By Matt Fenske
In the ever-evolving landscape of commercial real estate (CRE), large infrastructure projects are reshaping the way we think about property development and investment. Transportation, energy and healthcare projects not only improve a community’s overall quality of life, they also leave an incredible mark on the CRE sector.
Transportation, energy, telecommunications
When it comes to the allure of a commercial property, it’s hard to overstate the significance of easy, direct access. Areas with robust transportation infrastructure act as magnets for both commuters and businesses. The construction of highways, bridges, and mass transit systems can have profound impact on the demand for properties they feed into.
Accordingly, Florida is prioritizing a slate of transportation infrastructure projects. Such programs as the Moving Florida Forward initiative and the proposed $14.7 billion Framework for Freedom Budget are aimed at relieving traffic congestion and streamlining the state’s supply chain. In addition to 119 miles of new highway lanes, the latter proposes massive investments in bridges, seaports, aviation, and rail – projects expected to positively impact real estate.
Energy infrastructure projects also play a pivotal role in bolstering economic growth, and with it, the CRE market. These range from traditional power plants to cutting-edge renewable energy farms. Regions investing in energy systems often experience a surge in industrial and commercial activities. As the emphasis on sustainability grows, commercial properties with energy-efficient features become more attractive, especially for business with well-defined environmental goals.
Telecommunications is another class of large infrastructure initiatives that bolster CRE values. Projects such as fiber optic networks, broadband and satellite communication systems improve a given area’s connectivity to the rest of the world – an indispensable feature for most businesses today.
Healthcare as a catalyst for development
The recent spotlight on accessible healthcare facilities has underscored the importance of medical infrastructure projects. Proximity to state-of-the-art medical centers and research institutions is becoming a prime consideration for businesses seeking office locations. The growth of healthcare-related industries and the increasing demand for medical office spaces can contribute significantly to the rising demand for CRE in these areas.
Sarasota, Florida is the beneficiary of several medical infrastructure projects currently on the drawing board. Most notably, Sarasota Memorial Healthcare System recently announced details of its new North Port hospital, which will contain 350,000 square feet and 200 beds for acute care.
Sarasota is a prime example of a city opening up fresh CRE possibilities as a result of new infrastructure planning. An ambitious “city of the future” project, Sarasota’s downtown master plan promises a ripple effect on the local CRE landscape as it enhances the pedestrian and cyclist experience along the waterfront. People strolling through downtown are likely to frequent local shops, cafes, and boutiques. This shift away from “all concrete” is poised to breathe new life into the retail CRE market.
Beyond the project’s obvious impact on retail spaces, the integration of condos atop retail establishments is a strategic move that can further fortify the CRE market. With more people choosing to live close to downtown businesses, the demand for mixed-use spaces is likely to surge.
Large infrastructure projects are not just concrete and steel. They are catalysts for change in the CRE arena. The transformative impact of these projects extends beyond their primary functions, influencing property values, demand and the overall economic vibrancy of the region.