What The Future Brings: The Impact of Technology on Commercial Real Estate

Technological, social, and economic challenges of the future will change the way people live, work, and shop. These changes can significantly impact today’s climate, not just in residential, but in the commercial real estate sector as well and its portion of the value chain. The ultimate question is who will profit and who will lose money in the future world of commercial real estate. 

What can we expect?

The present evolution of technologies towards digitization and automation will cause massive changes within the industry. The job profiles that exist today will change, along with the clients’ demands on how the job is executed. There will be an increase of redundant low-skilled, blue-collar workers while, white-collar jobs will be more driven by data, performed remotely, which will impact the need for office spaces, as well as functional office design and furnishings. These developments promise to reshape the commercial real estate environment. 


The future is mobile

With autonomous cars just around the corner, we can expect major changes to the ways cities are built and developed. Property managers will have to evaluate how they use space. The decreased need for parking spaces both on and off the street will free up large areas for development. In some cities, landlords are converting parking space into commercial real estate, taking advantage of the premium location and street-level access. The new space requirements will include re-configured parking solutions for driverless cars and warehouses for automated loading machines. 

Tenant health and wellness

As global environmental concerns are gaining momentum, people are more concerned about the impact of commercial spaces on their health and wellness. A global 2016 survey by Deloitte that targeted the Millennial population showed that young professionals consider employee well-being as one of the most important qualities of a workplace. To meet these demands, companies are considering how to improve the health and well-being of their commercial tenants and residents. The overall prediction is that commercial properties that don’t meet the needs of modern tenants won’t see modern tenants. The survey analysis recommends that real estate companies should include tenants in decision-making, so they can better understand design elements that cater to health and wellness. 

Rise of smart energy products

With the UN predictions that the world population will reach 9.7 billion in 2050, over 66% will live and work in cities. As a consequence, commercial places will have to become increasingly urbanized with unprecedented integration of smart technologies, drones, autonomous vehicles, and automated services. The modern urban architecture will rely heavily on smart energy products like industrial lighting solutions shown here, as well as on data and technology to make life more comfortable. As a result, the cost of both commercial and residential real estate is expected to rise in those districts.

3D printing

We won’t have to wait long before builders are able to print entire floors with immense time savings. In China and Dubai, there are already low-rise commercial properties being developed with 3D printing, and the builders are reporting construction time reduced by 70% and cost by 80%. With its huge implications for construction, 3D printing is both a threat to traditional warehousing, as less space will be required, but also an opportunity for retailers to respond on-demand. 

Event-driven shopping

The rapid increase of online shopping will further reduce demand for retail real estate assets, with more demand for just-in-time logistics. Amazon is already experimenting with drone delivery service, claiming it’s much safer and faster than going through couriers or postal service. This way, logistics centers could be located at the periphery, freeing more space in the city center. Upper-end high street miles will still exist, primarily through the leisure PR function, but smaller retail businesses in decentralized regions will suffer the heaviest blow. To meet the demands of new customers and build interest, shopping malls will need to resort to more event-driven concepts that emphasize on experience rather than shopping. 


Fading relevance of real estate brokers

As individual market players in the real estate arena, real estate brokers will become increasingly redundant due to market transparency policies and automated rental negotiations between owners and lessees. Real estate transactions will be based on technologies like blockchain, which eliminates the need for the middle-man. On the other hand, the government won’t miss an opportunity to benefit from new developments through new tax models, such as a tax for automation. Part of this income will be much needed for mitigating social problems due to increased unemployment, which is a result of automated processes. Although the future banks will certainly take advantage of the high degree of debt financing for real estate projects, crowdfunding platforms will take their share as strong competitors to traditional banking. 

The word ‘smart’ has changed slightly in meaning over the last decade, as new technologies granted us even more features that help us manage our lives. The increasing automation of running the business will bring profound changes in the commercial real estate sector, that go far beyond smart buildings and shared workspaces.

