Here's To 2023
For building management professionals involved in commercial real estate, the last few years have been a wild ride. Virtually all asset classes have had very interesting stories to tell. Whether it be a major shift in the office mind-set, to industrial and distribution centers having a renaissance moment, or the unbelievably low vacancy rates in apartments. We know that as building professionals, it’s important to understand the impact an uncertain economy brings to your properties and business. So here some thoughts on Improving Commercial Building Management in 2023. Each property type have layers of complexity that will decide how they perform in the coming months.
Office
Perhaps none more interesting is what is going to happen to the modern office space. With full-time in person workplaces becoming obsolete, office professionals must get a hold of this new hybrid model. Economist are saying that there is a glut of vacancies on the market now, and more is coming. This may sound a little doom and gloom, but the commercial real estate sector has always had a high level of ingenuity. There is no doubt that some companies will rise to the top and create unique experiences and revolutionize what we thought possible in this class. Some ideas may include less cubicles and more open spaces so employees can better communicate and take advantage of the social aspects of coming into the office part-time.
Apartments & Industrial
The next interesting performers would be, of course, multifamily, and industrial properties. Both asset classes have been on a roll these last few years. The pandemic brought on the need for stuff (thanks Amazon), and hence large distribution centers everywhere! And (thanks high home values), the need for more apartments has never been higher. In 2023, there is bound to be some contraction due to inflation and other external influences. Amazon is already shedding some of its workforce and apartment rental rates appear to be stabilizing. However, with Millennials and Gen Zers coming into the rental marketplace, and our need for more STUFF not abating, both classes seem to be in good shape for now
So What Does This Mean?
From a building management professional perspective, there’s going to be many changes in the marketplace, but also lots of opportunities to improve your processes and enhance client experiences. Let’s look at a few items you can expect to see on the horizon.
1. As Conex Property likes to keep our finger on the pulse of the commercial contracting world, here’s what we are learning. As per many discussions, the price of materials is starting to come down and the supply chain issues are easing. This means the cost of your projects should be going down too, as compared to the previous few years. Because of this, talk to your vendors and get their feedback. You should start seeing these changes reflect on your upcoming building projects.
2. Even though Apartment sale transactions are going down and it’s more of a buyers’ market, amenities are going to be highly desired in 2023. These are often differentiators for tenants to decide to rent one place over another. Start taking inventory of your current spaces, as well as research what your competing properties are offering. Perhaps you can redesign some of your community spaces, or even add an EV charging. EV’s are everywhere now! Or add a simple library area with some good books.
In Closing...
There are still going to be many unknowns entering 2023. But as a building management professional, you are on the forefront of this exciting industry. Improving commercial building management in 2023 is a topic we’ll discuss more of. We here at Connex Property recommend staying nimble and continuously work on creating value for your tenants and shareholder partners.