Urbanization is upon us. Millennials and Gen-X’ers are finding that life in the city is simply more attractive and convenient than their parents found life in the suburbs. And big urban metropolis are responding by forging out green space, adding more residential real estate and improving overall infrastructure.
As Millennials are now the largest generation in the workforce and the one who embraces gig work at an increased speed, corporations and SMEs alike are also forced to revise their thinking and their plans regarding the locations and types of work space they need. A lot now feel the need to accommodate both full-time staff and the growing number of contracted talent who may be physically present on occasion but not regularly.
As well, if companies have remote gig workers who are never physically present, often in other countries, then uninterrupted, secure, and top-notch digital flow must be also be priority when selecting location and internal infrastructures.
Still a 4th factor is the need to accommodate the gig worker who works entirely remotely and now is a part of the steady flow back to city life. He, too, needs workspace that is comfortable, attractive, digitally secure, and available on an as-needs basis, often 24 hours a day. An American working for an organization in France, for example, will find that the seven-hour time difference means his work schedule is quite different from the traditional 9-5 employee.
All of these factors combined clearly indicate that “times are changing” in a major way for real estate players today. According to Daniel Shaked, CEO of AI-powered property management company Home365, those involved in real estate, whether as investors, builders, renovators or managers, have big tasks ahead of them. “The market is ripe for ‘smart’ buildings and seamless management and it will only get ‘riper.’ The ability to predict and prevent events before they interrupt productivity and efficiently address them through the automation of offline processes is crucial,” he said.
Several trends in commercial real estate, in particular, will be driven by the changes in the workforce and the rapid rise of the gig economy.
1. Location becomes even more crucial than ever
It’s long been a term that resonates with real estate developers, whether for residential or commercial construction. And it is a term that resonates with any organization seeking to build or purchase existing commercial real estate. The growing gig economy will significantly impact location. Any organization contracting with more “local” gig workers and that needs them to be physically present at certain times, must be conveniently located for them. And given the urbanization of the newer, younger workforce, urban sites that are easy to get to will be a priority.
2. Coworking spaces remain in high demand
This is a relatively new commercial real estate trend, but coworking is a growing sector of this economy all over the world. Gig workers are increasingly looking into renting such spaces that accommodate their needs, provide the socialization that they crave, and offer a physically and digitally secure environment. The co-working commercial real estate sector is expected to grow about 22% annually, according to recent data. Potential for both construction and management of these work spaces is huge.
3. The role of commercial real estate firms will expand
Not only will gig workers demand seamless and secure technology, but commercial real estate players will have to make some major paradigm shifts in their thinking. Most new companies often want all of their needs to be met in a single place – they want a one-stop shop for real estate, so to speak.
Thus, commercial real estate firms that can manage customized construction and/or renovation, appraisals, renting, and closings will be in high demand. In fact, this is the reason commercial real estate consulting and management firms are realizing good growth right now. However, emerging real estate startups are coming to compete with the traditional broker. Some are building cutting-edge solution for automating appraisals that will boil down the entire process down to a few clicks. Some are letting people acquire a personal right to a souvenir plot of land. Yet others take on providing streamlined access to various amenities such as on-site events and unique activities for large residential and office facilities. Clearly, it’s only a matter of time when PropTech startups will start addressing the unique needs of gig workers. So traditional brokers need to be armed and ready to compete.
No one can fully predict how the gig economy will impact all areas of work. Suffice it to say that the concept of “work” and “workplace” is transforming at a rapid pace, creating a ripple effect throughout different industries include real estate.
