As the commercial real estate brokerage industry looks to 2021, we all feel a bit of anxiety on behalf of our clients and communities whose lives and businesses continue to be impacted by the COVID-19 pandemic. Despite the unknown road ahead, most CRE brokerage practitioners remain cautiously optimistic.
Now’s the time to generate business by analyzing your markets for new client opportunities. Where there are distressed assets, there are opportunities, and, if the capital markets stay intact, we are mostly bullish on 2021 given the latest developments on the fight against COVID.
As a CENTURY 21® brand advocate, creating business and finding opportunities for our commercial real estate brokerage team begins with having access to more than 1,000 commercial investment network offices. We also leverage relationships with investors, developers, and brokerage practitioners in MSA, secondary, and tertiary markets. It is the CENTURY 21 Scheetz market knowledge that makes our division successful in representing clients, specifically when investors are competing for assets and attempting to determine the disposition of real estate.
In the Indianapolis market, we continue to see activity in all commercial sectors—especially industrial, warehouse, and logistics. Nearly 70% of the US population is within a day’s drive of Indianapolis. Six major highways intersect our metropolis, creating what we call “The Crossroads of America.” Indianapolis serves as one of the primary distribution hubs for both domestic and international business. Our brokers currently have client requirements for properties ranging from smaller flex opportunities to the purchase or development of large industrial space products.
Development land continues to be another investment opportunity as well. Our brokers have closed on approximately 500 acres of development property this past quarter alone.
Why residential is a source for commercial business
Another often untapped area that drives growth for us in this sector is leveraging our residential agents for commercial referrals. We work closely with these agents so they can help determine whether a commercial referral is viable and beneficial to both them and the commercial broker. In the past 36 months, the quality of commercial referrals continues to improve with a third of our commercial business generated from residential referrals.
For those investors with underperforming real estate assets, specifically retail, restaurant or hotel properties, some may look to repurpose those properties. For example, we have hotel clients that are looking to convert properties to assisted living facilities and/or multifamily developments. Retail center investors may repurpose their properties for medical office use or self-storage, depending on the specific attributes of properties along with the demand and approved uses for such real estate.
Looking ahead, we anticipate that commercial brokerage practitioners can remain optimistic for 2021 so long as the fundamentals of low-interest rate capital markets continue to provide the funding. The demand curve will be affected by the term required to re-tenant and reopen many of these properties along with changes in use requirements, such as office use, that will influence that dynamic.
But one thing we do know is that we will get through this time and clients and investors will continue to need us to help guide their commercial real estate journeys.