Common Commercial Real Estate Development Issues

Katie Thompson
Last Updated: January 10, 2024

As civil engineers, we have been working with commercial real estate owners over the last 15+ years and that has brought some insight on the most common challenges commercial real estate owners face. Let's take a look at what is keeping commercial property owners up at night.

Finding Tenants 

Understanding your target market and their budget considerations is key to renting out your commercial space.    Making your commercial space attractive for future tenants such as a well-designed parking lot, a tenant improvement allowance and free wi-fi can help attract long term tenants.  Parking availability is just as important as your commercial real estate location if you are not exclusively attracting foot traffic.


Once a commercial building inspection is complete, the prospective commercial real estate owner will have a better idea the structural updates required to stay functional.  However, staying competitive usually requires some redesign and remodelling to make the space more visually appealing.   Other considerations may include upgrading ventilation or changing shared spaces due to health-related concerns which can increase the cost per square foot of a commercial property significantly.

Commercial Property under Renovation

Changing Needs

The pandemic dramatically shifted the need for commercial office space. Many employees now work from a home office permanently or have a hybrid position and the demand for commercial office space has decreased.   Similarly, the demand for hotels has shifted as Airbnb and VRBO reservations have become more popular.  The dynamic and aging population also will also contribute the changes in property usage.   Commercial property owners want properties that will stay relevant to the ever-changing economy.

Staying relevant is challenging and some commercial property owners will benefit from rezoning a property.  For example, commercial land may be rezoned to a strip mall or a hotel depending on the location and municipal bylaws.  This capital investment may prove to be a better revenue stream.

The Brewery District in the Oliver Neighborhood in Edmonton, Alberta

Consumers Want Experience 

With online shopping growing exponentially, the brick-and-mortar stores will need to become more creative to keep foot traffic.  The infrastructure design becomes part of the experiences in more subtle ways.  The proximity from your vehicle to the store plays a role on your traffic in the store.  If it isn’t easily accessible, consumers will more likely order it online from Amazon to avoid the inconvenience.  However, if the consumer is greeted with a positive experience, it will likely outweigh the inconvenience of parking further away.

Changing Economy

With higher interest rates, budgets are being squeezed putting commercial real estate under pressure.  Commercial property improvements such as parking lots, rezoning or a campground expansion get paused due to economic uncertainty.

Bolson Engineering and Environmental Services is a civil engineering company based in Edmonton, Alberta and we have been operating since 2007.  We have partnered with commercial property owners to complete building inspections and Phase One ESAs.  We also have designed, rezoned and project managed a variety of commercial real estate across Alberta.  Please contact us to discuss your project.

About the author

With more than 12 years in human resources, Katie brings important process management skills to the table. Her direct experience with senior management in the construction industry helps her understand your engineering project goals. Her creative forward-thinking propels Bolson toward exciting new business opportunities.

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