Investing in Multifamily Real Estate: Top 5 Tips to Get You Started

Multifamily real estate is typically a diversification option for versed investors, and not a first-timer’s leap of faith. You need knowledge, expertise, and the negotiation skills to match the level of competitiveness in this industry, but it also makes for a wonderful choice in case you’re already familiar with real estate investing in general, and you’d like to enrich your portfolio further. This profitable choice can bring you a stable source of income, and it can serve as a stable, long-term investment that you can ultimately sell if such a need ever arises.

However, no matter how experienced you might be in other forms of real estate investing, jumping into this versatile field takes some research and adjustments. Let’s go over a few handy tips you can use on your own journey in order to make the most of this lovely opportunity!

Deciding on the location

Not all multifamily properties are created equal. In fact, among many factors that will affect their overall value and desirability in the eyes of your future tenants, one of the main deal-breakers can be the location. Since your target buyers and renters are families, you should consider features that will appeal to such an audience. Is there a reputable school in the vicinity? How about a playground? Are there safety measures in the neighborhood, such as regular patrol and security surveillance?

There are all kinds of conditions that might inspire a family to feel welcome in that particular location, so it’s vital to do your homework. That way, you can pick a location that will elicit offers before the ink dries on your investment contract.

Managing the management

Unlike one-person units and other real estate options that don’t focus on families, working with multifamily real estate properties requires quite a bit of legal knowledge and managerial skills. Whether you decide to be the key manager of the entire property you invest in, or you choose to hire a property manager, the decision is entirely yours. What matters most is that you have a solid base and that you fulfill all of your legal obligations.

One of those responsibilities includes obtaining the initial maintenance schedule for your property so as to compile the most relevant data on how you take care of your property. That means you need to follow the prescribed legal rules and meet your local government’s expectations when it comes to property maintenance in order to avoid financial and other penalties. If you alone cannot handle the burden of multifamily real estate management, make sure to work with an expert who can take over a portion of those chores.

Land on the right financing solution

A common issue even among versed investors is obtaining the right sum of money to purchase the property you find the most lucrative. These massive investments require a stable financing solution so that you can have that much-needed initial capital for this venture. Direct lenders are considered a safe and reliable option while partnering up with other investors is another viable opportunity especially if you already have trusted partners in the business.

Increase the value of your investment

Who said that being an investor is a dull occupation? On the contrary, if you choose to invest in multifamily real estate, you’ll need your creativity and imagination so that you can amplify the value of the properties you purchase. From increasing functionality of the space and installing a ground source heat pump, all the way to beautifying the exterior with finer design solutions, even the smallest of changes can lead to a major surge in value.

Sometimes, you’ll be able to find properties in a pristine location, but in desperate need of a thorough restoration or remodeling in order for them to be rentable. Make sure that this is an investment that is in line with your budget, and you’ll have a diamond in the rough in your hands, ready to become a prime spot for families after spruce.

Plan your tenant strategy

Finally, never invest in a property without preparing a strategy for your tenants. With the right policies in your hands and clearly defined procedures, you’ll be able to attract the right people to your property in no time.

Multifamily investing is a perfect opportunity to diversify your portfolio, and an exciting way to grow your community. Use these tips, and turn this endeavor into a streamlined journey towards purchasing your first multifamily property!

5 Home Building Trends for 2018 that Every Real Estate Needs to Know About

As we spend the last few days of 2017, real estate moguls and property managers can’t help but wonder what 2018 has in store. The home décor industry is also in an anticipatory mood for the coming year. 5 Home Building Trends for 2018 that Every Real Estate Needs to Know About For instance, home décor companies are brainstorming on new kitchen finishes and trendy paint colors for the New Year. The main reason why homeowners do a significant design remodel or engage in the construction of a custom home is to create a holistic personal space. This means that any home décor or remodeling firm should keep their consumers with the most current trend in the real estate industry. In this article, we will talk about the designs and decors in the home building industry that are going to revolutionize the real estate industry in the coming year of 2018.

