With almost 40% of Canadians currently working from home during COVID-19, there is no doubt it will have a serious effect on the future of commercial buildings, retail and office space. How many people will continue to work remotely instead of returning to the office? Will we see many businesses not extending their leases once they expire?
Increase in Industrial Space
There will likely be an increase in e-commerce use post COVID-19, as people get more comfortable with the idea of delivering everything from groceries, to pre-made meals, to items for the home.
As e-commerce continues to gain popularity as a result of the virus, more warehouse industrial space will be required to house inventory. A shift towards online shopping means also having more inventory to prepare for possible disruption to the supply chain in the future. These changes will also lead to increased warehouse needs in smaller centres in order to fulfill consumer demand for next day or even same day shipping.
Flexible Working Space
Tenants, employees and guests will want to feel safe in commercial buildings. Hygiene and wellness will be a top priority, which will pressure existing commercial spaces to rethink their design. Buildings that highlight good ventilation and air filtering processes will be sought after.
Open concept office floorplans with cubicles will be an issue since co-workers are in close proximity to one another. This could lead to a new way of thinking about office space, finding a balance between private offices and open spaces that aren’t cramped. There will also likely be pressure on landlords to become more flexible with rental terms and collection models.
Trouble for Small Businesses
Social distancing and lockdown orders have limited the ability for many smaller retail stores and restaurants to be able to operate. Even as small retail spaces begin to re-open, they have to limit the number of customers allowed in their store at any one time. In order to reduce dependency on labour, there could be an increased reliance on digital technology. Chatbots and in-store touch screens could be used for customer interaction and to help limit the number of employees needed to work in a store.
In addition to store traffic that is reduced by operating at a lower capacity, small businesses have also lost the professionals who would usually visit during their work day. If work from home orders continue, this could have negative implications on small businesses and restaurants that are located in core commercial districts. It could also mean an increase in traffic for small businesses that are located in the suburbs.
For insight into the difficulties of re-opening a restaurant in the midst of a pandemic, check out local Calgary restaurant, Prairie Dog Brewing’s, blog post.
The brokers at Fuse Insurance are experts in the real estate industry and are knowledgeable in recognizing and reducing exposures to property risk. Commercial property insurance is one of the most critical investments you can make to ensure the financial stability of your business. To get started on your quote today, contact us at 1-866-387-FUSE (3873) or visit our commercial real estate page.
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