2019 Commercial Real Estate Forecast

It’s important to stay on top of trends in Commercial Real Estate. Since we’re already 1/12th of the way done with 2019, it’s wise to look at how 2019 will look in our business.

1.Industrial Boom will continue to rise.

E-commerce is one of the fastest growing sectors. Everyone shops online, so those products must be kept in warehouses. According to Bisnow, they say “Net absorption resulting from e-commerce growth is expected to average between 75M SF and 94M SF, same as this year, according to CBRE's 2019 Outlook report, and a lack of new supply has driven vacancy levels down to 4.3%, a historic low.”

2. Commercial Property Managers will take on shared space.

Co-working spaces are a new and exciting concept. The Cauble Group works in Center 615, a co-working space in East Nashville. Co-working spaces are pretty straight forward - rented offices, group-work areas, relaxing quarters and many rent out spaces for cafes and other coffee shops for the tenants. Forbes wrote an article about this trend and the CEO of The Guarantors, Julien Bonneville, says, “Landlords who are remaining or returning to the traditional commercial office space are facing increased demand for amenities like sleek lobbies, tech services, etc. To meet these demands and gain a competitive edge, landlords are opening up to fintech/insurtech solutions like replacing security deposits with surety bonds to make tenants lives easier.”

3. Technology will distort the industry.

As you can see, we’ve been working on changing our website. Technology is one of the most important pieces of a successful business in 2019. We’ve been working on new marketing strategies and working with new items such as drones and a simple new website information hub. Technology is threatening how we work in Real Estate, but if a firm - aka The Cauble Group - accepts this and works with the technology rather than fighting the change.

4. 2.7% GDP Growth in 2019

The economy is something we all live by. Even when some people aren’t aware, the economy booming helps all of us, or will crush us if we aren’t careful. According to CBRE’s Outlook Report, it says “Momentum from strong employment and economic growth in 2018 will continue next year as consumer and business confidence remain high. The strong economy will support interest rate hikes in 2019, leading to gradual, moderate increases in long-term rates.” There’s plenty of speculation with economic forecasts, due to it constantly changing. This, however, if the forecast it true, is beautiful for Commercial Real Estate investors and sellers. When the economy grows, the more money people are willing to invest in business and places to house their business. When the economy struggles, it’s difficult to justify investing in Real Estate.

5. Retail will get a makeover.

Similar to No. 1, e-commerce is taking over the industry. Retail spaces are losing steam. Malls - such as Opry Mills and Cool Springs - are starting to lose tenants. It’s important to keep that in mind when selling retail space. Since these spaces aren’t disappearing, it could be time to look at changing the leasing process and who goes into those spaces. Putting businesses such as health and fitness providers, medical facilities, restaurants and entertainment venues in those spaces with shorter leases will provide a much better return.