|A prominent real estate expert told audience members that commercial real estate is going to experience significant changes in the next few decades.The Richmond Times-Dispatch reports that on April 28th, renowned businessman and “futurist” Christopher Lee predicted that the Internet will supersede retail stores and colleges, among other institutions, leading to less (or at least different) commercial real estate. Speaking at the “Leaders Predict the Future” conference at the Westin Richmond Hotel, Lee said that the country is “over-retailed” as online shopping continues to dominate overall retail sales.
“Online retail sales will make shopping centers obsolete,” Lee told the audience. Lee, the president and CEO of CEL and Associates Inc., a real estate industry consulting firm based in Los Angeles, thinks that retail malls and smaller shops may become obsolete as companies such as Amazon take over the retail market.
To stay afloat, Lee recommends for shopping malls to switch over to other fields including entertainment, government services, and even residences.
Interest rates for commercial mortgages are unusually low, leading to a boon in commercial real estate. Some mortgage plans offer interest rates as low as 3.50% for five-year plans and 4.50% for 20-year plans.
Lee offered an inimitable take on the future of commercial (as well as residential) real estate. He outlined his view of history, dividing periods of time to indicate major shifts in real estate and consumption with major “transitional” gaps in between.
The “Age of Consequences and Restructuring,” for example, started in 2013 and will end in 2018. The “Age of Globalization and Knowledge” (2023-2028) and the “Age of Robotics and Non-Land-Based Environments” (2033-2038) will follow suit.
In the last period, Lee believes the workforce will shrink by up to 30% due to robotics and, among other things, people will look toward building structures over the ocean to accommodate a swelling global population. The ocean is an “uptapped resource,” as he phrased it.
He also predicts that higher education will change as more schools are offering online classes to students. Up to 15% of current universities could disappear, leaving the rest to become “centers for research.”
Lee concluded his talk by offering those in commercial real estate this advice: adapt to change to be successful.