Experts report that 2016 will look much like 2015 in the economic and employment sector with the biggest difference being continued growth in the commercial real estate industry. With unemployment expected to fall 5% early this year, the demand for more housing, retail space, and commercial real estate has expanded.
These 4 CRE trends for 2016 will reflect that expansion:
Urbanization for Everyone
Baby Boomers and Millennials are moving towards more urban spaces — both in work and housing. Baby Boomers are retiring at 10,000 a day, most looking to downsize, sell their homes and move to into walkable, urban or senior communities. Millennials are looking for the city as well but for different reasons. They are workaholics prone towards green initiatives. They are settling down later, opting to rent and looking to live closer to their jobs, shopping, etc., in an attempt towards less auto dependence.
According to a U.S. Census, urban sprawl increased 12.1 percent from 2000 to 2010. This is expected to continue, with an increasing demand for retail, office, and urban multifamily housing.
International Cash Floods U.S. Real Estate
The U.S.’s property market is safe as houses, and other property types. Investments in U.S. real estate is extremely sound — and global neighbors have noticed. As foreign countries like China continue pouring capital into the U.S. real estate market, American investors are facing hefty, and extremely rich, international competition. A study by firm Real Capital Analytics (RCA) reports a real estate asset rise of $62 billion over a one year period in 2015 from countries like Norway, Singapore, and Canada.
Retail Vs. Virtual
Technology. It kills as it serves. Last Thanksgiving weekend, online buying beat in-store purchases for the first time, a possible harbinger of years to come. The act of “showrooming” (browsing in-store, buying online) has become increasingly popular. Savvy storefront owners are taking this trend in stride by offering a combination of online and in-store options. Even online giant Amazon.com has begun putting brick-and-mortar in their future plans.
Experts predict grim news for iconic in-store establishments like Sears and JCPenney who may be experiencing closures in the upcoming year — maybe as soon as 2016.
Trends change as factors like the economy, politics, etc. shift but for the most part, we can expect for more of the same, except a lot more of it in 2016.