During my real estate journey, there has been one major learning that I hold paramount: Staying abreast of and informed about emerging trends is key. My father is a real estate developer, so I have grown up around the business of real estate, which ultimately led me to set up a consultancy that just crossed the $1 billion portfolio mark in 2023.
The commercial real estate landscape continues to undergo significant transformations, shaped by ongoing shifts in global markets, technological advancements and changing societal norms. In 2024, this landscape could also be influenced by inflation rates and the U.S. federal election, for example. These factors have major implications for the industry, so understanding and adapting to trends is critical to navigate the market.
Here are the top trends I anticipate for 2024:
1. The Continuation Of WFH And Remote Working
There is no doubt that the pandemic has transformed the office landscape and, by extension, commercial real estate. Remote working (or work from home, WFH) and flexible working conditions have now become the norm rather than the exception. With companies increasingly embracing hybrid work models, the demand for flexible office spaces has surged.
To adapt to this trend, commercial real estate leaders in major cities must embrace flexibility in leasing agreements, offering tailored solutions to accommodate hybrid work models. Investing in technology infrastructure to support remote work and creating adaptable office spaces that prioritize collaboration and innovation will be essential.
In my experience, I was able to grow my business while working remotely. Being able to connect with investors and partners all over the country and world has allowed me to reach new heights. Also, I am much more productive when working from home as I can balance my work schedule with my family schedule, especially with my kids’ activities, etc. Flexibility is the future.
2. Environmentally Conscious Business Practices And Sustainability
Climate change is an important factor for the real estate market as we concede that the industry drives approximately 39% of total global emissions. Increasingly, I’ve seen investors seeking to decarbonize their portfolios and reduce their carbon footprint, ensuring sustainability becomes a key consideration. Moreover, even tenants are seeking out environmentally friendly options that offer lower operating costs and stronger property values, signaling that properties with eco-friendly features could be in high demand.
Given this demand, there is a growing emphasis on eco-friendly buildings, with developers cognizant of energy efficiency and a reduced carbon footprint. For instance, large tracts of land we own in Arizona are well-suited for utility solar projects, which has led to my involvement in structuring large utility-scale solar projects in the state.
As sustainability becomes a top priority for investors and tenants alike, commercial real estate leaders can prioritize eco-friendly building practices, such as incorporating energy-efficient designs, renewable energy sources and green building certifications that can enhance property values and attract environmentally conscious tenants.
3. AI And Technology
With Chat GPT and AI becoming common terms in 2023, it is no surprise that the integration of technology could impact commercial real estate operations. This presents unprecedented opportunities to streamline operations and enhance tenant experiences in commercial real estate.
Commercial real estate leaders can opt for smart building technologies that prioritize user-friendly interfaces and seamless integration with existing systems. Leveraging AI-driven analytics has the potential to aid in optimizing space utilization, improve building efficiency and provide valuable insights for operational decision-making. Embracing innovation and staying abreast of emerging technologies could be crucial for maintaining a competitive edge in the market.
4. Evolving Market Dynamics
In 2024, market dynamics that drive demand for real estate will continue to evolve, largely influenced by a new post-pandemic reality. The pandemic led to shifts in tenant preferences and geographic priorities, with traditionally “secondary markets” such as Arizona experiencing increased attention from investors and tenants seeking affordability, quality of life and business-friendly environments outside traditional hubs like New York.
To capitalize on emerging trends, it’s essential to stay agile and responsive to shifting tenant preferences and geographic priorities. Keep an eye on emerging markets, which can offer opportunities for growth and diversification, as businesses seek affordability and business-friendly environments outside traditional hubs. By conducting thorough market research and forging strategic partnerships, commercial real estate leaders can position themselves for success in an ever-changing landscape.
Source: “Navigating Commercial Real Estate In 2024: Top Trends To Look Out For“
