Take a drive through the small towns and city centers of Connecticut and you will likely notice a few patterns. In the latest edition of city vs. suburb, younger people are once again flocking to the suburbs to enjoy the quiet life. One of the many causes of this trend includes the accessibility to the products and services millennials need via the internet. From entertainment to shopping, many of the things that once required a drive to a nearby city or shopping mall are now just a few clicks away. This of course poses challenges to brick and mortar businesses, especially when e-commerce isn’t an option. How have these changes impacted commercial real estate trends and how are today’s businesses keeping pace?
Identifying demand is more important than ever
In some cases, “if you build it, they will come” still holds true. But gone are the days of relying on niche audiences to discover brick and mortar businesses whose product offerings can now be found online. Identifying a strong demand for a product or service and centralizing a business around that peak demand is a key factor of business success. Research into demographics, purchasing patterns and competition is a critical stepping stone. While the results may indicate that Location A doesn’t have an immediate need for a business, that doesn’t mean that a perfect Location B isn’t out there. It simply requires research with a concentration on demand.
Digital and brick and mortar are not mutually exclusive commercial real estate trends
Ease and accessibility are major factors when consumers are faced with making a purchasing decision. It’s hard to compete with the ease and accessibility of the internet when a few clicks can deliver a product to a customer’s doorstep in a couple of days or less. Not every business is well suited for an e-commerce model, but that doesn’t mean that they can’t incorporate certain digital conveniences into their customer experience without sacrificing their commercial space.
For example, a service-based business can adopt an online reservation model to help customers cut down on wait time or personalize their experience once they arrive. Adding a digital product catalog can be beneficial for a product-based business, even if their products cannot be purchased online. Giving customers the option to browse on their time and chosen device can make the purchasing process feel smoother and more customized. It can also help those small businesses improve their search engine optimization to become more easily discoverable by prospects. Online bill payments can be yet another digital convenience that do not have to render brick and mortar locations obsolete.
Embrace the shift to multifunctional lifestyle spaces
In addition to small businesses incorporating digital conveniences, another way for commercial real estate trends to keep pace with the changing business landscape in Connecticut is to embrace the shift to multifunctional lifestyle spaces. These spaces typically include one or more service-based businesses like health care providers, grocery stores, restaurants and more that require a physical visit. Once there, consumers can be encouraged to explore through additional layers of convenience and interest.
One of the growing commercial real estate trends among mixed-use retail locations is to offer entertainment options such as live music, farmer’s markets, and even classes. Incorporating these “events” into the shopping experience has been gaining popularity for years. The right pairing of retail and entertainment can turn what may have been a quick get-in-and-get-out visit into an extended stay and can transform a shopping plaza into a destination. And with consumers staying for longer periods of time, retailers have increased opportunities to make an impression and potentially complete sales.
A strong partnership is key to commercial real estate lending
The changing landscape of commercial real estate in Connecticut means that even the most seasoned buyers can benefit from an experienced partner. When it comes to finding a commercial real estate lending partner, there are a few key things to look for. Access to your lending team is essential, and it’s about more than simply hearing a voice on the other end of the line. Working with a small team of people who can invest their time and experience into fully understanding your objectives is one of the best ways to navigate the changing landscape of commercial real estate. Elements like environmental concerns, layers of approvals, existing leases, and appraisals can affect the timeline of commercial real estate decisions. Finding a lending partner that is both flexible and creative can help you navigate these challenges.
At Union Savings Bank, our commercial lenders have the dexterity of a team found in a large, nationwide bank with the local knowledge that has helped guide commercial projects of all sizes from inception to completion. Our team’s accessibility and expertise enables us to partner with clients on projects large and small, across Connecticut and beyond. And it’s this flexibility that keeps us informed and ahead of the changing landscape of commercial real estate trends.
As the challenges and opportunities facing commercial real estate in Connecticut continue to evolve, so will the unique solutions needed to keep it relevant and successful. For more commercial real estate insight, visit our Business Blog.