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The world is changing much faster than we see or realize, and nothing is changing more rapidly than consumer interests. American business used to be based primarily on goods – cars, TVs, electronics, and more. Now, we consume through services like Netflix, Uber, and social media. Service is the new storefront, and real estate is no exception.
Instead of Uber or Spotify, the real estate world has WeWork, the leading office space service in the U.S. This unique service provides daily, monthly, and long-term leases for office spaces ranging from single desks to full-floor offices. This revolutionary model offers flexibility that other real estate holders have never used before, and it’s been met with resounding praise. Companies like Microsoft, Pfizer, and Samsung have all utilized real estate as a service (REaaS) to grow their companies amidst changing workforce needs.
WeWork isn’t the only way the real estate industry is bending its boundaries. Some common examples of REaaS include:
Services like Airbnb allow residential real estate owners to rent their properties short-term
Service-based businesses offering free wifi, such as hotels and coffee shops, are now becoming temporary “office” spaces
Service-based businesses like restaurants often offer small retail space to partners (think gift shops in a Cracker Barrel or Starbucks) to increase sales without increasing their rental rates
Real estate is no longer a rigid investment opportunity – it’s an investment with a variety of revenue streams that can be tailored to the individual needs and goals of the space. Even smaller service-based value adds such as proximity to restaurants and open floor plan designs that encourage socialization can put your real estate investment in the REaaS category.
REaaS is not limited to commercial buildings either. It is a common element present in modern multifamily developments. Many multifamily communities are looking for a superior experience in their community rather than traditional real estate value adds such as location and rental rates. Condominium owners, for example, often look for properties that market to like-kind residents and that offer social activity more so than they will look for a property with a nice view and affordable amenities.
For developers looking to transform their models, this can be a new frontier to conquer in the real estate sector. Designing office buildings and multifamily properties that can work in a service-based model will likely see considerable success. The real estate industry is changing, and savvy investors who change with it are likely to become leaders of the pack.
Legacy offers unique developmental properties and land that can be used to lead this new frontier. If you’re interested in learning about our land and vacant office spaces, contact us today to learn more about available properties.