Pros and Cons of the Newest Trends in Commercial Real Estate

Just like fashion or music, trends tend to pop up in the world of commercial real estate. Whether it’s a hot area in the Southwest Loop or new developments in Old Town, these trends directly affect tenants, landlords and investors alike. Keep reading to see how trends make their mark on a city.

Pros of Trending Commercial Real Estate 

  • Typically when areas begin to become more popular and trendy, light is being shed on new areas that are ripe for development and new economic opportunities are being brought to areas that have not been well invested in. These trends also help tenants and landlords find cheaper opportunities to rent and purchase space.
  • Depending on your timing, if you notice an area is beginning to be reinvigorated, this can be a great time to make large gains on investments. It can also help long-time property owners realize large increases in property values. 
  • Trending areas can also bring about an increase in jobs, businesses and commerce to an area. 

Cons of Trending Commercial Real Estate

  • Trendy areas can begin to remove inexpensive properties and affordable areas through huge appreciation and an increase in values as more people start to make their way over. This inherently causes taxes to go up and overall creates a higher cost of living. 
  • Trendy areas usually don’t benefit people who already live in the area. The traditional inhabitants of a trending area are typically forced out due to rising costs and increases in renewal rates for tenants who originally got a good deal.
  • Late investors and tenants to the area can be buying in at the top (the most expensive price) and be left with a hard-to-lease property if the trend goes away.

Doing what’s trendy is not always the best idea for a business looking for a new commercial space. While trends might be good for the business owner, they can prove more difficult for their employees in terms of commute time, parking options, public transportation or food options. 

When considering moving your business to a trending area, keep the long-term in mind. If there’s anything we know about trends it’s that they’re fickle, so choose your office moves wisely. 

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