Even as businesses navigate returning to the office in earnest, the demand for flexible work arrangements isn’t dying down. For real estate investors, the time for considering whether to make changes to better accommodate how people are currently living and working is long gone. It’s now time to take action if investors want to keep up in this new environment.
To help investors stay on top of how working from home has impacted the future of the real estate industry, 13 Forbes Business Council members share a few of the trends they need to be aware of going forward.
1. Decreasing Reliability Of Office Space Demand
Real estate investors need to start recognizing the shift in the reliability of consistent cash flow surrounding commercial real estate. As major institutions are allowing employees to work from home, the demand for office space will decrease, greatly impacting the value of commercial real estate offering office space. This decrease in demand would be a warning sign for investors going forward. – Johnny Marines, Johnny Marines Enterprises
2. Technologically Advanced Workspaces
The future is hybrid, so investors should focus on real estate with flexible and technologically advanced workspaces. It will be critical to offer a higher caliber of amenities to draw workers back to the office with health and wellness, fitness, food and beverage offerings. Technology is also key to keeping remote and in-person employees connected with each other and with clients. – Ryan Simonetti, Convene
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3. Properties Able To Meet Every Possible Need
Flexible work arrangements may influence how business leaders value the use of large commercial space including offices, on-site retail, etc. Commercial real estate investors should consider space that promotes open floor concepts, shared workspaces for hybrid staffing models and even smaller square-footage options for organizations that choose to decentralize or allow for staff to work from home. – Dr. Donte Vaughn, CultureWorx
4. Desire For Flexible Access To Office Amenities
People working from home still have the desire and need for certain in-office amenities. If I need to print a proposal for a client, I want a high-quality printer. If I want to host a strategy workshop, I need a good place with A/V systems, whiteboards and ample workspace to do that. A flexible option to access those things would be very appealing. – Martha Holler, ShinePR
5. As-Needed Office Spaces
We struggled when some of our team wanted to come into the office occasionally and others wanted to be 100% remote. Traditional leases didn’t work and co-working didn’t work since most wanted dedicated desks. We went with Bond Collective. We have a private six-person office that any team members can use, but we could have space for all 12 of us if needed. That’s the new co-working—not people, but spaces. – Carolyn Lowe, ROI Swift
6. Residential Units With Dedicated Workspaces
As work from home becomes a more normal part of everyday life, real estate investors should be looking to adapt their holdings accordingly. In Almega’s portfolio of residential real estate, we are making sure our units have some form of dedicated workspace. Something as simple as space that is ideal for video conferencing in a unit goes a long way with tenants. – Basem Hanna, Almega Co.
7. Higher Management And Maintenance Needs
Working from home means working from your apartment for many people. A tenant working from an apartment that is owned by a real estate investor typically has a lot more negative consequences than positive ones. These consequences include more wear and tear, higher utility usage, tenant infighting due to the proximity of neighbors and tenants being hyperaware of small repairs they would have otherwise missed if they weren’t home as much. – Ari Chazanas, Lotus West Properties
8. Increased Desire For Premium Residential Amenities
More and more tenants are willing to pay a premium for an apartment with a nook or a separate room that they can convert to a working space or a small office. Tenants also put more weight these days on outdoor amenities, as they spend more time working from home. For example, a state-of-the-art swimming pool, gym or sports court are more important than ever to attract tenants. – Ellie Perlman, Blue Lake Capital LLC
9. Malleable Properties
Workers are increasingly demanding a work-from-home environment. They don’t want to go back to the old way of being micromanaged in an office setting. If you own real estate, make sure it has a way to be outfitted easily for different kinds of businesses. No matter what your office space of the past was, have an entirely different utility and function potential in the future. Think outside the box. – LaMont Leavitt, innoviHealth
10. Community-Focused Properties
The easy answer is less office space, but I don’t think it’s that simple. In most cases, people want flexibility, not complete isolation. Investors should consider projects that include flexible workspaces, restaurants and retail to support that environment, as well as amenities (a dog park for example) that might not show up in the economic model, but are extremely important to retain their consumers. – Landon Eckles, Clean Juice
11. More Short- And Long-Term Rental Options
Real estate investors should turn their attention to other selling points for specific markets since properties outside of large cities are growing. In this higher rental trending market, investors can see returns by offering short- or long-term rentals. Hubs of culture and interests are continuing to grow, so investors may want to focus on nascent markets too. – Udi Dorner, SetSchedule
12. Growing Interest In Secondary Cities And College Towns
One trend is the increasing popularity of secondary cities and college towns. Professionals who can now work remotely are willing to move out of larger metros and city centers to areas with more affordable housing options and more space. At the same time, these mobile workers are able to bring their incomes with them and can spend or invest extra in the things that matter to them. – Ryan Frazier, Arrived
13. Hospitable Work Environments
In addition to flexible spaces, hospitality is at an all-time high. Flexible space is actually indicative of a larger trend for more hospitable experiences at work. This will become increasingly important as more tenants return to the office and expect more personalized, consumer-first benefits in the workplace. It’ll increase property value and help attract and retain tenants in our modern landscape. – Chase Garbarino, HqO