What Can Commercial Property Owners Expect in 2023?
Our predictions for the year ahead as the property market continues to evolve.
At TouchSource, we’re engaging constantly in conversations with property owners and managers across North America. These conversations about their goals have shed light on how commercial buildings are increasingly focused on delivering high quality spaces. And, that properties and their districts are going through a period of reinvention.
Every year, we review how our customers are being impacted by the economy and overall market trends. We turn our sights to the coming year. Of course, we never know exactly how the year will shake out — after all, we don’t have a crystal ball. But here are our predictions for what lies ahead for commercial properties in 2023.
1. Class A Buildings Will Continue to Win
We learned a lot from COVID and about the way spaces are being used. When the pandemic set in and people didn’t regularly return to the office, building tenants soon realized they had a surplus of space. Some tenants then moved properties when their leases expired or they sublet their offices. But when less space was needed to operate, the desire for quality surroundings went up to lure employees back to the office. Getting quality space became more important than having more space.
CBRE research shows that rising rents in top-tier office buildings have risen, while lower-quality properties rents have fallen since 2021. Customers have told us that this “Flight to Quality” trend is driving their investments in the best building amenities — modern furnishings, cutting-edge technology, in-building services and other quality improvements.
But the presence of amenities is just one tool in the kit get office buildings to flourish in this new era. It’s part of a bigger strategy: To build strong, sticky communities.
A digital building directory is a great tool to deliver a strong community feel. Beyond helping people easily navigate their spaces, digital directory signage can be used as dynamic messaging boards, virtual receptionists, and other applications. This year we’re already seeing a strong rise in interest in aesthetics, with customers seeking out art-rich, immersive LED video walls. (In fact, our website data indicates a rise in searches for digital art). It will remain important for buildings to make their mark — and offering high quality environments enabled with technology is essential to do this.
2. Central Business Districts Turn Focus to Placemaking
We emerged from the pandemic hyper focused on health, cleanliness and emergency management. And these themes have extended from our homes to our office buildings, and the cities where they’re located.
We saw sustainability and preparedness woven into last year’s 2022 BOMA International Conference & Expo — and there’s more. There’s been a seismic change in how people want to work and what they expect in the office.
They also expect more out of the areas in which they work, like Central Business Districts. According to Gensler, city residents emerged from COVID-19 pandemic seeking out more green spaces and parks, and more vibrant experiences where they work and play.
Central Business Districts are intent on creating lively public spaces that improve health and spark inspiration. Customers are coming to us keen on making the most of their existing properties and mixed-use spaces. We’re seeing this placemaking trend unfold everywhere, from the continental United States to the Hawaiian Islands. Just this month we delivered a striking LED video wall for Maui’s Lahaina Cannery Mall, in a play to turn the sleepy coastal district into a top tourist attraction that rivals Honolulu.
In other bigger metros new redevelopment projects are popping up, as more customers are commissioning digital directory signage to help visitors engage with area attractions.
In 2023 we’re expecting more urban and lifestyle development projects come to fruition. Properties have, and will continue to play, a large part in re-shaping their districts.
3. The Suburbs Will See More Growth
While downtown markets fell out of favor over the past 3 years, suburban areas have flourished. People moved away from big metros to outskirt cities where the prices and property values were more affordable. They sought jobs closer to home and everyday services like grocery store, bank branches and schools. Plus, the commute is shorter, giving people valuable time back in their days.
Suburban buildings also need to catch up to the times, as these areas continue to be developed and more houses are built. We’re continuing to notice an uptick in lobby remodel projects come in for smaller city buildings, facing pressure to make spaces more modern and efficient. We don’t see this slowing.
Adding a digital experience is paramount to property owners across multiple industries, from commercial real estate to government and education. Owners who take hold of good property technology in these spaces will be well positioned to attract valuable tenants and fill their spaces. And they can do this easily and affordably by adding digital signage.
Properties are going through an exciting moment where they need to evolve. Older properties will look to catch up with modernized competitors to win more tenants. The more modern, greener, and more dramatic…the better.
A digital building directory is an amenity that can elevate properties and meet the demands of today’s choosy tenants. Call us today to get a quote on an upcoming digital directory signage project.