The COVID-19 pandemic is an unimaginable and unprecedented healthcare crisis that has crippled the global economy and healthcare sectors. As the world struggles to combat this deadly and novel virus, business activity has come to a standstill. Industries across the world are struggling to reopen and recuperate their losses. Naturally, the real estate industry is no different in this regard.
Commercial real estate market has received a deadly impact, and from large-scale corporations and retail REITs to midsize realtors and property managers, everyone is struggling to muscle through the coronavirus pandemic.
Experts are mostly focused on large-scale real estate firms and realtors with extensive portfolios, but this article will attempt to take a look at midsize realtors and operators. Keep reading to come across some fascinating trends emerging in the real estate landscape.
The retail space has witnessed rapid evolution in the real estate landscape, and one particular niche has caught attention by its ability to thrive despite the pandemic. The niche is the suburban retail centers. Community retail centers in suburban areas are immensely popular for they offer convenience and amenities.
A neighborhood retail center typically features a restaurant, a bar and a convenience store. In recent months, these centers have dramatically evolved into popular venues for homeowners and residents seeking some outdoor fun and desperate to get out of home. Given the panic and fear, no resident is willing to venture far away from home or come into contact with large crowds of people. Therefore, these community retail centers have emerged as a convenient hangout spot to safely meet up with friends or grab a bite to eat while walking around the block. It is interesting to note that in most cases, these retail centers are owned and operated by smaller boutique real estate firms and operators.
Experts point out that in recent months, these small real estate firms have been compelled to reinvent their operations, transform their business models and find new ways to bolster their presence in the industry.
For instance, the Sunbelt region of the United States has witnessed a striking evolution of retail centers across Suburban neighborhoods. These retail centers can be regarded as a smaller alternative to commercial areas featuring large grocery stores and supermarkets. These retail centers are more focused on serving a smaller target audience with a more fluid combination of tenants.
The Arrival of “Parklettes”
COVID-19 has sped up the pace of digital innovation within the suburban retail space. Retail property owners, realtors and operators are forced to reexamine the viability of their operations and the combination of tenants.
The coronavirus pandemic has led to an increase in curbside pickup and delivery, a trend that was first observed during the lock-down period in spring. Retail property owners have quickly adapted to this change, and have repurposed their parking spaces to create elaborate outdoor seating environments. Indoor seating is no longer as option as people are increasingly conscious about practicing the 6-feet distance rule.
Property owners are repurposing their space to create outdoor seating to attract customers with safety enhancements. Enhancement budgets and projects are focused on creating outdoor spaces that will prove more viable and useful. In many cities across the world, parking spaces on the streets are being repurposed into elaborate parklettes.
Parklettes are patios that offer seating area and entertainment for an ambient outdoor eating environment that is compliant with safe distancing regulations. It is pertinent to note that many indoor businesses and restaurants have failed to survive the pandemic, and business owners are now reinventing their business models to cut back losses and drive profitability by meeting consumer demands effectively.
The pandemic has certainly quickened the pace of digital transformation, compelling businesses to speed up the transition to online and cloud-based operations. Today, consumers seek the convenience of a QR code menu, and online processes of ordering and pickup. They want to make cash-free and even touch-free payments with no-contact deliveries. Moving forward, experts believe that consumers are unlikely to want to touch anything.
Even after the pandemic boils over, these changes in consumer behavior are here to stay. Businesses across the real estate industry and other sectors are rapidly introducing consumer-friendly, convenient and flexible buying experiences. Digital transformation that would otherwise take at least a decade has been ushered in a few months, completely altering the relationship between businesses and their consumers.
Another change in business activity occurred that when businesses had to embrace the work-from-home model, and realized that many activities cannot be performed with a teleworker model. Small and medium-scale enterprises quickly adopted cloud-based applications and digital innovations.
Zoom, Teams and other customer and employee coordination platforms became rapidly popular. Today, consumers are ordering everything through mobile apps and portals. It is important to note that work-from-home has ushered in a powerful new age of productivity, efficiency and cost-reduction. The pandemic has certainly sped up the pace of this transition and businesses have much to gain by widely adopting this mode of business operations.
Commercial real estate owners are rapidly realizing that remote working allows them to scale their team, acquire skilled talent and enhance their customer service experience considerably.
Adoption of Electronic Payments
In the commercial real estate sector, electronic payments have emerged as a major trend that has been rapidly adopted during the last 6 months. Earlier, it was expected to be implemented in the next 5 years, but the increased fear of catching the virus has compelled businesses and consumers to shift to electronic payment methods.
It is interesting to note that despite the rapid deterioration and economically crippling implications of the pandemic, business owners and the real estate industry continue to explore new strategies to adapt to the new normal and thrive in these unprecedented circumstances. Muscling through the COVID-19 pandemic is not an easy challenge, but it is a necessary one, and business owners across the real estate industry have demonstrated an inspiring resilience and an innovative outlook.