Unlocking Potential: Strategies for Successful Commercial Real Estate Development

Construction is always a risky business, given the long-term nature of the investment and the fact that there’s no guarantee that, once the project is finished, it will get enough tenants to justify the cost, much less make a profit.

But if approached strategically, a successful commercial real estate development can quickly pay for itself, then spend decades turning a profit.

The question is: How do you ensure success when the real estate market – particularly the commercial real estate market – is going through a seismic shift?

More people are working from home and insisting on continuing to work remotely. Online shopping has forced countless retailers to either shut down or shift to selling their products online.

So, how can you make sure your commercial real estate will be a success?

While there are no guarantees, there are steps you can take to unlock the potential of your commercial real estate so it can be as successful as possible.

Location, Location, Location

While the importance of a prime location is not new, what makes for a good location for a commercial property has changed.
For example, commercial real estate developed for cafés and lunch spots to be conveniently placed near office buildings is no longer the solid investment it once was.

For those working remotely, their home has become their office, but that doesn’t mean they don’t want to go out to lunch or to grab a cup of coffee. If anything, being home all day will make them more likely to want to go out for refreshments, if only as an excuse
to get outside.

All that means is you have to understand that where people are working has shifted, which means, depending on the commercial property you want to develop, your definition of a prime location may have shifted.

One way in which we see this playing out is the fact that crowded downtown areas are no longer the hub of commerce they used to be. As more people work from home, more of them are also moving away from the crowded and overpriced downtown areas and
moving into the suburbs to have more space and a lower cost of living.

That provides an opportunity for commercial real estate developers to prioritize suburbs over the heart of a city.

More Mixed-Use Properties

The standard has been for cafés and restaurants to go in the first floor of an office building so people could easily access them on their way to and from work.

But if they’re working from home, rather than having those venues on the first floor of an office building, it makes more sense to have them on the first floor of a building whose other floors contain apartments or condos.

We’re already seeing more of this, and the trend is likely to grow. Entertainment As much as people like working from home, they’re even more anxious to get back to in-person entertainment.

This means sports, plays, concerts, and movies are all things people are willing to travel to or live close to. So, if your commercial property development might be right for a bar, a restaurant, or another venue that pairs well with in-person entertainment, look for areas offering those things.

Choose the Right Property Management Company

Developing commercial real estate in the right way and at the right location is just the first step in making your investment successful.

Once it’s built, you need a commercial property management company to maintain the excellence of your property and keep your tenants happy.

That’s where we come in. If you want to talk about how we can help your commercial property stay profitable for years to come, we’d love to have a conversation with you.