Commercial Property Update by Coldwell Banker Bermuda RealtyFrom Coldwell Banker Bermuda Realty Commercial Newsletter, May 2020 - 'Challenge Meets Opportunity' by Rachael Correia
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HOW TO FIND OPPORTUNITIES IN OUR CHALLENGING COMMERCIAL MARKET As the world continues to evolve into the new norm the commercial market has been presented with a variety of new challenges. As an agent who is specifically dedicated to our commercial market I welcome the opportunity to assist my customers and clients who may be navigating new challenges and exploring new opportunities. The recent impact to our economy provides us with the opportunity to reflect on what past decisions have been successful and whether there are others which need to be restructured in order to achieve a positive outcome. Through shared experiences, market intelligence and our agency tools we are well positioned to offer you guidance and advice.
LOOKING AT 2019, nine properties were sold at dollar values 50% less than what properties were valued at in the past 4+ years. In Q1 2020, one property has sold in the Northeast Hamilton Economic Empowerment Zone (EEZ). The EEZ is an area targeting, entrepreneurs to consider developing, renovating and occupying this section of the city for future owner occupancy or investment purposes.
MIXED-USE COMMERCIAL AND RESIDENTIAL DEVELOPMENTS are in demand for our city. For many this live-work-play lifestyle is a preference to being within walking distance of social hubs and place of employment. This segment of the market won’t be slowing down anytime soon. Rosemont City Place Residences are perfect for buyers who wish to live on the edge of our city.
Did you know?
- There are approximately 30 commercial properties island wide currently on the market for sale valued at around $54M.
- 19 properties are within the City of Hamilton accounting for 63% of the islands commercial sales inventory.
- 2 properties are located on Front Street with unobstructed Hamilton Harbour views.
- 11 properties are located in North- east Hamilton Economic Empowerment Zone (EEZ), accounting for 37% of the islands commercial sales inventory.
Did you know?
- Roughly 500,000 SF of office space remains vacant within our city.
- Approximately 100,000 SF of large vacant long-standing office spaces have been converted into smaller units and successfully leased within the past 2 years.
- The city currently has the capacity to accommodate desk spaces for around 2,500 new corporate workers.
- Landlords are receiving around 30% - 50% less in base rents than 4 years ago.
MARKETS TRENDS for commercial real estate remain fairly similar from 2019 to 2020 with mergers and acquisitions along with ‘musical chairs’ triggered by favorable rates and lease negotiations. The time has come for many companies with traditional leases of 10+ years to assess the market and determine their options to renew within their current space or relocate their business to another building. From this, amenities and productivity of workspaces such as downsizing and open plan layouts are playing influential roles with this decision making process.
ECONOMIC SUBSTANCE ACT (ESA) has lead to an increase in enquire. Demand for 1 or 2 offices with a shared boardroom is currently the trend and landlords have been quick to respond to this emerging demand.
There has been a dynamic shift recently in the world and the advances in technology have provided the tools to work remotely. Globally, we have all taken to video conferencing, virtual conference calls, webinars and other means of staying in touch. Remote working has been a growing popularity on how we conduct business and our lifestyles. What will happen in the Commercial Market next? The answer is unknown as we’re all continuously evolving. “Whether being a property owner with retail tenants or an investor in a commercial development, we are armed with the technology and resources to show you the way forward, even remotely, using our global network and local knowledge”.