, manage your assets, and make sure you’re prepared; schedule a demo with us today!
