Recently, Forbes published an interesting article outlining how the millennial-led gig economy is impacting the commercial real estate industry. The piece focuses on the mass urbanization from millennials and Gen-X’ers, their demand for flexible workspace, and how these generational trends are changing the way commercial office space is viewed, leased, and utilized.
Although office space can be more volatile than other commercial assets, when managed appropriately, they can be well worth the investment, generating monthly cash flow and building equity over time. Office buildings also come in a wide range of sizes and often qualify for flexible financing, making these properties approachable, even for new investors. If you already own office space or are thinking of entering this realm of real estate, we’re sharing some things that can help you make the right investment choice or improve your existing property to appeal to a broader and evolving audience of workers.
Consider Location. As stated in the Forbes piece, companies are working more with freelance consultants. They may need to occasionally meet with these remote workers which means, they not only need to be conveniently located for their own employees but also central for freelancers. Offices in city centers will be most appealing and are likely to fetch higher rents. Though these may carry higher up-front costs when looking for an ideal investment space, the payoff will likely be greater.
Be Flexible. As workers demand flexibility from their jobs, physical spaces must also be flexible. Be willing to work with your tenants to create spaces that work best for them and their business practices. They may want to knock down walls to create an open environment or create a custom layout with breakout meeting spaces. As with any tenant, it’s important to listen to their needs. As the vision of the traditional workforce transforms, don’t be surprised if tenants want to take an unconventional approach to their office space.
Think About Co-Working. All those remote gig workers need places to work. While many operate out of their homes, others choose to rent spaces in coworking offices to provide a physical space for productivity along with social interaction and business collaboration. This demand within this sector of office buildings continues to increase, creating ideal conditions for investment consideration.
Appeal to the Masses. Regardless of the type of businesses leasing your space, there are some simple aesthetic improvements you can make that will make your office space appealing to all types of businesses:
Whether you’re thinking of investing in office space in the Lowcountry, need help renting or managing your existing space, or just need some guidance, we’re happy to help. Reach out to us here or stop into our downtown office for coffee – our doors are always open, and we’re excited to help you reach your commercial real estate investment goals.