The Future of Commercial Real Estate in a COVID-19 World
There is no doubt that COVID-19 has had a huge impact on the structure and operations of the workplace. We have seen rapid changes in the number of times workers show up for in-office work and how their interactions during the times spent in the building have changed.
As the realities of COVID-19 continue to unfold, more changes are expected in the ways that organizations and individuals do business. In order to be able to convince employees that workspaces are safe again, employers have to do a lot to make those spaces actually safe.
But to do this, they must work with the owners of the commercial spaces where they do business from. This is necessary because when the businesses that occupy a commercial building fail, the impact of that failure is felt by the owners of the building.
For instance, with people unable to go out to work, school, and play, there has been a huge increase in online retail. In the first few months of the pandemic, online retail went from less than 20% of all sales to over 30%, and this percentage is growing by the day.
When things like this happen, the businesses that lose market share and the owners of the premises they occupy suffer. Without sufficient sales to sustain their operations, retailers have to close shop. This often means one less tenant for the operator of the commercial building.
As an operator or investor in the commercial real estate space in Regina, Saskatchewan, what should you expect? How can you alter your business to meet the current need? What are the opportunities that will arise from the prevailing circumstances?
Expected changes in the design of commercial buildings
Flexible office spaces
With social distancing rules in place, offices need to be more spacious and flexible. They will require flexible floor plans with spaces that can be easily adjusted at a moment’s notice. They will need more multi-use areas and flexible well-spaced furniture.
Instead of large open floor spaces, there will be an emphasis on private rooms and a lot of focus on private video conferencing spaces. If you own an office building in the Downtown Regina area or any part of the city, implementing some of these changes will give you an edge over the competition.
Circulation and indoor air quality
How to create circulation pathways in offices is a major issue for commercial real estate designers to tackle. Previous designs that minimized air exchange between the inside and outside of a building are inadequate for preventing the transmission of viruses within office environments.
This is going to be a big issue in the employer’s ability to get their staff to in-office work. Office buildings will need advanced HVAC systems that actively monitor humidity, filtration. and air movement or dilution in order to maintain them in real-time.
Easy to clean antimicrobial surfaces
Owners of commercial properties must make “cleanability” a major part of their criteria when erecting new buildings or renovating old ones. The use of materials with antimicrobial qualities (such as copper), cleanable fabrics, less-textured, and bleachable surfaces will be some of the ways commercial spaces make their premises more attractive. Sensors that detect high traffic and alert the building manager to when areas need to be cleaned will be an advantage.
Conversion of buildings to other uses
Conversion of office buildings to other uses
The office vacancy rate in Regina, Saskatchewan used to be Canada’s lowest at 1.9 percent. For an area with previously high demands, adjusting to the new normal can be difficult. If you have a suburban office space that you have been struggling to find tenants for, there is an opportunity to convert it to industrial or mixed-use development.
These types of properties are seeing sustained demand because of the continued upward rise in the price of land for industrial or residential uses. Many underutilized office spaces are being converted to other types of commercial uses and yours can be one of them.
Conversion of malls and shopping centers to industrial use
Even before the pandemic, malls in Regina were struggling. In early 2020, Northgate Mall lost Lowe’s, Things Engraved, La Senza, and Gifts Etc. The same trend was evident at Cornwall Centre and Victoria Square Shopping Centre. But some mall owners are finding a way out. With the surge in online retail, industrial suppliers are struggling to keep up with demand, especially in locations with inadequate last-mile distribution centers.
This has led to the massive demand for industrial warehouses facilities and last-mile distribution centers. Owners of struggling malls and shopping centers are taking advantage of this by converting their spaces.
Conversion of hotels to multifamily properties
Owners of hotels in prime locations that are struggling because of travel restrictions and social distancing rules have an opportunity to convert their buildings to multifamily properties.
These hotels are already designed for residential use and have common areas. This makes perfect sense due to the ease of converting the property and because multifamily properties continue to see an increased demand despite of the pandemic.
Share this Article