- December 5, 2016
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By Rodney Mishler
An article published in the current issue of Commercial Investment Real Estate Magazine discusses urban trends for the office leasing sector. While these trends don’t always represent what we see here in New Braunfels, our market is still affected by changes in population and job growth. So the trends are worth examining when talking about office space for lease in New Braunfels.
Donald Cartwright, a managing director of a commercial real estate firm in Miami and the author of the article, says that urban population growth means an increasing number of groups – from millennials to baby boomers – are choosing to live in denser areas that offer a live-work-play lifestyle. This lifestyle inevitably affects the office leasing needs in urban areas. We are seeing the same trend, on a smaller scale, right here in New Braunfels, TX.
New Braunfels might fit into the category of San Antonio suburb. The Metropolitan Statistical Area (MSA) put us in the name after all. (We are officially part of the San Antonio-New Braunfels MSA). But there is no denying that residents of New Braunfels are increasingly living, working and playing right here in our own backyard. Just look at mixed-use developments like The Village at Creekside (located at IH-35 N. and FM 306) and the rapid commercial growth happening on Hwy 46 West. Commuters to San Antonio will always make up a large part of our population. However, job and, just as importantly, commercial real estate growth offer residents new opportunities to live their lives without ever venturing outside the city limits. So how does this affect the office leasing market?
Well, for starters, office job growth can lead to a shortage in the total market inventory. The demand could cause rents to increase until new construction is added. SVN also leases a lot of repurposed residential property with commercial zoning to fill this need. Additionally, population growth can drive the demand for start-up and professional space, typically units between 150-500 square feet. Some landlords are even finishing out their buildings with these tenants in mind. Which brings up the last and most important point, the user base is evolving. Cartwright says millennials account for the majority of today’s workforce and commercial buildings need to appeal to them. Landlords must be aware, flexible and accommodating to the open concepts and collaborative environments of these crucial tenants.
Investors looking for maximum return on investment may wish to tap into these growth factors. Many successful landlords use outside the box thinking to realize the full potential of their investments.