Commercial Real Estate Evolves Due To Market Shift
The commercial real estate market changes almost on a daily basis and many reasons exist as to why.
According to David Leb, sales associate at Cushman & Wakefield | CRESCO Real Estate in Independence, and Scott Simon, president of North Pointe Realty in Mayfield Heights, the market can change for a number of reasons.
“There is a major focus on flexibility in commercial real estate – more job sharing, hoteling and a focus on new transportation options,” Simon said. “Businesses and their employees are looking for the ‘quality of life’ components, not just a concrete box to conduct their business. What restaurants are close to my office? Where can I walk or workout, which is close?”
Leb said, “One major shift is that the office market has continued a trend towards a seller’s market rather than a buyer’s market, which is a positive and healthy sign for Northeast Ohio. Whereas office landlords used to provide more free rent and tenant improvement allowances, now landlords are giving up less in incentives because there is less vacant quality space in the market.”
Simon said these changes occur because there is a drive for better technology and mobility, and due to the infusion of millennials in the workplace.
“People don’t need, or want, hard-walled offices with mahogany doors anymore,” he said. “Open work spaces and pingpong tables become as important as marble bathrooms used to be. Businesses want environments which match their corporate culture, that may mean concrete floors and walls with graffiti or it may mean a clean, minimalist vibe.”
On the other hand, Leb said a few things have been happening simultaneously in Northeast Ohio, which leads the market away from office space.
“The economy continues to grow and expand and business owners in Northeast Ohio have strong confidence that the economy will continue at this pace,” he said. “Secondly, the strength of the multi-family market in Cleveland has resulted in developers converting obsolete office space into apartments. The lessened supply of office space in the downtown market, coupled with a multi-year run of a strong and growing economy has resulted in a more competitive and robust office market for Cleveland.”
Both professionals said these market changes directly impact the way commercial real estate agents function.
“Adapting to those changes is critical to our success,” Simon said. “For example, listening is key. When I represent a client, I begin by taking the time to deeply learn about their business model, their growth plans, their employee demographics. That helps me guide them through the process efficiently.”
Leb said, “Our business is purely information driven and our value as real estate professionals is centered on our knowledge of the market and how we can help our clients leverage the market for a favorable solution.”
Both professionals said the market will continue to change and businesses will continue to adapt.
“For Cleveland, I expect we will see a strong uptick in co-working spaces,” Leb said. “Most of the cities of our size across the U.S. have a large and growing segment of the market that specializes in co-working spaces, built especially for start-ups and entrepreneurs. We are starting to see more of this in the market now, and I expect that trend to continue.”
Simon said, “I see commercial real estate becoming more and more specialized and customer focused. With my clients, I become more than their broker. I become their advocate, their go-to person and especially their problem-solver with anything that comes up.”
Article Resource: Cleveland Jewish News