Technology has the potential to streamline our entire lives. Today’s tech can lend a hand in solving our problems, handling everything from day-to-day tasks or complex issues.
Transportation is a fundamental aspect of any metropolitan plan. Getting people to and from their destinations is a primary concern for cities, where accessibility and smart planning are keys to success.
In many of the greatest cityscapes, driving on busy roads is not always the best way to move around.
Transportation plays a major role in the commercial real estate business – specifically in the office and multifamily sectors. Let’s explore the connections between transportation systems and the commercial arena.
Transit: Pro or Con for Office and Multifamily?
Transit is a key benefit for any office or multifamily asset. People need to be able to easily get to and from the workplace, and multifamily tenants are looking to live in a centralized location that offers convenient transport networks.
On the flip side, transit can be a big drawback for office and multifamily when not properly planned. Even the greatest office buildings or multifamily properties will take a hit if they’re not located in a strategic area – specifically, one with ample public transportation options.
As we can see, transit-based planning is required to optimize a multifamily or office space.
Transit is a Major Point of Asset Desirability
A large part of creating an attractive CRE asset is thinking about the greater surrounding area. Investors and developers need to consider how team members, tenants, and clients will be able to move around the asset.
Contemporary multifamily tenants want to feel mobile, well-connected and integrated into the rest of the world. Multifamily properties that have a convenient public transportation system nearby can mobilize this as an advertising point, which will boost resident appeal while also establishing a competitive advantage.
To the same effect, offices that are within a reasonable distance to transit systems are more likely to attract business and talented team members. Using this as leverage, investors and developers can market to top-tier tenants. This can help boost overall ROI and annual profitability, as reports show that commercial assets in transit districts have notably higher property values.
Transit Accessibility is a Must for CRE Investments
When it comes to investing in commercial real estate, be sure to consider how transit will impact your overall standings. While transit is often overlooked in investments, experienced investors know it can make all the difference in cultivating success.
Investors, make sure you’re performing due diligence on a potential asset’s location. When it comes to office and multifamily, it may be a good idea to gear your property shopping towards nearby transit outlets. Even if a transit-oriented property is listed at a higher price point, it’s overall ROI capacity may make it worth it.
The same thing goes for new developments. Driving your efforts towards a transit-accessible location can be a huge advantage for the asset down the line.
Don’t ignore the effects that transit has on commercial investments.
When such vast possibilities are available to us, society must decide when to draw the line. When does employing automation become too much? When does something become too easy?
This crossroads is where commercial real estate currently stands. Should the commercial real estate transaction process be made easier? As with any business, there are pros and cons to changing up the flow. This establishes a delicate balance for deciding where and how CRE employs technology in the transaction process.
Following the Convenience-Based Model
Our world is obsessed with all things easy and fast. Contemporary businesses are reconfiguring themselves to fit the newly established standards, and everything is about customization and immediacy.
We see it in healthcare as facilities adopt more comforting designs and move closer to their patients. Retail is adapting to the e-commerce module and rethinking the place of physical storefronts. Entertainment is becoming increasingly mobile and accessible. The list goes on and on.
Tech Replacing the Middle Man
Can you spot a common theme in contemporary optimization?
All of these strategies employ technology or software to get the goods straight to the consumer. Automation becomes the primary vehicle that companies use to make their services easier – and thus, more appealing.
How This Applies to Commercial Real Estate
So what would happen if commercial real estate followed this same path?
For starters, the entire process would likely become digital. From browsing the market to contacting your agent, the transaction would be conducted on the web. Although today’s CRE is extremely tech-heavy, this fully computerized system would be an entirely new ballgame.
There’s also the possibility of a CRE website platform that functioned like a mass retailer – just one with price points in the multimillion-dollar range.
This kind of one-stop-shop environment would nullify the roles of agents and brokers by simplifying the entire process. Everything would be automated and individualized through data analysis and algorithms. Employing AI servers can even act as ‘professional resources’ for answering questions in a real-time chatbox.
Benefits and Drawbacks
On one hand, making CRE easier would surely streamline the transaction process. Lengthy, complex, and hard-to-navigate are some common pain points associated with this business.
However, an easier commercial module takes away many valuable aspects of the industry. The business loses the element of expertise which provides a basis for competitive advantage. The perks of having professional connections would become a thing of the past. Specially-accessed deals and unlisted properties would no longer be available.
While these features do make the business complex, they’re also inherently human elements that may be the way you land your next best deal. While automation is always appreciated, it’s a fine line to walk.