It’s not easy to predict the future of commercial real estate. But Cushman & Wakefield is at least trying to identify some of the key trends that will shape this future. On the company’s list? Everything from workers buzzing on scooters to get to their offices to a shortage of industrial space to a surge of Generation Z members entering the workforce.
Cushman & Wakefield recently released its list of the top 10 CRE trends to watch in 2019. It’s a must-read for anyone wondering how new technology, customer demand and the younger generation might combine to change the way commercial real estate is bought and sold.
Trend 10: Technology companies are no longer just focusing on the coasts. Cushman & Wakefield says that tech firms, both major and start-up, are looking past the usual cities and expanding into locations that in the past have not been considered tech hubs. Cushman points to Austin, Dallas, Seattle and Atlanta as some of the cities that will benefit from this trend.
Trend 9: Microtransportation is on the rise. Cushman & Wakefield says that commuters will more frequently turn to bikes and scooters to complete their journeys to work. As the company says, the bike- and scooter-sharing market is expected to hit $6 billion by 2020.
Trend 8: A lack of industrial space will continue to be a challenge for tenants looking to grow their businesses. At the same time, Cushman & Wakefield predicts that industrial rents will rise 4.5 percent in 2019.
Trend 7: Members of Generation Z will steadily enter the workforce. The 61 million U.S. births from 1996 through 2010 is more than any previous generation.
Trend 6: Proptech is on the rise. Cushman & Wakefield says that the investment that the real estate industry makes in technology is expected to grow by $20 billion by 2020. The company predicts that this technology will change the way in which companies transact, analyze and approach commercial real estate.
Trend 5: Tariff and trade tension will continue to boost the costs of consumer goods.
Trend 4: Companies will focus more heavily on attracting and retaining workers when choosing warehouse sites. Cushman predicts that companies will invest in master-planned developments that feature restaurants, shopping, fitness centers, daycare options and landscaped walking trails.
Trend 3: Low unemployment will continue to drive up wages while excaberating the current labor shortages.
Trend 2: Co-everything? Cushman & Wakefield predicts that everything from co-retail – developments focused on entertainment, cultural and flexible spaces – to co-working arrangements will become even more popular in the coming years. The company even predicts that co-living concepts will begin to emerge.
Trend 1: Is a recession on the way? There are mixed signals. Yield curves are compressed, one indicator that a recession might be on the way. But other indicators suggest that CRE pros needn’t worry too much, at least for now, about a recession. Jobless claims remain low and consumer confidence is strong.