Top 3 Commercial Real Estate Trends for 2019

December 28, 2018

As the new year approaches, commercial real estate industry execs, researchers and influencers expect several trends to dominate in the coming year. From online retailers breaking into brick-and-mortar to the rise of opportunity zones, here are the top trends IRC expects for 2019:

1. Opportunity Zone Programs Will Continue to Rise

On December 12, President Trump signed an executive order that directs resources to help local governments and businesses within the 8,700 designated opportunity zones. Along with directing resources, the order is designed to improve infrastructure, crime prevention and small business lending.

There are 24 Opportunity Zones within San Antonio/Bexar area, the second highest in Texas. With upcoming incentives and investors wanting to jump in, the low-income areas of the Alamo City could see redevelopment projects within the near future.

2. E-Commerce Players Will Continue to Drive the Industrial Boom

Demand for industrial space will continue to rise as brick-and-mortar retailers break into the online sector. CBRE’s 2019 Outlook report shows high expectations for Industrial real estate as net absorption from e-commerce currently sits between an average of 75M SF and 94M SF, according to the report.

With over 55 Industrial buildings for sale ranging from at least 5,000 square feet, San Antonio has plenty of opportunity for large e-commerce players looking to house their product for shipment.

3. Online Retailers to Continue Opening Brick-and-Mortar Stores

Brick-and-Mortar has gone through a rough patch these last several years. With malls closing and casualties of popular brands like Sears, RadioShack and Toys “R” US, it was easy to believe that retail was dying. However, the year 2018 saw stabilization within the retail industry as companies began to understand the value of maintaining an online store. No longer just a channel for brick-and-mortar, retail has shifted online and stores have figured out how to adjust to this omnichannel approach. With both a store online and down the street, retailers now have a chance to compete with Amazon.

Now that the stabilization of 2018 has taken place, retailers have also begun to see the value of their real estate. According to CBRE Head of Global Retail Research Melina Cordero, retailers shouldn’t just close up shop.

“They can’t just close a store and rely on online, they really need the store for profit margins, customer attention, customer acquisition, for lots of reasons. I think we’re going to see a lot of reinvesting in the store and a lot of reinvesting in strategies to try to get people into the store,” Cordero said.

With opportunity zones on the rise, industrial space in high demand and retail making a return, 2019 will be off to a great start for San Antonio and the surrounding commercial real estate markets.