School, Jobs, and Office Space

Education:  One of the major trends in education is online learning.  From Kindergarten through Graduate School there is an emerging movement toward all or part our our instructional time being done online.  From elementary and high school through college and graduate school, the number of online options is growing.  The Sloan Survey of Online Learning states that online students in 2010 were up by 1,000,000 students from the year before with over 5.6  million students enrolled in at least one one line courses in Fall 2009.  While there are people on the both sides of the issue when it comes to the quality of academics, how does movement this impact educational use real estate?  The obvious answer is the reduction of need for bricks and mortar classrooms and schools.  Will this lead to vacant school buildings and fewer actual campuses? Will it require a revisiting of what our schools look like allowing for technology to become a focal point of our schools?  Whether it is blogging in kindergarten or attending a virtual classroom in graduate school, there is no doubt that this trend in education will impact the real estate needs of schools.

Employment:  Unemployment in the US continues to hover around 9% and has been an issue in our economy for several years.  Job growth is an economic necessity and has continued to be slow.  The greatest gains have been in the professional and business services, health care, and mining jobs according to the June 3rd release from the Bureau of Labor Statistics.  This coupled with the need for businesses to reduce expenses has led to an increase in telecommuting.  Employees that are able to work at home are often encouraged by employers to do so several days a eek - reducing their commuting expense as well as the company's operating expenses.  As renters are on the rise  there might be a niche for apartments that offer "home office" space in their units.

Office Trends: The rise of technology has also impacted the office market.  Technology access is an essential part of all office space, but as harware becomes smaller and more mobile tennants need less and less office space.  Open space with flexible areas for group meetings is also on the rise as there is a turn toward more office collaboration.   Office suites offer a less expensive alternative for businesses.   Short term furnished office space - sometimes for time periods as short as one or two days - has also seen a rise particularlyin dense urban areas.  This allows the telecommuter to have credible office space when they are travelling.  The biggest impact on real estate is most likely in the physical structure of the workplace as tenant look for flexible space with flexible leasing structures.

The influence of education and jobs on real estate is not limited to the physical building in which these activities take place.  While technology may impact the size and location of schools and office buildings, there is also a less tangible impact.  The reputation of school districts and the availability of alternation education options (private, faith-based, pre-school) plays a significant role in where people choose to live and therefore where business choose to locate.  The availability of jobs has also become a major factor in the general real estate market.