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Factors That Affect Commercial Real Estate Market Value

Published on October 18th, 2021

The commercial real estate market, just like any other market, ebbs and flows over time. Each year, there are many different factors that affect what types of properties are and aren’t in demand, costs, risks, rewards, and more. With many vital factors playing a role in the market each year and several different property types, what are some factors that are currently or perpetually affecting the market?

Increased Working From Home

Since the pandemic started, many companies have successfully had their employees working from home instead of coming into the office. As restrictions ease, some companies are still reluctant to mandate employees to go back to work, with many doing hybrid options or having it be completely optional. This equates to less of a need for office buildings in the current state.

Supply and Demand

The concept of supply and demand is something that will always affect the CRE housing market. If the demand for commercial real estate property is higher than the supply, then property value prices will increase, and vice versa. This is directly affected by the pandemic, as stated before, because there is not as much demand for office spaces as there used to be.

Technology and Amenities

Smart technology and innovative working spaces are in extremely high demand. Companies and employees look for advanced functionality of workplaces that seem appealing. Buildings that don’t have innovative working spaces, recent renovations, or technological capabilities are not as relevant or desired in the real estate market.

Value-Add Potential

If a piece of property is not up to date but has the potential and ability to be renovated to be more desired, then it certainly has more value. For example, if it’s in a highly desired location, has supreme property management, has creative leasing strategies, or some other potential, it will be valued higher by potential buyers. If they see that with a little bit of work and updates the property can be highly sought-after, they’ll see it as a more worthy investment.

Contact Us Today

There are a lot of different considerations that go into what properties are and aren’t valuable. It’s important to consider how the market is affected differently each day by different factors, and how they constantly change with changing economic and social conditions. Working with a real estate professional from Frontline Real Estate Partners can help you figure out when to invest, what to invest in, what your goals are, and more.

If you’re looking for commercial real estate for lease in Chicago, look no further. Call us today to speak to an experienced representative!

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Frontline Real Estate Partners, LLC

477 Elm Place
Highland Park, IL 60035

info@frontlinerepartners.com
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(847) 780-8065

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