Gone are the days when residential and commercial property was just bought when required. Nowadays, the hottest trend in America is REaaS, or “real estate as a service.”
But what does this mean? Rather than the customer purely looking at the space available, real estate agents are now being required to include amenities, experiences, and anything that improves on the actual floor plan. “Dressing” a property is something that has been done for many years in the residential sector, with many realtors spending thousands to get that property looking just right for their customers.
By selling a lifestyle as well as the building, many realtors can expect to increase the sale price significantly. No longer is there an unused room in the building that leaves the buyer to use their imagination. In apartment blocks, many communal spaces, such as hallways, laundry rooms, or even gyms, are being designed to create an environment that will encourage interactions between the neighbors.
Real estate design and marketing firm S&P’s president and co-founder Sid Landolt explains, “In residential real estate, for years, we’ve had amenities where you have to go into that amenity, experience it, and go out. Those are generally cold and quiet. We’ve been reading all these articles about loneliness… and in my mind, it comes from a lack of planning and poor design.”
Another aspect of real estate that appears to be on the rise is the option of co-housing with many families living in their own private apartment, but sharing common areas such as dining rooms, large kitchens and even recreational spaces. This allows those who may not be able to afford property a good start while also encouraging interactions between residents thanks to shared chores or group activities.
It’s not just the residential sector that is experiencing REaaS; commercial property is too. A recent report from ULI – Emerging Trends – quotes, “Beyond good gyms, more tenants and their employees are looking for features such as proximity restaurants and less tangible elements, such as a communal vibe.”
There is also a call for more flexibility on our ever-changing needs. Traditionally, companies have either purchased or signed up to long-term leases on commercial property, but this is not always what is needed in today’s society. Thanks to the development of video conferencing, more and more companies are providing their employees with the option to work from somewhere other than the office, meaning a specific base is no longer required. REaaS provides the option of renting space on an as-and-when requirement — with many spaces now offering “hot desks.”
There are also many companies providing short-term rentals, perfect for the many pop-up restaurants and shops that appear in towns and cities across the country. It’s not just America that is seeing this trend. Canadian company GWL Realty Advisors’ vice-president of research services and strategy Wendy Waters agrees with the idea:
“We think of the people who use our office space are our guests, and we try to provide a better experience for them. I think a lot of this switch to real estate as a service is a response to what consumers and businesses want, and what they need. You think about flexibility, the rise of co-working spaces and their huge success, and it’s because they offer space on a one-year lease, a three-month lease, whatever you need. And everything’s ready to go, it’s turnkey. It offers the experience you want, it’s all right there, given to you as a service. It’s not necessarily cheaper, but it’s simpler, and may offer better value in the long term.”
With shorter leases there are reduced retail footprints. Thanks to stronger wifi connections many employees — as well as the self-employed — are able to work from home or the local coffee shop. In fact, you could work anywhere including the local soft play area when your children are playing! This has seen an increase in profits for some establishments with many workers purchasing in-house items such as drinks and snacks in return for using the company’s internet.
With short term leases on offer in the commercial sector, it seems the residential sector are following suit. With many tenants struggling to find the costs for long-term rental, temporary leases may be the future for landlords. A recent report looking into REaaS stated that “many people are focusing [more] on monthly costs than total purchase price. While affordability is a factor, the REaaS trend also goes back to changing consumer behaviors as people look for more flexibility as their lifestyles and preferences evolve.”
As the REaaS trend continues to grow, realtors are seeing a blending of property types, with many no longer able to offer one thing or another. Rather than offering a standard space to live, there are now options that were not even considered only a few short years ago.