The 2020 COVID-19 pandemic fundamentally changed real estate around the country, including in Chicago. Changed doesn’t mean ruined or destroyed, though, it simply means that the Chicago business landscape looks very different in 2021 than it did in 2019. That is why it is important to know there five things about Chicago business real estate this year.
1. Outdoor space is crucial
One of the ways that the pandemic changed the way people think about commercial space the most is with the focus on outdoor space. Businesses, especially in the hospitality industry, that had outdoor space in 2020 survived and even thrived in ways that businesses that were confined between four walls didn’t.
The issues around the pandemic are still lingering and who knows what happens in the future. Even if there isn’t a similar situation, the flexibility business owners saw that an outdoor space gives establishments is undeniable.
In the past, having outdoor space for a Chicago business was nice, but in a climate where it is cold (and windy) for a good chunk of the year, it certainly wasn’t a priority.
Now, there is hot competition among the best commercial real estate brokers in Chicago for locations with outdoor space included. These places are currently the gold standard of city-based business real estate.
2. Square footage is also a top concern
This is another trend that shifted massively thanks to the pandemic. Prior to early 2020, the trend in commercial real estate was to go smaller and smaller. With more and more business in almost every industry going online, the demand for physical space just wasn’t what it used to be.
Then, just like with outdoor space, businesses with an abundance of indoor square footage found they had a lot more flexibility than businesses in cramped quarters. It allowed for proper social distancing to keep both employees and clientele safe.
As Chicagoans get back to their regular live post-pandemic, there is a shift where people are tired of shopping (and doing everything else) online. They want to go out and walk into a place to eat, shop or do something. This is why square footage in commercial real estate is so hot right now.
3. The way Chicagoans work is changing
At the end of 2020, there was a lot of doom and good when it came to commercial office real estate. Had the pandemic changed work forever? Would anyone ever come back to an office? What will we do with all this Chicago office space?
The way people work has been fundamentally altered by the pandemic but it’s not as bleak as many predicted. Yes, it may be taking a little longer than some thought to get back to the office, but people are coming back at the end of 2021 and definitely in 2022.
And yes, the days of an entire organization work 9 to 5, five days a week in the same office may not be coming back, but the fundamental reality that companies need office space is still intact.
Companies need office space because, as successful as working from home was for many, it didn’t work for everyone on a professional or personal level. Many employees want to come back, and employers want them back.
One of the big differences from a commercial real estate perspective is that some companies may want less space, but others want the same or even more space, it just has to be flexible space. Flexible space allows offices to create social distance if needed again so they’re not blindsided by another health crisis. It also offers the ability to do different things like entrain clients on-site or put in a health center to entice employees to come in more often.
4. The keyword in commercial real estate is “green,” and not because of money
Reducing carbon footprints and being better corporate citizens are important initiatives for corporations in 2021. The whole world is realizing how important the environment is and what a huge role businesses have in trying to keep it safe.
This is why, as companies shift their plans for office space and look for new places to call home, how green a building is will play an enormous factor in its attractiveness to potential buyers and tenants.
From a corporate culture, public relations, and often tax incentive perspective, being as eco-friendly as possible is very rewarding for businesses these days. For commercial real estate working with green buildings, the competition should be fierce. For those advising owners how to optimize their space to draw the most interest, nudging them to make investments to make their properties greener will pay off for the owners and for the agent.
5. Now is a great time to invest in Downtown Chicago
For years, the value of commercial real estate in the heart of Chicago went up and up and up. Now, thanks to the global pandemic, that trend has either flattened or reversed slightly in the last year-plus.
That doesn’t mean that now is the time to shy away from the Windy City, though. It means it is time to lean in. Chicago is a city that knows how to build back better. It is a city literally built on that notion after the Great Chicago Fire of 1871.
Now is time to strike when the iron is cooler than usual on the Chicago real estate front. The trends brought on by the pandemic will change the face of Chicago, but there is no chance it kills the city for good. While urbanites and downtown businesses may be looking toward the suburbs or smaller cities, those in the know understand that Chicago will be back and better than ever soon, so now is the time to invest.
The year in Chicago real commercial real estate might now look like most predicted at the end of 2019, but it is nowhere near as bleak a picture as most thought during the darkest days of 2020. Business is coming back to Chicago and the commercial real estate businesses and agents will help lead the way in 2021, into 2022, and beyond.