Last time, I wrote about the post-pandemic future of commercial real estate. With more and more folks getting vaccinated or otherwise immunized, it seems we’re finally in the ‘red zone’ (to use more football parlance). Even before we push COVID-19 into the end zone, everyone agrees that commercial real estate has changed—perhaps forever. Property owners and landlords must be prepared for those changes.
On the retail and restaurant fronts, I noted that franchisees might become hot tenants as historic access to real estate has created an environment extremely favorable to franchise growth. And shifting social and cultural norms are creating opportunities for new concepts to expand quickly in the months and years to come.
Since the last post, we have indeed seen an uptick in new concepts and other first-time franchises coming onto the local scene. For example, Sedona Taphouse is launching a new NAPA Kitchen and Wine concept in RVA. In nearby Williamsburg, the Economic Development Authority has gotten in on the act, welcoming Broken Egg Cafe, the national chain’s first Virginia franchise.
But what about the future of office space? For that, it’s impossible to ignore Amazon’s new headquarters in Northern Virginia. The space will focus on bringing people together. Amazon’s design is part of a trend to rethink the office as more than a space for your desk. “Heads-down” work, Inc. magazine predicts, will take place offsite, instead of in the office. More employees will work from home and come into the office for meetings, mentorship, connection, and learning from peers.
Like it or not, Amazon seems to lead the league in a lot of categories. Keeping an eye on what drives it and other large, established companies could help predict the future of office space locally. To keep commercial real estate relevant, people-centric design should be top-of-mind when owners consider how they or their tenants can use office space for the hybrid workforce of the future.
As the pace of technology advances, it becomes increasingly difficult—if not impossible—to design a space that will fit a tenant’s needs for the course of a long-term lease. Landlords should be mindful of keeping space ready for the future, and make sure they are not stuck with a buildout that must be ‘undone’ at significant expense to be attractive to subsequent tenants. Perhaps more than ever, post-term considerations should be a major focus in commercial lease negotiations and renewals.
Sands Anderson remains ready to discuss the evolving market and its legal implications, and to assist with all your commercial real estate needs—now and in the future. Contact our team today.