Ways the Coronavirus Is Changing Commercial Real Estate

COVID-19 has upended the world and commercial real estate has not been immune from the effects. As offices, hotels, restaurants, and many retail stores and malls sat empty – and activity in warehouses escalated in response to the surge in e-commerce – COVID-19 radically altered the industry’s long-term expectations.

Here are some significant effects that are likely to linger, and how they could transform commercial real estate.

White-collar business trends

Many companies have found themselves operating in unprecedented ways to continue conducting business. Businesses that had been resistant to remote work were forced to turn to it. Those that have done so successfully may pivot to a smaller on-site workforce in the long run, reducing their need for pricey office space. The trend towards open-space floor plans could come to an abrupt halt due to fears related to the spreading of contagion. With business travel largely restricted, companies may have discovered that videoconferencing can be as effective as in-person meetings.

The retail shift

Stay-at-home orders prompted many people to shop online for items they had not previously, such as groceries, and many are expected to retain the habit. While the demand for physical stores continues to drop, the demand for the data centers that power online shopping and “last-mile” warehouses that facilitate quick delivery could grow.

Safety and health concerns

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