How Investors Should Start Strategizing for the Future

No doubt, the pandemic will catalyze changes for the commercial real estate market, and that is where investors should start when thinking about future investment strategy. Mike Sebastian of Appfolio expects the pandemic will accelerate the ecommerce online shopping trend, creating more demand for warehouse and distribution facilities. Retail, on the other hand, has become a question mark with the prospect of long-term social distancing standards that could become part of our culture.

“Pre-COVID-19, e-commerce sales were already making history; last year, e-commerce sales surpassed ten percent of total retail sales for the first time. Today, every retailer is asking themselves how the global pandemic will have an impact on their retail businesses,” Sebastian, industry principal of investment management at Appfolio, tells GlobeSt.com. “Right now, as investors are making decisions in the wake of a pandemic, the most important takeaway is to focus on the future; e-commerce was already rapidly growing and the need for industrial space was already present. This pandemic only has expedited those needs.”

Investors—particularly those already active in this space—are already looking acutely at how real estate around shopping and consumer spending will change following the pandemic. The answer has led many to industrial. “Many investors are thinking about the increased need for domestic manufacturing and industrial space; warehouses, shipping centers and logistics centers as we may see an increased demand for these property types,” says Sebastian. “We may see an increased investment in last-mile warehouse space to accommodate the increased need for goods and same-day delivery that retailers will require to house the supply they need to meet future demand.”