Technology’s Critical Role in Commercial Real Estate During COVID-19
The global pandemic of 2020 has left its mark on almost every market and industry imaginable. While industrial real estate in Vancouver and the Lower Mainland is experiencing troubles of its own during this time, it hasn’t all been bad news. All things considered, the sector seems to be weathering the storm relatively well.
Consider the demand for warehousing and other industrial spaces. For a long time, supply chains in our economy have modeled a “just-in-time” inventory approach. In an attempt to minimize inventory costs, businesses only received and shelved as many goods as was needed to meet short-term demand.
With consumers rapidly scampering onto online platforms over the past few months and buying in bulk more than ever before, more companies recognize the need to hold enough inventory so they can meet the highest possible demand. As a result, industrial space occupation is on the uptick as businesses search for locations to store their wares.
Vancouver’s office market is experiencing similar stability. One reason is that the city is a well-known tech industry hub. As this sector grows, and as Vancouver remains one of the most affordable places to operate tech companies (compared to the US), the demand for office space in the Downtown area will only continue to rise. In our office market report, “[we] predict that tech companies will continue to place a portion of their operations here [because] particularly in Vancouver, we see an employment environment with lower than average wages, the benefit of a favourable Canadian dollar.”
What do these two examples have in common? Technology.
According to experts at Deloitte, new technology adaptation is not only critical for the survival of companies in the commercial real estate (CRE) sector; it will enable them to emerge from the pandemic even stronger.
For example, as online demand soars warehouses and distribution centers must continually streamline their processes to fulfill orders briskly. Furthermore, with general caution and restrictions surrounding visits to physical spaces, innovative digital resources are necessary to attract and engage potential tenants from remote locations.
Given the volatile state of things, all CRE companies require access to real-time data that will allow them to make informed decisions; this will also require robust digital strategies.
While Vancouver’s industrial real estate market entered COVID-19 on a more solid foundation than most, the industry must continue to look for ways to remain healthy and forge ahead; technology has and will continue to play a significant role in aiding the sector amid the pandemic.
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