The Boston Metro commercial real estate market has experienced several years of growth, and most analysts expect our positive trends to continue for the near future. Yet the national picture of commercial real estate activity is less rosy. Some economists predict that a slowdown is possible for retail and office space in the upcoming months.
Given the variety of professional opinion, it can be difficult to project what challenges loom on the horizon. For insights, we’re going to share some highlights from the 2017 CRE® Top Ten Issues Affecting Real Estate, along with our own thoughts!
If there is one word that defines the economic risks of today’s markets, it’s disruption. Business conditions and consumer preferences can change quickly. The forces behind disruption are multi-faceted, but the CRE® report names the most likely causes:
Technology: artificial intelligence and robotics are predicted to replace up to 47% of today’s jobs. Rapidly-developing technology means that our ways of producing goods, conducting business and distributing products and services will be ever-changing.
Climate: rising sea levels and changing weather patterns could disrupt future commercial real estate values in unpredictable ways.
Global: demand for natural resources, international trade policies, immigration trends and geo-political events can create economic and demographic shifts affecting commercial real estate.
While disruption is generally viewed as a challenge to holders of commercial real estate, positive results can occur when the status quo is shaken up.
For example, the retail sector has experienced significant disruption from online shopping, and from changing consumer preferences. Vacancy rates are up. However, some malls are successfully evolving by offering events and experiences that place entertainment and social opportunities into the retail environment. Other shopping centers are redeveloping into mixed-use commercial properties with residential units.
What does it all mean for the future of commercial real estate in the Boston Metro? Our market is unique, thanks to the depth and quality of educational institutions in our area. We attract a young demographic that comes for the educational opportunities, and then stays for the employment prospects. While we are not immune from disruption, our innovative universities, employers and start-ups have a hand in creating some of it!
When you are ready to begin, relocate or expand your business in the Boston Metro, team up with the Jay Nuss Realty Group! Whether you are thinking of buying or leasing Boston Metro commercial real estate, we can help you find the ideal property. We will provide you with professional tenant representation to help you make the best decisions.
Contact us today for expert guidance!