The only thing constant in the commercial real estate industry is change. That’s the case more so now than ever, as the pandemic changed the way people work, live, and shop. Centralized office spaces, once a prime real estate target, are making way for private and rentable office spaces. More people are working from home, and they want to remain socially distant from their coworkers and fellow consumers.
A Shift in Commercial Real Estate Trends
With consumers heading online to shop rather than at big box stores, there has also been a shift in retail real estate. There is still, and always will be, a need for essential services. However, where and how consumers receive those services was shaken up in 2020. For example, people will always need to get a haircut, but they would prefer to visit a stylist in a private space rather than go to an open salon with other customers. They are also less likely to walk by a salon in a mall than in the past, and they are often drawn to stylists through word of mouth. Now, salon suites and semi-absentee franchises are making waves in the real estate arena.
Commercial Real Estate Trends for 2021
Entrepreneurs looking to enter the commercial real estate market are navigating a different climate this year. Commercial real estate caters to families and working professionals who are staying home. Big box stores and commercial office spaces are bowing down to online shoppers and workers who want to remain in a private space. Businesses that provide essential services, like hair salons, remain essential. However, where they are located and how they deliver those services is changing. Here are the top commercial real estate trends shaping 2021:
1. Salon Suites
After 2020, most people don’t want to stay at home all the time, but the need to practice social distancing still exists. This has influenced the way consumers shop and professionals work. When shoppers visit their favorite stores, they need room to keep a safe distance from fellow shoppers. However, this is extremely evident when it comes to places that offer essential services — like hair salons.
Visitors are less likely to go into a hair salon that is packed with other customers. They also are not passing by walk-in salons in once-busy shopping centers. Now, customers are visiting new stylists based on word of mouth, and they are only visiting salons in which they feel safe.
This is one reason why salon suites, like MY SALON Suite, are one of the commercial real estate trends of 2021. At MY SALON Suite, stylists operate their own private salons. Clients are separated, and they only interact with their individual stylists. More clients are seeking out ways to get their hair cut in a private setting, but they still prefer to go to the salon over having a stylist visit them at home. MY SALON Suite allows stylists and their clients to safely continue offering and receiving essential haircare services.
2. Smart Amenities
Smart amenities, innovative technology, and fully integrated systems entice apartment renters, and now they are growing in popularity among business owners. In the Forbes article, 14 Big Factors Driving Commercial Real Estate Trends This Year, Marshall Friday, a member of the Forbes Real Estate Council from ADT Security Services, says the adoption of technology will drive smart amenities from the “nice-to-have” column to the “need-to-have” column. This was already happening before COVID-19, but there should be a strong increase over the next two years.
MY SALON Suite is ahead of the curve when it comes to offering smart amenities to its tenants. Every salon has 24/7 security, with double-door, buzzer-controlled entry, and motion-controlled lights. Each suite is fitted with high-end equipment, state-of-the-art stations, and Wi-Fi.
3. Property Maintenance as a Priority
Consumers expect businesses and retail spaces to be spotless, and the appearance of real estate takes top priority. As was the case in the past, commercial real estate needs to be aesthetically pleasing. However, it is no longer just about a space’s appearance. Now, consumers are paying attention to cleanliness, and property maintenance is at the forefront of everyone’s minds. As Marc Shiffman with SMS Assist explains, companies will need to increase their investment in facilities maintenance as it becomes integral to brand experience.
4. Less Demand for Commercial Office Space
Your house is the new commercial office space. While commercial office space was always a prime real estate investment, that idea has shifted along with the changing work environment. Businesses are seeing that their employees can work from home just as easily as in the office. While many companies may eventually go back to the traditional setup, now office space is less of a priority for others. Chris Bounds with reHacking/Bounds Realty Group by eXp Realty explains that many businesses will find that they can operate just as well without the overhead costs associated with owning or leasing a physical office.
With that in mind, commercial real estate investors will want to focus less on large office complexes and more on real estate that offers private, individual spaces. This may be in the form of office suites, where people can have that work-from-home feel while leaving the place where they live behind for the day. It may also come in the form of business suite concepts, like MY SALON Suite.
5. High Demand for Essential Businesses
Consumers are now more aware of what they can do from home and online — and what services they need to do in person. Even some essential services that can be done through home delivery are still enticing consumers to leave their homes — like grocery shopping. According to Kyle McCollum with Trinity Real Estate Investment Services, there is a high demand for businesses like grocery stores, auto service shops, pharmacies, and medical companies.
Other businesses that continue to thrive are hair salons, fast food restaurants with drive-thru lanes, and warehouse and shipping businesses. These businesses offer a stable cash flow and quality tenants, so essential businesses remain one of the top commercial real estate trends of 2021.
The Right Time for Salon Suites Ownership
MY SALON Suite exemplifies the commercial real estate trends shaping 2021. From providing an essential service to offering private space to both tenants and their customers, MY SALON Suite is a great investment for semi-absentee franchise owners.
If you’re interested in joining our successful family and owning a MY SALON Suite location, click here to request franchise information.