You've probably heard the term "Shareconomy" floating around the lexicon, but do you really know what it is? The Sharing Economy (otherwise know as "Peer Economy," "Shareconomy," or "Collaborative Consumption") refers to the open-source nature of the ways we access goods and services. Essentially: AirBnB, Uber, or Snapgoods. As consumers we love the convenience and cost-efficiency of a Shareconomy, but how do these services affect the health of commercial real estate?
The Hospitality Industry Takes a Hard Hit, but Continues to Thrive: We all assumed that companies like AirBnB and HomeAway would be taking away business from hotels, what we didn't see coming was the $450 million that the hospitality industry lost to AirBnB. Despite the monetary hit, the demand for both hotels and AirBnBs are about the same .
Zoning? What's That?: If your apartment doubles as an AirBnB, what should it be zoned as? Zoning, and many other regulations have come into question as building purposes become more fluid. In the beginning, Shareconomy services only made up a small part of the economy and had little impact on zoning and rental agreements. However as time goes on, this new way of making money challenges current rules and can step into legal gray-areas.
Investors Can Now Bypass Traditional Lenders: Crowdfunding has made it much easier for people to raise money for just about anything, and that includes real estate. For instance, RealtyMogul is a crowdfunding source for real estate investors; an "online Real Estate Investment Trust ("REIT") designed for diversification, cashflow and appreciation," according to their website. With resources like this, people can skip banks altogether when it comes to investing.
Shareconomy Innovation is Snowballing: If you thought the Shareconomy was just a fad, think again. We started out being able to temporarily rent houses for our vacations, and now people are able to rent commercial kitchen space, office space, and even someone's personal Wi-Fi connection. The more that the freelance mindset takes over, the more people feel they can be a part of it and begin to innovate with their own ideas for services.
Bottom Line: The Shareconomy is the child of technology and the savvy mindset that resulted from the Great Recession. Technology will continue to get better, as will the Shareconomy; however, as new ideas come to fruition, so do new problems like taxation. The CRE world, much like the Shareconomy, must learn to innovate and roll with the punches.
How have you seen the Shareconomy affect CRE? Let us know in the comments below!
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