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How Is Commercial Real Estate Faring Under the New Normal?

For most industries, having a functional and efficient commercial space will motivate and drive most of the workforce to success. Placing your business in a critical location, such as a busy street that’s close to offices, can attract a lot of customers and potential business partnerships.

But setting up your own commercial space isn’t as easy as it sounds. It takes a reasonable degree of investment to keep your retail space going, even during times of uncertainty. That is, in addition to months of planning, designing, and ensuring that your business will stand out from other companies are just some factors that you’ll need to keep in mind.

Since the first few months of the year, there have been drastic changes in how most businesses have been operating. Commercial spaces that were once hustling and bustling with office workers, baristas, chefs, and customers now seem like ghost towns. But it’s not just commercial districts around the world have been taking the full brunt of a public health crisis; almost all types of industries have been affected by the pandemic.

One thing is for sure: when the pandemic starts dying down, we’re still going to be far from ordinary.

How Is the Commercial Space Industry Faring?

As of right now, more information on the impact of the real estate industry is still surfacing. Of course, the results will also differ depending on the country in question. For now, we’ll be focusing on the global setting.

But from what is known, the commercial real estate industry needs to do more than wait out the pandemic. In terms of how people will be behaving right after the pandemic, there will be changes. That could affect much of the industry. Since the commercial space industry is heavily reliant on how successful a particular business would be, it will need to be in a place where there is the right amount of foot traffic.

For instance, commercial working spaces will already have plans for densification and layouts. However, this could backfire when a lot of different health authorities are issuing amendments and states that will strictly limit building codes.

Even real estate that focuses on selling homes will have to make changes. It’s predicted that demand for real estate that’s for sale will be dampened in the next few years. Still, things can go both ways.

The new normal will affect several aspects of building codes, such as:

  1. Affecting HVAC standards — Most reports have shown that a particularly contagious disease is known for spreading through respiratory droplets. As such, changes will have to be made for ventilation systems and how air circulation will be done in restaurants, cafes, and other commercial establishments.
  2. Limit the number of inhabitants — In terms of transmissions, physical transmission through services is entirely possible. Therefore, strict distancing measures are implemented by authorities to mitigate any form of transmission, both physical and respiratory.

Other than commercial real estate, assisted living, and real estate for living spaces will also be affected. As most of us know, COVID-19 is known for having acute symptoms on the older generation, which might force most senior citizens who are about to enter their golden years to stay at home for a little while longer.

The demand for several commercial spaces may plummet, or the current trend as of the moment will change to meet the preferences of the public and the government.


The new normal won’t just affect the real estate industry but will be a cascade of drastic changes for other sectors as well. Just like a line of dominoes, a change in the private and public sectors can already be a catalyst for changes. Something as simple as building codes being revised to fit safety standards will affect the demand for most commercial spaces and their overall pricing.

That will boil down on a particular firm’s ability to fare well in a health crisis will depend on how they will respond to challenges and obstacles in an ever-changing industry. In particular, they will need to address the decline in cash flow in the short-term, while most businesses will have an increasing demand for space. Aside from that, there’s looming uncertainty of the ability of most tenants to pay bills, especially when most industries have been plummeting as well.

Ultimately, an important question remains: which of these changes will become a standard in the industry? The future is still uncertain, but it faring through this storm is still quite possible with the right preparations and planning.

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