The challenges facing the commercial real estate market is tough and presumably will get tougher.  Property values have fallen 30 to 40%.  Delinquencies on commercial loans have tripled and vacancy rates are up in many cases 20 to 25 percent.  No part of the country is immune from the challenges of this sector, which will most likely not see any relief any time soon.

Tough times will require smart thinking and perhaps taking on a bit more risk in their real estate deals.  Finding those safe long-term tenants will undoubtedly prove to be considerably more challenging in the coming months and years ahead.    Good news is that there are ways that landlords and developers can mitigate their risk or reduce cost as they look at their tenant improvements investments.

The growth in use of modular architectural walls like manufacturers such as Nxtwall (nxtwall.com), will allow easy reuse of these agile architectural components to divide tenant spaces and meet the varying needs of each respective tenant assuming these spaces.  With reuse comes less waste of drywall and construction debris that has been suggested to occupy up to 40% of U.S. landfills.  While BIFMA has tracked a growth in this particular market segment of 35%, the U.S. market will certainly get closer to its European counterparts as the 85% or more of walls constructed with convention construction are replaced with demountable walls that are built up on site, and get closer to the 85% market share they occupy in Europe.

Good news for landlords, developers and facilities managers, the new demountable wall concepts now available in the U.S. market are more affordable than ever, even competitive with conventional construction and with the flexibility to adapt to changing space requirements.  Those cumbersome “unitized” panels that don’t change in look, size and material are quickly being replaced with a demountable wall and truly sustainable “stick built” approach…without the dust, the mess and the delays.