The year 2020 has recorded a decline in the value of the real estate industry for the first time in two decades. This drop is due to the shift towards remote working by various companies in the USA. These efforts towards curbing the spread of the Coronavirus, are predicted, to last for the whole year.
Does this mean that investors should give up on corporate building investment? Not really, since office-based work is bound to resume soon. Soon people will miss the convenience of face to face board meetings and brainstorming. Furthermore, the home environment is not appropriate for work for most people. There are plenty of distractions from children and other sources that would be non-existent at an office.
Off course, the above mentioned possible reasons for the resumption of working from the office are all hypotheses. There are indicators that the post-pandemic corporate building investment might experience a boom. Some of the possible reasons for these are:
Need for Expansion
The social distancing guidelines might force firms to expand their working spaces. Investors will benefit from issuing more leases to companies. For every company that will terminate its contract, another will buy. The tiny office spaces that people complain about will disappear.
The real estate industry enjoys unfavourable advantages compared to other businesses. The most extraordinary benefit is the ability of the real estate to be involved in all enterprises. In the Post-Pandemic period, the industry will require more investors to satisfy space expansions in all sectors of the economy. The industry accommodated the top 1%in society; it will welcome all capable Individuals in the post-pandemic period. Increased investors will naturally translate to the increased value of the real estate industry in the stock market.
In summary, the most lucrative business of modern industry, real estate, has been dealt a blow due to the pandemic. Fortunately, there are indicators that the industry might, after all, enjoy a steady boom in the post-pandemic period.
The industry of real estate is going to be more valuable than ever before. On top of the pre-existing demands in real estate, the need for Expansion will propel the industry to uncharted heights. Investors should be on high alert for this golden opportunity. However, all of this is just speculation we will have to wait and see as events unfold.