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Commercial real estate (CRE) has been struggling as so many people have been working from home during the pandemic. However, it seems most commercial real estate investors are not stressing too much, knowing that large societal changes happen and many businesses tend to evolve and find a way to come out of it successfully.

It’s important to note, though, that the changes over the course of the last year have been on a grand scale, and distresses are still to come along with an economic fallout. Companies utilizing remote workers or some sort of hybrid work schedule have found success with this model. This trend is likely here to stay and companies will begin reducing the size of their office space. If the demand for office space decreases, commercial real estate investors will have to lower their rent, and then they will make less money.

If tenants of commercial office spaces have the upper hand with low demand, they will have greater flexibility in lease negotiations. They can ask for shorter leases, which can complicate many aspects of the investment for the landlord.

With so many unexpected changes over the last year, many businesses and mobile employees decided to relocate. Many people decided to move from more urban areas to suburbs and vice versa, from higher-taxed areas to lower-taxed areas, or for many other reasons. These moves leave landlords in difficult situations as companies lose employees or even completely go out of business.

It will be essential for businesses to return to office spaces in order for commercial real estate investors to not face extremely distressing situations. Office spaces are the type of property that is most susceptible to changes in work or office styles, so investors in these spaces will have to adjust and find other uses for these spaces if businesses do not begin returning to them soon. Investors who stay up-to-date on current trends in the market will have an easier time figuring out how to navigate this time in order to position themselves to survive the changes. Commercial properties can fail anytime investors or owners quit paying attention to how the space is really needed. Finding out how people can best use the space will give investors an advantage.