The pandemic years have been challenging for business owners and real estate investors alike, with the majority of workers having to suddenly adapt to working from home. With many employees continuing to utilize their home offices or transitioning to a hybrid model, questions now arise as to the future of commercial real estate.
Investors may be wondering if buying commercial spaces, including office buildings, or applying for commercial construction loans would be wise this year.
There are a couple of things to consider when determining whether investing in commercial real estate is a smart move in 2021.
Which Part of 2021 Looks Good for Investing?
Overall, commercial real estate is projected to take more time to recover as the world slowly returns to pre-pandemic activity levels. During the first half of the year, additional commercial properties may continue to struggle; however, the second half of the year should see more stability.
Thanks, in part, to the successful distribution of the COVID-19 vaccine, many businesses intend to bring employees back to physical working environments during the second half of 2021, which will likely aid in the recovery of the commercial real estate market.
Which Commercial Buildings Will Survive?
While it is difficult to say for certain which buildings will present a good investment option in 2021, warehouses and distribution centers have seen a significant increase in desirability since the beginning of the pandemic.
Businesses have had to shift their sales from brick and mortar to predominantly e-commerce, requiring additional storage space and brand new distribution centers.
Other commercial buildings, such as hotels and office spaces, may face a slower path to recovery. Once again, however, these businesses will likely see an increase in value during the second half of 2021 as employees return to in-person work and travel resumes as normal.
Preparing to Invest
As with any financial undertaking, you will want to thoroughly research your market and area before committing to an expensive project.
Commercial property values vary substantially depending on geographic location and other factors unique to your area. If you decide it is the right time to invest in your property, Pinetree Financial may be able to help.
We offer construction loans, bridge loans, hard money loans in Denver, Colorado, and special project loans all over the state of Colorado. Contact us today to see how we can help you start your next project.