4 Ways Commercial Property Investment Has Changed Since the Pandemic

15 Jul 4 Ways Commercial Property Investment Has Changed Since the Pandemic

The pandemic changed the whole world. We will all be adapting to those changes for years to come, but as COVID restrictions start to fade into memory, it’s important to understand the most rapid and powerful changes that are already upon us.

In terms of commercial property investment, there are four things that everyone needs to understand. Demand is still out there, but it has transformed and looks very different from commercial property investment just a few years ago.

Increased Industrial Demand

Lockdowns related to the pandemic forced businesses to rapidly adjust their models. Restaurants switched to delivery only, offices went online, and eCommerce took over retail. Many of those switches have proved to be sustainable, and that has impacted demand.

According to Deloitte, investment in new commercial structures is way down. New office structure building is still down 20 percent from the start of the pandemic. Multi-merchandize shopping locations are down 31 percent, and food and beverage establishments are down 33 percent.

Meanwhile, warehouse construction is up. Businesses have figured out that they don’t need to provide services in-house. Instead, it’s all about delivery, and commercial property investment has responded.

Different Amenities Rule Commercial Property

Despite these shifts, offices and other commercial properties have not disappeared entirely. But, those that remain are seeing new shifts in demand.

Most notably, offices don’t look like they did just a few years ago. Before the pandemic, office spaces were designed around an enjoyable experience. You could find lounge areas, onsite gyms, coffee bars, and even places to nap.

Now, safety, space, and remote communication dominate. Developers and investors are responding to this shift, and you’ll see many old offices retrofitted with better air quality management, increased virtual connectivity, and more space between the people who aren’t working remotely.

Once again, Deloitte’s numbers reflect these changes. Commercial equipment investment is still much higher than pre-pandemic levels, especially information-processing equipment.

Commercial Homes Are Hot

As development and demand switch away from traditional commercial properties, new opportunities are filling the void. Commercial homes are a great place to put money. Commercial homes can include any property that is designed for residency and rented commercially. That would apply to single-dwelling homes (such as an Airbnb property) and multi-family homes (including duplexes and triplexes).

There is still a large housing crunch. Whether looking to purchase these homes for commercial use or developing new buildings, it’s a major growth sector.

Leasebacks Are Big, Especially in Healthcare

In 2022, an emerging trend is an increase in the use of leasebacks. These maneuvers allow a business to liquidate real estate capital without disrupting daily operations. They are currently dominating healthcare capital generation.

From an investor standpoint, leasebacks are a great opportunity. You can purchase a valued property with a lessee attached to the deal. Anyone searching for more cash flow should look into leaseback agreements.

Contact CCIG Loans

If you’re a Realtor or loan originator trying to complete a deal, and you need help with alternate commercial investment property financing after a bank turndown, reach out to CCIG today. We offer options with no income verification and no tax returns, so your clients can get a private money, no doc, or simple doc loan, and make their purchase.