Treatment and Finishes

Modern, sleek and aesthetic looks have taken over in the human life all thanks to technology. All these advancements have become a cliché, and now people want to get back to their original roots. Due to this fact, wood finishes will be a home décor incentive that no real estate firm should ignore in 2018. The home improvement décor may come in different forms including wooden plates, a rustic wooden lamp, a solid wooden table or exterior accents that are made from wood such as corbels, columns. The home designs of 2018 are likely to be all about wooden interior finishes and natural accents. Wood interiors compliment the desire by most homeowners to integrate with nature in today’s world where technology has almost made our lives artificial.

Iridescent Accents

While some owners plan on using earthly accessories to connect with the natural environment, there is a group of people who are willing to use the modern look of bright accents to embrace the future of home décor. Although lustrous accents give your home that aesthetic look that you are yearning for, it will cost you more than the available alternatives in the market. Most homeowners will prefer to start with a shiny tiled backlash or an iridescent pillow. This type of home décor is a mermaid-worthy look and is likely to gain traction in the future as homeowners are slowly embracing it.

More Open Spaces and Clean Lines

Even in traditional homes, spacious floors are becoming the trend going into the future. According to experts, the home construction industry is holistically becoming contemporary. Home builders are now focusing cleaner lines and the increased use of standing-seam roofs and Austin stone and doing away with turrets. Even the homeowners that chose to retain the traditional home exteriors have decided to go with open and modern concepts on their interiors. This always translated to tiny, wasted rooms and hallways. More usable space is still afforded by open floor designs to the dining areas and possibly to the living area. Designers have also brought the outdoors inside the home by the incorporation of more glass interior doors which are designed in such a way that they disappear after opening. As with any other system, efficiency is critical, and homeowners have realized that 100% of the floor space in their houses should be usable.

Geometric patterns

The day when geometric pattern designs would make a comeback in the home décor industry is finally here. These form of models can be seen in almost every part of the home area including in furniture and wallpapers. You can have the geometric pattern designs incorporated in your home using a wallpapered accent wall to give your house that new and fresh look. You can also make use of a new rug or some throw pillows to improve your aesthetic standing. If you are committed to having this new rend incorporated into your home, you can use a kitchen backsplash or a floor that is geometrically tiled. In 2018, this trend in home improvement will give a vintage and modern feel that anyone from any generation can appreciate.

Here’s How To Grow Your Real Estate Company Organically

New real estate agents are often so thrilled to begin a new career that they go to great lengths to attract potential clients. Experienced realtors are also striving to grow their companies and, as such, spend thousands on marketing campaigns that attempt to convince new customers to come their way. While there is nothing wrong with taking measures such as effective email marketing campaigns to attract new customers, the best advertising practices revolve around attention to detail along with your willingness to learn and be proactive in the industry.   Studies show that upwards of 80 percent of your company’s consistent revenue comes from less than 30 percent of your existing customer base. That means that of your 100-person client list, about 20 satisfied customers drive growth that takes your business to the next level. With so much riding on happy customers, it is vital that you develop ongoing strategies that place clients at the forefront of everything you do in the industry. Here are five ways to improve relationships, and hence business, in real estate.  

  1. Continually evolve

Despite what you were taught, maintaining a business is impossible. Your company should always be on the cutting-edge of the industry, which may at times feel as if you are not an expert in your field. Do not despise these uncomfortable times as they present opportunities for growth.   The most successful real estate agents thoroughly study their craft and attend seminars that help them better complete their jobs. Salespersons and brokers also invest in books and other educational resources on a consistent basis to keep up with the industry.  

  1. Bolster the needs of others

You will not get far in business unless you put the needs of your current customers and potential clients ahead of your comfort. A good way to satisfy customer needs is to ask yourself what the average client would expect from you, and then determine the best way to go about serving your public.  

  1. Follow up with clients

It does not matter how many times you call or send correspondence, your efforts to attract customers via follow-ups never grows old. It may be the time that you feel as if your email marketing tactics are doing little to accomplish your goal of growth that a customer calls you in need of a consultation.   Rewarding current clients who refer new buyers is another way that real estate agents grow their businesses. Even if the incentive is only two movie tickets, the fact that there is a benefit attached to your customers working to garner leads for your business is enough motivation to convince your client base to help with increasing business.  

