Friends! What would happen if ..... kinda scary

[Daman Gandhi]

Hello everyone !

I was just going through an article which showed data of how quickly the trends have been changing lately . Massive growth in the e-commerce sector . Decrease in offline sales and with less number of people reffering to offline shopping huge impact on commercial real estate which includes shops , malls etc . Data shows 30% of malls will shut down in the coming years. So i was wondering what would happen from 10-20 years from now will commercial real estate loose its value and with losing value come decline in the rental return . Many business would still require physical space to run which are service based but still a huge amount of space will left vacant and supply will of commercial real estate will increase and demand will decline. Yes! Many commercial land would still be converted into something else but unfortunately would not produce the same return, right? Is it a safe strategy to proceed a career in commercial rental real estate ?

Please i would really like to hear from you guys as you can provide me with appropriate knowledge .

Whats your take on this ?

[Ujwal Velagapudi]

I had primarily invested exclusively in commercial retail, office, or light industrial. I loved it but have seen the writing on the wall over the years and divested last year while things were still hot. I think retail will die out, and office space's decline will be expedited as a result of COVID and employers realizing that they can still have a productive workforce with remote workers. This will inevitably drive down demand, prices, and value for these asset types. Even if some are re-purposed, I don't think it can be enough to salvage the amount of vacant buildings we already have today. E-commerce is huge. I think we've seen in the past two months that with delivery services and online retail, there is no need for you to ever step outside of your home. Also, I think it will be a massive undertaking for certain retail to be repurposed, especially the smaller investors with tiny strips. Office may be a bit easier. 

I definitely would not want to own any commercial retail/office today, as I don't have a great solution for them yet, but I can bet the person who figures out how to best repurpose them into a valuable asset again will make a fortune.