As the gig economy has become a staple in almost every industry, it’s natural to question what the effect of the gig economy is on commercial real estate. There has been a shift across the world and more people are choosing gig-based careers over payroll positions every day. The gig economy has re-shaped entire industries. The bones of the real estate industry remain largely the same. Still, anyone that’s quick to dismiss the gig economy’s creep into every industry shouldn’t assume that commercial real estate is safe just because it’s a deal-based industry. The entire economy is changing, and with the rise of crypto-currency, blockchain and the internet of things, we’re likely only seeing the beginning of the gig economy shift. If you’re paying attention, you will notice these effects already starting to take hold.
Technology Becoming Intertwined In Real Estate
Commercial real estate has always relied on new technological advancements to make deals smoother and sleeker, but the majority of the deal has always been done face to face. There was an art to the whole process. Now, with the intertwinement of ever-advancing technology, the delivery method of real estate services has changed. With the advent of the gig economy, technology continues to give people access to brokerage services without ever meeting with a broker, either through online deal making or completely through automation. Yet, as the investor base shifts more toward the Gen X and Millennial crowd, technology becomes increasingly more important.
Gig Consultation And Brokerage
While networking efforts are not entirely futile, it can be disheartening for workers at large brokers and firms to see that investors no longer have to come to them for brokerage services. Instead, they can pop out their smartphone, find the right app, and start the investment process without ever shaking a hand. Undoubtedly, there will be a time in the future where investors can make deals from start to finish without ever getting out of bed, if it’s not already here. Furthermore, the gig economy allows investors and brokers to get tasks done without the overhead of an entire contract to fulfill. Why sign with a contractor to complete a simple task, when it can be handled by a temporary, gig worker? This is the reason why the gig economy has crept into every industry and why it will continue to move in the commercial real estate sector.
The Prevalence Of Coworking Spaces
In perhaps the most direct example of the gig economy’s effect on commercial real estate, the creation of co-working spaces continues to grow by 22% annually. These collaborative spaces offer short term leases, if any lease at all, and they are perfect for self-employed workers chasing gigs. Maybe they won’t house a team of 50, but they can definitely handle a team of two working on a social media marketing contract for a larger brokerage. These spaces used to seem radical, but now it appears that they are here to stay. Commercial real estate investors should be aware of their presence and the smart ones might even be able to cash in on the rapidly changing industry.
Is Traditionalism Gone?
In a sense, we are seeing a shifting of the old guard to the new as the gig economy becomes the model for most workers and more people leave their payroll positions for self employment. Traditionalists will try to hold on to the old ways of real estate for as long as possible, citing that the industry doesn’t really ever change. And the trend setters will likely try too early to adapt to all the tech advancements, spooking away their traditional investors before they have truly adapted to the change. The company that embraces classic traditionalism, but also shows no fear when it comes to adopting the tech and ideals of tomorrow will be the one to come out on top.
If you’re searching for a team that is mindful of the industry traditions, but willing to try new things to get the perfect deal, reach out to LCI Realty. Call 480-565-8981 now for more information.