The commercial real estate market is dedicated to the profit making side of business. From retailers to office spaces to warehouses, these spaces are used to generate a profit through a capital gain or rental income. From a rental income standpoint, there are many services tailored to provide opportunities for real estate owners to reach out to potential renters.
Part of understanding how a commercial property works is to work with companies that have experience in purchasing and managing this type of real estate so that you have your best foot forward when investing in commercial real estate yourself. The other side is choosing where your source of profit comes from, whether this be renting out to other tenants to use for business purposes or starting your own retailer in-location. It is important to note this as it pertains to how you can make the most out of your property, in the most efficient way.
Services in the rental industry have been created to bridge those gaps and provide those information hubs for property owners so that they are able to find tenants in a safe and reliable environment. Some of these notable services include Airbnb and This Open Space.
What is Airbnb and This Open Space?
Airbnb is an online marketplace for hospitality services for both housing and tourism experiences. It does not own any of the real estate listings that it has and makes its profits through taking a brokerage fee for each trip or experience booked. They have listings all over the world, assisting the tourism industry to prosper and grow in different countries. Beyond housing for overnight guests, hosts have begun to place their office and common spaces for day use - encouraging rentals to be for pop-up stores or long-term event spaces.
This Open Space is a similar platform dedicated to connecting creatives that are looking for space for events, photoshoots, and meetings. This service is newer and has expanded all over the US and Canada. Owners of real estate that are normally used for commercial use are taking advantage of these opportunities to rent out their space during less frequent times in the year so that they are continuing to make rental income.
Overall, both of these platforms are areas to connect owners with potential tenants, providing a safe and secure way to help navigate selection and ensure that payment occurs. It has become a pivotal part of the rental industry, creating many perks for commercial real estate owners.
What are current issues within this rental industry?
Within the United States and Canada, there are several laws and regulations that are now limiting the abilities of platforms such as Airbnb and This Open Space. Over the course of the existence of these services, they have created issues surrounding the housing market, affecting the value of housing properties that are not a part of these platforms. With laws in place, certain properties can only be listed online for a limited amount of time while others need to have long-term tenants to qualify as a hospitality services host.
However, commercial real estate is only starting to get more involved in renting out their unique spaces for multi-purpose use outside of housing. With the lack of laws and regulations navigating the areas of profit that this company can be a part of, commercial real estate owners can continue to reap the benefits of these services. For these properties, they are often in long-term agreements with tenants as a retail location but during the downtimes or transition in tenants, it would be a good idea to take advantage of these platforms so that you can get additional benefits instead of being stagnant.
What are the implications for commercial real estate owners?
Being a part of these applications allows these owners to connect with the market that are looking for event space, potential pop-up stores, and/or studio space for business purposes. Now that the world is digitized in so many formats, this is another opportunity to touch base with those that are solely existent on the internet. Thus, you lose out on a subset of potential tenants when you do not engage on these platforms. This can be tied back to your branding and how aware people are of your space.
The benefits outweigh any platform fees and costs associated with being on these hospitality based services. As a commercial real estate owner, you should optimize your opportunities by being a part of a rental platform such as Airbnb or This Open Space.
Commercial real estate is rising in popularity in Canada. As an owner, understanding how to make the most out of your property to ensure that you maximize your profits is crucial. Whether you need more information on other ways to do so or you want to learn about our investment strategies, feel free to contact our team.