Three Sectors Increasing Demand In Commercial Real Estate
December 09, 2013
As the economic recovery continues in 2014, there are three areas of the economy that will strongly impact demand in all types of real estate, both commercial and residential. I work with many clients who are either in one of these growth areas or provide professional services to them.
The Health Care industry: Already one of the largest sectors of the economy, the need for health care services and facilities will continue to increase because of the growing health care requirements of an aging population. The health insurance industry will experience growth fueled by health insurance reform. As more patients have access to care, increased usage for hospitals, clinics and other medical facilities will follow. This trend will affect not only medical complexes like hospitals but will impact other types of space as well. Emergency clinics and outpatient centers are increasingly found in retail centers and other locations outside the traditional medical complex.
The Domestic Energy Industry: The current boom in the development of natural gas reserves is having a profound effect on real estate of all types in areas where reserves have been discovered. Cities including Houston, Dallas, Denver, Pittsburg and Philadelphia are experiencing job growth and higher occupancy rates for commercial space, including retail. Residential real estate, both single and multifamily, is experiencing a surge of growth in these markets, too.
The Tech Sector: Growth in the technology sector is fueling the need for commercial space in both expected and unexpected places. The Bay area is currently experiencing a boom in commercial real estate construction and renovation that includes office, industrial, retail and hotel properties. Other locations, not typically associated with high tech companies such as Cleveland and Indianapolis, are welcoming companies in e-commerce, logistics and data warehousing. Tech is growing in all directions, from the expansion of huge international companies to ambitious startups with a handful of workers.
Typically, a booming sector creates an echo that expands opportunity for service providers ranging from legal and accounting firms to temp agencies to caterers to child care.
Have you considered how your company is currently poised to take advantage of growth opportunities in the coming year?
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