Commercial real estate investing is a notoriously tricky industry because it changes so often; traditionally, if you didn’t have the money to spend on taking big risks (and possibly big losses), investing in commercial properties wasn’t an option.
Despite so many industry changes that have made the process more laborious for investors, there are just as many changes that have positively impacted everything from how people are buying commercial real estate to how property owners are interacting with their tenants, and even changes that apply to the process of getting commercial real estate loans and financing options.
So what exactly are these changes, and why do they matter to someone interested in commercial real estate investing? To be honest, the list is probably endless — but here are just a few things that industry experts have been talking about:
- More Millennials are investing. This is significant because it’s changing the way technology is used for communication; additionally, younger investors are more likely to take bigger risks, some of which fail miserably, but some of which really succeed and open up the market for more investors and opportunities.
- Big data has become an integral part of the commercial real estate investing industry. Big data allows potential buyers to assess whether a property will provide a good ROI in the next few years or not. It has allowed property owners to manage tenant feedback and building problems, and it helps owners figure out whether or not a potential tenant is a good fit for the property. The limits of how big data can be used are dependent on how many ways someone can analyze it efficiently.
- First-time investors are growing in number thanks to better communication, sharing, and access to funding. Communication via social media has allowed for first-time investors to find help when they need it and to learn about the industry in order to make smart decisions. Traditional commercial real estate lending (through banks) isn’t as popular as it once was, in large part because it’s so easy to find other legitimate lenders online that provide just as much security (and even more convenience) as a bank — in fact, there are currently about 35 commercial mortgage-backed securities (CMBS) lenders in the U.S. today.
These factors (and plenty of others) combine to create a striking trend: the U.S. commercial real estate investing market is stronger than it’s been since the economy crashed — in spite of a weaker global market — and more new investors are getting involved than ever before.