The Boston market is continually shifting and morphing based on commercial activity and changes to different industries. As we progress through 2019, it is helpful to look back at 2018 and the most recent CRE developments. How might these Boston commercial real estate market trends impact the 2019 market?
Shared Office Space Growth
Although not newly introduced in 2018, there was certainly a boost in the popularity of shared office spaces during the year. As WeWork and similar companies thrived, the very definition of office space has begun to change. Commercial real estate investors must now consider this new customer base and office model in lease offerings and alter existing infrastructures to meet the changing needs of companies.
Big retailers such as Toys ‘R Us and Sears closing is a reminder that the retail landscape is changing. Demand is dwindling for physical storefronts and shifting to distribution centers for online retailers. Commercial real estate owners are faced with the need to redevelop or reposition properties to attract a different set of tenant needs.
The need for technology is another one of the biggest Boston commercial real estate market trends of 2018. As consumers demand more instant gratification through technology tools and services, the needs of commercial tenants grow as well. Commercial real estate landlords must adapt to the infrastructure and service requirements required by CRE tenants. Read our article on Internet connectivity and lease rates for an example of technology-oriented CRE improvements.
Introduction of New Services
Another important lesson from 2018 is that new types of businesses and services will appear. From virtual reality theme parks to Internet café banks, technology is changing the types of services and experiences targeting consumers. Anticipating some of these trends and the future needs of CRE tenants can allow landlords to get ahead of the curve.
Summary of Boston Commercial Real Estate Market Trends
What do these Boston commercial real estate market trends tell us? Things are changing! Technology is here to stay and will change the way we all do business. Embracing these changes and identifying ways to quickly adapt will be the key to future success and profitability in commercial real estate investing.