The COVID-19 Pandemic brought about many changes and disruptions in the business world, not sparing the real estate industry. Among them was the total lockdown that led to the rise of remote working trends to keep businesses moving. However, even long after the pandemic, remote work remains the new cool, with many workers and employers preferring to collaborate remotely. While this trend has several benefits, including cutting down the cost of operation for many industries, the real estate industry, especially the commercial sector, has a different story.
Explore the impact of remote work on commercial real estate in this article.
Rising Demand for Rural and Suburban Areas
The rampant shift towards remote working trend brings about unmet demand for properties in rural and suburban areas. Since people working from home no longer need to live near their workplaces, many opt to relocate to rural areas for a quieter lifestyle. Suburban and rural areas also allow for larger home spaces and ample outdoor space for recreation; these privileges are rare in congested cities.
As a result, there is a surge in demand for properties in these locations and, consequently, a rise in prices. On the contrary, there is a drastic drop in demand for commercial properties in urban areas since companies are moving away from traditional offices. Nevertheless, commercial real estate can still smile to gradually return to remote-office integration, where some companies rent or buy office spaces to accommodate a few of their workers to collaborate in meeting their goals. Finding these spaces is straightforward. For example, if you’re in Nairobi, Kenya, you only need to search for apartments available for purchase in Nairobi on Hauzisha on Google.
Alternative Working Spaces
The emergence of the remote working trend is the mother of many alternative working spaces, including the following.
- Co-working Spaces
Co-working spaces are gaining popularity recently, with workers from various organizations working alongside each other in a shared environment. Many of these spaces offer essential amenities like meeting rooms, communal recreation zones, Wi-Fi, and access to networking opportunities.
They are ideal for freelancers, remote workers, small businesses, and startups. The best part is they are cost-effective and offer a professional working environment.
- Shared Offices
A shared office, popularly known as an executive suites or serviced office, is a ready-to-rent office space that organizations can rent for long-term or short-term use. You can find these spaces fully furnished with all essential amenities, allowing businesses to move in and continue with regular operations immediately. A shared office is ideal for businesses testing a new idea, those venturing into new markets, and companies seeking office space for a specific project.
- Flexible Arrangements
Flexible workspace entails several options to allow organizations and individuals to work in a way that suits their needs. This may include telecommunication options, remote work policies, virtual office utilization, and flexible schedules. Flexible arrangements allow employees to balance their work and life better by allowing them to choose when and where to work. As a result, it increases productivity per worker in every company by promoting employee morale.
The Effects of Alternative Workspaces on Commercial Real Estate
While the alternative workspaces are here to make remote work more accessible and productive, they significantly affect commercial real estate. The following are some effects of these new workspace trends.
- A Rise in Competition
With the rise of shared offices and co-working spaces comes an increase in competition in the commercial property market. Property owners and landlords must devise methods to adapt to the changing landscapes. Many are now choosing to enhance the amenities in their properties and offering flexible leasing options to attract more clients.
- Networking and Collaboration Opportunities
Alternative workspaces provide opportunities for collaboration and networking among talented individuals from different backgrounds, organizations, and industries. Co-working spaces mainly offer room for events, networking sessions, and workshops.
As a result, individuals have opportunities for knowledge sharing and professional growth. Property managers and owners can take advantage of this as it attracts companies seeking to expose their workers to a pool of like-minded individuals and tap into a wider community of experts.
- Local Communities Economic Growth
Real estate developers strive to make profits despite the rise in remote working trends and the demeaning of traditional office culture. Many are thus building alternative workspaces in local communities to cater to companies escaping the city uproar. As a result, the local community experiences significant growth as the development of these spaces gives rise to other complimentary businesses.
For example, these spaces attract freelancers, remote workers, and entrepreneurs who support local businesses, such as restaurants, cafes, shops, and residential rentals. With this symbiotic relationship between local communities and alternative workspaces, the local community can realize a vibrant ecosystem and a revitalized lifestyle. Therefore, commercial real estate developers can benefit from this remote work revolution as the demand for properties rises in these areas to cater to the incoming businesses.
While many developers cry about the drop in income in commercial properties due to the emergence of remote work, there are ways you can keep your cash flow consistent. The best way is to study the impact and navigate accordingly.
