The sharing economy is shifting needs and desires. And this proliferates along industries.
The invasion of technology in real estate has unveiled a whole new world of possibilities and disrupted the traditional way of using real estate. The new trends are all related to “co-something”:
1) Multifamily: Co-living
2) Office: Co-working
3) Hospitality: Co-hosting
4) Industrial: Co-warehouse
The taste of sharing brought us Uber with car sharing, Airbnb with dwelling sharing when travelling, WeWork with working space sharing, and Common with shared living spaces. Also, Flexe with industrial spaces sharing and Storefront with retail sharing. And the implications for real estate are enormous.
Prices for residential properties have raised
In popular tourist destinations, attracting rental dwellings to short time rentals on sharing principles affects long term residents. And increases their cost of life, as this practice adds to housing crises, reduces offer and consequently long-term rent cost grows.
Shared offices save costs and space
Globalization has become reality for worldwide entrepreneurs and small businesses. Startups can now consider expanding globally thanks to shared office spaces and co-working. Serviced offices are gaining popularity, as they come fully furnished and with an array of available services. It’s an option that allows to control and cut costs, which is particularly important in start up phase.
Even if sharing principles have been embraced primarily by freelancers and small businesses, corporations are joining in. More frequently they choose outsourced serviced and furnished offices rather than renting their own. Trending industries companies, such as those in technology or media, find more efficient and cheaper to employ co-working spaces.
Finally, all reduces to resources optimization. Currently when renting an office building, it is not used 24/7 and obviously the space is not used at its full capacity; this situation has to change.
Practices of sharing economy may have a negative impact on the demand of office spaces. Preferring flexible, fully equipped working spaces that are shared, may reduce the need of classical office spaces.
Shared warehousing maximizes space efficiency
Taking into consideration that warehousing sector experiences peaks and lows several times a year, measures to cover short term seasonal fluctuations are very welcomed. Nowadays commercial real estate technology permits warehousing sharing, through software based sharing solutions, for not used or underused warehouse capacity at a certain moment.
Specialized platforms bring together and put exceeding short time capacities at the disposal of other enterprises, that need temporarily space for their inventory.
Shared economy offers diversification to real estate investors
Shared economy has implications for real estate investors also, but more like a portfolio diversification. When investing in real estate development entities, investors should closely check on the portfolio they have to manage and be opened to new trends. Now the trends are suggesting shared offices and accommodation will gain momentum. Thus, new opportunities are showing, and investors should consider them accordingly.
Change is inevitable and is the only constant in our lives, shared economy has lots of immixtures in real estate, if they can be correctly implemented. And promises more flexibility, cost efficiency and investment diversification. It’s just a matter of time of how far and fast things will evolve in a foreseen horizon.
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