The COVID-19 pandemic has greatly affected the real estate industry. As more and more companies put out mandates requiring their employees to work from home, we have seen that the demand for large office spaces has decreased. People are no longer buying new properties. As the economy shrinks, the value of money changes. Sellers are unsure of what price they should charge, or how to adjust those prices considering inflation. Buyers are also having to reconsider whether they want to spend money on a new house, or whether to keep it safe in a bank until the pandemic is over.
All of these factors have impacted the real estate sector adversely as both demand and supply have dipped. The following article will explain more about these pressing concerns, and what the best course of action is to response such issues.
Benjamin Gordon Cambridge Capital Reflects on how People Working in Real Estate Should Reorient Their Business Models
According to Benjamin Gordon,people working in real estate need to adopt new ways of conducting their business if they want their industry to survive.
- Working with office spaces
Presently, the demand for office space is low, and this does not seem likely to change in the foreseeable future. Most companies are now preparing to lease small office spaces while having a majority of their workforce work from home. Some companies have also decided to share office spaces with other organizations in order to cut costs.
However, there aresome companies that are looking for larger spaces. These include companies related to healthcare, eCommerce, and pharmaceuticals; allsectors which have had more business and revenues during the pandemic.
Under such circumstances, it is best for landlords and potential renters to focus only on the short-term, and to lease properties for a specific period of time while avoiding making any long-term investments.
- Working inthe retail sector
According to Benjamin Gordon Cambridge Capital, the retail sector has seen utter devastation as shops and malls closed for months on end. People still had to pay rent for their shops,all the while having no source of income and no business. Consequently, some business owners have closed down shops completely. When this happens, landlords should consider lowering rent and dividing office spaces up to be leased by multiple tenants. Through this approach, one tenant will not have to suffer the burden of a high costof rent – instead, it can be divided between several business owners. As such, all parties would stand to benefit from this approach.
The real estate market in both commercial and domestic sectors will take time to recover. However, with some basic changes, there is a decreased chance of experiencing great losses. Landlords need to understand that eCommerce is here to stay, and offices will no longer need to rent out large spaces. Other similar adjustments should be incorporated in the real estate sector in order for it to both survive and thrive.