Rental spaces have become a common trend. Whether people are choosing to rent an B&B instead of a hotel, or a coworking space instead of an office, these unique options have paved the way for savvy spenders to maximize on typically pricier purchases.
With these increases, we’re finding that real estate investors are jumping on the bandwagon as well. Once you learn the backgrounds of each of these type of rental options, as well as the success they’ve had, you’ll understand their reasoning behind this popular venture.
Though commercial real estate and B&Bs differ from one another, a recent article by Priceonmics suggests that the two can benefit each other.
Popular B&B services, such as Airbnb, are finding much success in the rental space. Through Airbnb, travelers gain the opportunity to explore and relax in unique, homely accommodations in over 191 countries. Operating successfully over the last eight years, they’ve served over 60 million guests and have averaged $100 million for each operating year. On a larger scale, with their many diverse locations, B&B listers are able to generate income which often contributes to rent/mortgage expenses. On the largest scale, it can generate tax revenue for participating states.
Popular coworking space providers like We Work help remote employees and freelancers transition from the coffee shop to an office space. Services like We Work and similar companies offer a variety of plans for every workers’ need, from desks to a private office. For companies in need of coworking spaces, they can take advantage of conference rooms to enhance company and client meetings. We Work is available on a subscription basis, and the company has valuated to be worth $10 billion in the near future.
With success spreading from guests, to employees, to cities, where do commercial real estate rentals come into the picture?
Simply investing in properties that serve these purposes. Though this trend is yet to scale, there is data to back up its potential. Research shows that on average, New York City real estate investors are most likely listing 3 to 272 units annually. These listings have equated to $168 million dollars.
B&Bs present the opportunity to purchase cheaper properties with a quick turnover. With individual renters currently dominating the market, commercial real estate agents and companies have the chance to get in early and put their own touch on these properties, as this service is all about providing personalized hospitality.
In relevance to coworking spaces, we’re constantly seeing the new projects that are renovating the city for upscale offices. Coworking spaces can easily fit into this equation. As people become more mobile in their work efforts, the need for this flexible service will grow – which includes the growth for the need for buildings to house these spaces.
How do you see rental spaces benefitting the commercial real estate industry? Let us know below.
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