The Next Evolution of Commercial Real Estate

The Next Evolution of Commercial Real Estate

The simplest way to define commercial real estate (CRE) is the use of property for the purposes of generating income. It is recognisable that CRE is continually evolving, thanks to the industry's ongoing integration of technology at all levels and changes in the external environment, like the current Covid 19 pandemic. 

Due to this, countless business owners have devised new tactics and methods that are appropriate for their workforce, such as introducing hybrid working or switching to co-working spaces. Here are a few factors which have the potential to result in the next evolution of commercial real estate.

Digital Evolution


Even though none of us could have predicted the fallout that 2020 would bring, the practice of working remotely was already on the rise prior to that. As a result, in recent years, digital evolution has become central to the furtherevolution of commercial real estate. This is why it is vital for us to understand that for digital evolution to occur; smart flexibility needs to be put in place. 

The employees have spoken for themselves; they wish to have a better quality of life, which means having the freedom to work where and when they want. To fulfill these wishes and adopt flexibility, companies may choose hybrid work and living for which they may prefer to pick a work-from-home friendly location. 

Hybrid working involves a schedule that allows for in-person cooperation and team building, as well as more flexibility. After all, who would want to completely work from home and have no social interactions, right?

When it comes to choosing a location for flexible working, co-working spaces are undoubtedly the most popular option. These spaces include office facilities and hold networking events, which aid in the development of relationships and social interactions as opposed to companies that are entirely virtual, have little to almost no personal relationships and suffer from lack of culture.

Pricing Evolution


Moving forward, when addressing the evolution of commercial real estate in the future, we must consider the changes in renting and costing. Following the Covid-19 pandemic, there has been a lot of uncertainty in the commercial real estate industry, making it difficult for firms to get a grip on things. 

Real estate investments have produced consistent cash flow and large profits over the last many years. However, this situation has changed since the Covid breakout, and real estate players have been severely struck by the pandemic's effects and sudden change in the market.

The enterprise value of real estate assets had dropped by 25%, according to a few assessments. It's of no surprise that owning and operating these properties would not be quite desirable when customers try to avoid crowds, businesses, restaurants, and etc.  

This has resulted in a huge drop in commercial real estate prices, and many investors are still reluctant to invest in commercial real estate. However, co-working spaces are still an ideal option for many who prefer staying in their budget during this hike.

Sustainable Evolution

When wanting to meet our needs as human beings, would we ever want to compromise the ability of our future generation to meet their needs? Certainly not! This is why in recent years; there has been a great shift in the lifestyles of many individuals as they have pledged to live in sustainable ways.  Simply said, sustainability refers to the ability to remain and expand in future without depleting natural resources. 

Environmentally friendly places, without a doubt, attract high-quality tenants, elevating a building's reputation. Sustainable places like "green buildings," are estimated to use less energy, emit approximately 35% less carbon dioxide, and produce 70 % less solid waste. Co-working spaces are also another way to decrease waste and ensure that less energy is being wasted.

In addition to that, commercial buildings that are more sustainable will keep more of their value over time and will be far more appealing to prospective tenants and investors, according to studies and data. Even though the costs of sustainable evolution are high, they are very beneficial in the long run. 

Final Thoughts

As a response to the pandemic and rapid technological improvements, the evolution of commercial real estate as a whole has met the challenge, resulting in a variety of positive adjustments to the business experiences on a whole. If you’re looking for a modern co-working space which fits your bill, head down to Iconic Workspaces.