By 2039, commercial real estate should be thriving. But over the next 25 years, it will be greatly influenced by changes in demographics, technology, globalization, and economic and environmental realities, according to CNBC.Commercial practitioners gave CNBC several “bold” predictions for the U.S. commercial real estate sector by 2039:
- Many shopping malls fade away. As e-commerce rises, malls will continue to decline, according to Rick Fedrizzi, president and CEO of the U.S. Green Building Council. He expects some teardowns, but repurposing will give new lift to many spaces. “Established places like shopping malls will become like town centers, where people can come together, where their doctors and day care will be, where they can gather after major devastations.”
- Baby boomers drive construction. Several commercial real estate areas will likely benefit from baby boomers’ influence, experts predict. For one, “we’re an aging population, so in 25 years, there’s going to be a heavy focus on medical-related facilities,” says Kenneth Riggs, president and CEO of Real Estate Research Corp. Riggs also predicts a shift toward affordable multigenerational housing, particularly near mass transit. Also, more boomers may turn to senior housing, and growth will be explosive. “Right now, senior housing is a food group in real estate, but it’s like vegan or something, not that established,” Riggs says. “In 25 years, it will be a major food group.”
- Urbanization booms. Gen Xers and Yers who seem to prefer living and working in compact areas will, in part, drive this trend. The multifamily residential market is expected to grow due to the expanding preferences of urbanization, and more companies will move to downtown areas to aid in recruitment efforts, says Rick Cleveland, a managing director at Cushman & Wakefield. Suburbs will also remain important, but they may try to replicate the city experience with greater mixed-use projects that comprise rental, retail and office. “The way most of the suburbs will evolve is that there’s an interim step: They’ll be connected to cities by high-speed or light rail, and they’ll become walkable communities with a sense of place,” says Fedrizzi.
- Green building evolves. Efforts to meet environmental standards tend to be costly, but industries realize that they are important in the long run. Commercial buildings 25 years from now will need to be up to the U.S. Green Building Council’s LEED standards, according to the commercial experts interviewed by CNBC. That may mean some existing structures will need to be torn down or undergo a retrofit.
Source: “7 Bold Commercial Real Estate Predictions,” CNBC.com (March 24, 2014)
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