The 2020 pandemic brought with it its fair share of setbacks, with numerous businesses experiencing office closures, deferrals, and consolidations. While these impacts lasted through 2020, their effects are likely to trickle down in the years to come. Companies in the leasing space now have to evaluate how to survive in a pandemic-prone era and optimize their everyday financial operations for the future.
Leasing In 2021
It is no secret that the commercial real estate sector was one of the hardest hit by the pandemic. While the economy may have started strong at the start of 2020, things quickly took a turn for the worst, with the commercial real estate industry quickly spiraling out of control. Tenants could no longer pay their rents, resulting in increased lawsuits as landlords turned to alternatives to recover their investments.
Fortunately, there remains hope for the real estate sector. Numerous companies in the health, financial, retail, and manufacturing sectors currently point to a positive recovery, signaling renewed confidence for the leasing industry. With this trend, companies now have forward-looking insights to help them structure their business decisions for the coming year.
What the Future Looks Like For Office Space
As more companies look for ways to reduce their costs, the majority are now turning to commercial office leases. Due to the shift from traditional office space use to the current remote setups, many businesses are still stuck on what the ideal office space should look like, an aspect that requires adequate planning.
A few options for future workspaces include incorporating smaller spaces or expanding their office areas for social distancing. Co-working will also likely be on the rise as more organizations opt for short-term rental options. The subleasing market will also likely thrive, allowing more flexible commercial real estate options.
Lease Clauses To Consider For 2021
The pandemic unearthed significant protection gaps in the commercial real estate sectors, with lease clauses such as forces Majeure clauses not being applicable for public health clauses. Due to this, lease clauses that protect landlords and tenants will prove more effective, with examples being shorter leases, flexible termination, and specific pandemic force majeure clauses.
To get the best commercial real estate funding for the current climate, consider reaching out to JHF Capital today.