Those who are interested in investing in commercial real estate in Southern California are increasingly having to take creative approaches to their efforts in order to have them pay off. For decades, the majority of commercial real estate space in SoCal that hasn’t been devoted to retail has been constructed, refurbished or otherwise developed as office space. This is no longer the case.
Over the past few years, a shift in the way that many businesses operate has dramatically decreased the general market for office space. As a result, many municipalities are struggling to keep their downtowns and business districts vibrant because so much office space is sitting vacant. Creative real estate investors and developers are attempting to capitalize on this reality by repurposing office space in a variety of ways.
Warehouses, apartments and pickleball, oh my!
There are areas of the commercial real estate market that are growing and many investors are turning their attention to these opportunities accordingly. For example, the need for warehouses has increased since the world of online shopping has exploded. Even recreational crazes – like pickleball – are creating opportunities for investment where none existed previously.
Conversely, some commercial real estate developers and investors are opting to seek rezoning permission to turn commercial spaces into residential real estate opportunities. Many areas are in significant need of low-income, standard and even luxury apartments, for example. Shifting the investment focus from commercial to residential real estate is working well for many.
Ultimately, success in commercial real estate increasingly requires more creativity and market savvy than it used to require. While this may be an inconvenient turn of events for some, those who are willing to embrace a challenge are still in a strong position to come out ahead.