  1. Establish new relationships

Networking is key in real estate. Not only is it important for you to develop new relationships with buyers, but it is also essential that you connect with fellow agents. There may be times when a salesperson or broker has a client who has requests outside of his scope. He may refer such individual to you and, as a result, bolster your business. The correlation between you and the customer cannot take place, though, without you making the first link between your co-worker. Such is the reason for establishing new relationships with both buyers as well as agents and brokers.  

  1. Take action

Proactiveness is the glue that holds everything together when you are a real estate agent. You can educate yourself on the latest trends in the industry and distribute flyers throughout the neighborhood, but such acts mean little if you do not work proficiently once you have hooked the client. Taking the laid-back approach is a good way to encourage customers to look for another agent who can answer all of their calls and accurately communicate their wishes and demands to sellers. You must be fierce and always one step ahead of proceedings if you want to close a deal quickly. Your ferocious attitude is what may convince clients to tell their friends and, hence, further grow your company.   Bringing increase to your real estate business is no easy feat. You must set a goal and be determined to see it through if you plan to go far in the industry. Focusing on customer service is the best way to secure your company’s longevity in real estate.

5 Real Estate Markets That Are Currently Underpriced

Investing in real estate by purchasing your own home can be a great long-term investment option. While buying a home in most markets and planning on owning it for a long period of time is almost always a great option, there are some real estate markets across the country that are now considered undervalued and provide more potential. The following five real estate markets are poised to experience higher than average increases in real estate values over the next 5 to 10 years.   Detroit, Michigan One city that has had one of the hardest hit real estate markets over the past two decades has been Detroit. Detroit was one of just a few cities that actually saw value declines during the real estate bubble. While they have had a lot of issues with foreclosures, it appears that the city is rebounding. Detroit is no longer in bankruptcy and has seen a lot of urban revitalization. Part of this has included tearing down vacant homes all over the city and replacing the land with parks and commercial properties.   Orlando, Florida Another city has it considered underpriced compared to other cities across the country is Orlando. Orlando was one of the fastest growing cities during the housing bubble. Once the bubble burst, many condo owners saw their property values fall dramatically. The city was further hit by a slowdown in the travel industry during the recent recession. Now that this has recovered, the demand for housing is starting to increase. The median value in the city is still only around $150,000, which makes is very affordable for someone new moving into the area.   Chicago, IL While Chicago is best known for being the third-largest city in the country, its real estate market is considered one of the best values today. In 2016, the median price for a home in Chicago grew by about 4% to a median price of $228,000. At the same time, unemployment in Chicago is continuing to reduce and more people are moving back into the city. This is making more and more neighborhoods turn into expensive communities with a lot of local amenities.   St George, Utah Another city that is considered to be undervalued are various urban and growing areas of Utah. While Salt Lake City and Park City have continued to have strong real estate markets, many of the best places to live in Utah are now considered to be in other areas of the city. The St. George, Utah area is located in the southwest part of the state and is considered one of the fastest-growing communities in the country. The city has an expanding local economy and still relatively affordable housing prices. In the coming years, St. George is expected to see continued above-average increases in its real estate home prices.   New York When most people think of New York City, they think of the glamorous high rises in Manhattan and trendy brownstones in Brooklyn. While the city is full of unique housing projects that are considered the most expensive if the world, the overall city median price is still considered very affordable. Overall, the city of New York City is considered to be undervalued by at least 10%. This is based largely on the fact that the $385,000 median home value is affordable to a large percentage of the population. Furthermore, the city has low occupancy and a lot of outside real estate investors, which are going to continue to increase the demand for housing in the city.   In conclusion, buying in owning a home is almost always a better long-term financial option than renting. While owning in most markets is a good idea, there are five real estate markets across the country today that are considered underpriced and offer the most potential upside.