Within weeks, the global outbreak of the coronavirus brought about significant changes to how people socialise, travel, work and live. The working world has resorted to remote options; consumers have adapted to travel and movement restrictions, while spending habits have focused on essential products. Social distancing has changed the way people interact with physical space, and the effect going forward will undoubtedly be felt in both public and private settings.

From an economic perspective, all sectors have been affected, including commercial real estate. Fears of a recession have disrupted business for many in this sector, as buyers and sellers grapple with impacted financial resources. To that effect, some proposed real estate investments will have to be changed or cancelled altogether, and the uncertain nature of the crisis may increase the number of risk-averse real estate investors. Still, some opportunities might come about for those looking to invest in distressed assets at this time.

As with the period after the 2008 financial crisis, some real estate businesses will fade while others will adapt and flourish. An individual firm’s ability to come out stronger on the other side of the crisis will depend on how it responds to reduced cash flows and a decline in demand for space experienced in the short-term. In the medium to long term, changes in how tenants interact with space will likely lead to changes, but the question will be how long these changes stick. Real estate investors keen to succeed, such as Razi Salih, will act quickly and smartly through the challenging times.

A Need for Change

The transition to working from home has gone smoothly for many companies, leaving executives to question the need for big office spaces. Additionally, the need to maintain physical distancing according to health regulations will require real estate investors to consider adjusting various aspects of their commercial building offerings. Landlords might be willing to be open-minded on some tenant requests, mainly because they have little alternatives. With building vacancies as high as 30 percent, some owners may also consider changing lease periods and rent calculations.

Rethinking the Future

Some commercial real estate players have started to think ahead and implement strategic review processes that aim to give insights on the potential changes looming for the entire industry post-COVID-19. Rather than rely on customer surveys and conventional economic indicators, they’re resorting to technologists, sociologists and futurists to help make sense of what the future holds. By using new and creative approaches, these real estate leaders may find predictive insights that help them prepare early.