Developers and investors across California may be trying to figure out where to go from here. These remain uncertain times and the future of commercial real estate remains in flux. Some say that certain types of property could help save the commercial market.
For instance, neighborhood retail centers could prove more viable and profitable than larger, big box retail-type locations. These smaller shopping centers could have anchors such as drug stores, grocery stores, daily conveniences and/or restaurants. Other, smaller shops could then round out the tenants. Because of the smaller sizes, it may be easier to maintain a high level of variety and occupancy.
Many people are also looking for smaller apartments, called micro-apartments. They are generally somewhere between 200 and 400 square feet. It seems as though more people want to spend their time and money on experiences instead of where they live. For this reason, they want smaller, and less expensive, places to live with a multitude of amenities and less responsibility for upkeep.
Considering the housing shortage here in California, this may be a way to help alleviate that problem. Property owners also benefit from more rental units bringing in more money. They can also justify a certain amount of rent due to the amenities offered by the property.
The trend seems to be moving to smaller, more functional properties when it comes to commercial real estate. Of course, there are still people who will want larger homes and who will still frequent larger shopping centers and big box retail stores. However, in order to keep the current circumstances everyone is living under from causing too many losses for property owners, developers and investors, changing direction in order to meet the needs of the end users will need to continue to happen.