COVID-19 has had an incredible impact on businesses and how they behave. The pandemic forced many to accelerate processes that were already in the making and others to adapt and change. Even if COVID-19 gets beaten, it is very unlikely that we will go to normal completely.

Some of the biggest consequences are affecting commercial real estate. And how commercial real estate gets affected influences the trends in residential real estate.

There has been much talk about remote work and big shopping centers and stores disappearing. Many of which, were already belly up on their finances. The consumer has adjusted to online shopping and now loves it. They are not willing to go to the store for something that is purely transactional so unless there’s an experience being provided, online shopping will continue to reign. Companies have realized how much they save with workers producing from home and had to invest a lot of money to get the infrastructure needed to make it happen so they won’t go back.

What does this mean for commercial real estate?

Shopping centers and malls

Some of the trends we will see is the closing of big department stores and shopping centers such as malls. But destroying these buildings is too expensive so some think that they will be remodeled into living spaces (if permits allow) and smaller office locations. Imagine going to a mall that is actually a business center with tons of offices. As difficult as it may seem, it is a possibility. Commercial buildings being transformed into something else or into residential are not something new.

Also, according to an article from McKinsey, permits, and regulations around construction may change. “Public-health officials may increasingly amend building codes to limit the risk of future pandemics, potentially affecting standards for HVAC, square footage per person, and amount of enclosed space”.

These modifications could also affect the hospitality and tourism industries. Big resorts may be particularly affected while vacation homes are becoming a preference for so many.

Office space

Big office spaces are also going to be reduced. Not only companies have invested in having employees home, but the employees are also happy and don’t want to go back to an office. So companies will reduce the space when and where they can and some smaller firms will move to rentals for the day or the hour when needed or certain days of the week.

How does this affect residential real estate?

Extra space

Well, individuals and families are looking for homes with that extra space that can be used as an office. With a work-from-home option or reduced commute to certain days of the month, having the house close to the office is no longer a priority which is allowing people to move to areas where lifestyle is better or the relations between price and square footage is more advantageous.

Location

Also, being that online shopping is growing and many shopping plazas and malls may disappear, these types of buildings may not be a reason for purchase or pricing in a home in the same way they were. On the contrary, proximity to delivery warehouses such as Amazon may be more advantageous. With food delivery growing, walk-in distance to restaurants may not be as required as before as long as they are close enough for Uber Eats rides to get to your home.

Investment homes

With hotels and resorts being avoided, there is an opportunity for the investment properties dedicated to vacation. However, this may not be permanent.

As with everything, only time will tell. Each location is different and the pandemic has not affected everyone in the same way. So, stay tuned to the signs in your area.

Maria Flores-Garcia

La Rosa Realty Kissimmee

Tel: 407- 930-3530

Cell: 407-591-2670

info@larosakissimmee.com

3032 Dyer Blvd, Kissimmee, FL 34741