As we roll into another new year, turning over a new leaf involves taking a sober look at projections in the commercial real estate market. Undoubtedly, this past year has been economically challenging, causing industry shifts. We’ve seen high inflation, higher levels of layoffs, and other factors changing the economy.
Will 2023 see an improvement or will commercial real estate continue to struggle in financial performance this year? These completely valid concerns are analyzed by industry experts with the following predictions provided.
Commercial Real Estate Predictions for 2023
Pay attention to the following predictions to know how to best position your commercial real estate investment.
Be Prepared for a Moderate Downturn
High interest rates are predicted to continue as we forge ahead into the new year. Employers are unlikely to continue massive layoffs as the pool of potential employees has already narrowed considerably after 2022. The market is tight for skilled workers and employers are predicted to retain and recruit more strategically for long-term gains. Inflation is likely to decrease as we continue moving forward into 2023.
The commercial real estate industry is continuing to embrace flexible tech innovations in our internet-powered world. Making flexible provisions for anyone involved in the transactional process is expected more than ever. Replacing the need to be on-site using technology helps keep everything running smoothly and expedites decision-making and finalizing paperwork.
What commercial real estate tech trends are you going to see more of in 2023?
The following are a few of the many types of technology integration:
Property technology — Property technology involves using more analytics and artificial intelligence (AI) technology.
Smartphone access control — Mobile apps provide a central location for property access with options for virtual keys, configuring specific days and times for unlocking a space, opening doors and bypassing the need for in-unit hardware wiring.
Virtual tours — Contactless virtual tours are becoming increasingly popular. Expect an increase in virtual reality tours, touring models with smartphones and other flexible viewing methods.
Blockchain encryption — Securing data online is becoming more important as we step into a new year. Commercial tenants and anyone else involved in the transactional process need to know all information is securely stored in the digital space. Blockchain technology offers encryption and tokens to safely verify identity before granting access to contracts, leases and other sensitive information.
Increased Sustainability Efforts
Commercial real estate will continue to see an increase in sustainability in the market. More buildings are expected to modify their interior and exterior components to be more eco-friendly, mirroring the growing importance of sustainability in many other industries. Building projects are predicted to include plans designed around increased sustainability. Decarbonization efforts will continue to rise in priority, affecting the decision-making of investors and potential tenants alike.
More and more commercial real estate investors, developers, managers and tenants are gearing up for an exciting time in commercial real estate this year. With more flexibility, technology integration and eco-conscious planning, commercial real estate is in for a revitalized industry. These trends are boosting confidence across the board and inspiring more streamlined transactions.
We expect these 2023 commercial real estate trends to carry long-lasting benefits for years to come.
Plaza Companies is the Premier Choice of Commercial Real Estate
Plaza Companies is a full-service real estate firm specializing in the leasing, management, construction, and development of some of the most innovative commercial real estate projects in Arizona. Our firm specializes in staying connected and conscientious of all emerging trends in the market.
Contact us today to learn more about leasing the right space or anything else we offer!