3 trends in Commercial Real Estate

Many people are surprised the economic growth has not hit the end of the growth cycle, but there is a general indication over the last seven years and it’s expected that the current cycle might take just under two years to hit the top.

So, what trends are expected to affect the commercial real estate market in the U.S. this year? Here are three trends to look out for:

The Concept of New Urbanism

The number of boomers retiring is on the rise with the number hitting over 10,000 every single day. It’s quite interesting that these boomers downsize from their big homes to walkable communities which are designed under the concept of New Urbanism. The trend has been in existence since the 80s but is quickly gaining fame over the last couple of years. The planning and development approach focuses on allocating the streets for people, and not cars. People can therefore easily walk to work, schools, shopping centers, or public spaces.

Uncertainties in Retail Business

For the first time in history, more sales were made online as compared to in-store sales during the 2015 Thanksgiving shopping weekend. This is a strong indication that retailers may begin to employ a showroom approach to improve their sales, while some will still strive to strike a balance between in-store selling and online selling.

International Investment Opportunities

Overseas investment in the commercial real estate markets in the U.S. is again back to the pre-crisis levels. Currently, the leaders include China, Norway, Canada, and Singapore. Many real estate investment experts predict that the foreign investment will continue to rise as many overseas investors look to gain transparency and stability in the U.S. commercial real estate industry.

Other sectors that continue to attract investor interest include senior housing and student housing sectors. The trend is likely to continue into the near future as long as the economic fundamentals and demographics point to rising demand.