The Counselors of Real Estate, an international consortium of commercial real estate professionals, recently released their latest report. Top ten problems Impact on real estate. The group identified, discussed and voted on the current and emerging issues that are likely to have the greatest impact on the CRE industry during the 2021-2022 cycle, and cited telecommuting and mobility as the top issue. In particular, how these issues will affect CRE buildings around the world. Technology acceleration and ESG (ecology, social and governance) were ranked as the second and third most important issues, respectively.
“As we emerge from COVID-19 into a new world rife with both local and global turmoil, our industry has been forced to recognize that adaptability and resiliency are paramount in real estate markets,” Michel Couillard, Chairman of CRE. 2021 Global Chair of The Counselors. Real Estate said in the message. “It is undeniable that the collapse of the pandemic significantly influenced the behavior of people in relation to how and where people choose to work. Now that more and more are returning to business as usual and workers are starting to return to offices, landlords and businesses are nevertheless faced with the challenge of changing the workplace and the benefits of easily adaptable and shared spaces.
“Time will tell which patterns of space migration and use will continue as all real estate sectors will be watching closely and ready to respond. Property owners and managers need to be flexible to accommodate these demand-driven changes in the desired use and layout of premises. ”
Cuillard, who is also President and CEO of BUSAC Real Estate in Montreal, added that immediate return to the office is a residual benefit for restaurants, transportation, shops, dry cleaners and other retail outlets, which will also benefit property owners. …
Real estate advisers cited acceleration and technology adoption as the second biggest impact on the industry. The pandemic has affected technology everywhere, and the real estate industry is no exception.
“The stressors were not related to new technologies, but to their adoption. The changes caused by isolation in our work, economy, social structures and in our personal behavior have forced the industry to abandon the previous resistance, ”said Couillard.
According to the group, ESG initiatives ranked third among the issues of most concern to CRE this year. Changes in customer preferences, regulatory requirements, the shift of trillions of dollars of wealth to a younger generation committed to philanthropy, job and social blurring of expectations and efforts to attract and retain the most talented people are the driving forces that have propelled ESG initiatives to one of the first places in this. list.
“Investors and market demand for ESG real estate programs are global and the key questions are what is material, where are we vulnerable, and what strategies will cost-effectively mitigate risks and create long-term value?” said Couillard.
Couillard also explained that the COVID-19 pandemic was a “stress test” that revealed vulnerabilities, appetites, and new and heightened risks.
“These themes are presented in the Top Ten Issues 2021-2022, which are closely interlinked and point to the recently changed and evolving real estate environment,” he said. “We have recognized some familiar but emerging important areas, namely cybersecurity, supply chain and price volatility. None of these concepts are new, but after a few months or even weeks we saw high-profile hacks, scarcity of resources such as microchips, lumber and labor, and widespread price increases. ”
Supply chain logistics, infrastructure, housing supply and affordability, political polarization, economic change, adaptive reuse and capital market bifurcation finished the rankings from fourth to tenth, respectively.
“Against the backdrop of prevailing conditions, our members identified housing supply weakness and its impact on affordability as the sixth issue affecting the real estate industry globally,” said Couillard. “In the US, housing supply was already anemic, but when the pandemic hit, the fall in mortgage rates and the resulting surge in sales drove home inventory levels now historically low.”
Click here for a complete breakdown of the top ten real estate issues.
Joe Dayton can be reached at firstname.lastname@example.org.