8 TRENDS THAT WILL AFFECT THE FUTURE OF THE REAL ESTATE INDUSTRY
PROPERTY MANAGERS, FACILITIES MANAGERS, AND BUILDING ENGINEERS, THESE TRENDS ARE CRITICAL TO NAVIGATING THE COMMERCIAL AND RESIDENTIAL LANDSCAPE.
The modern real estate industry has amped up the already-demanding nature of the industry in a way that is here to stay. With a never-ending to-do list, it can be easy to overlook less urgent tasks, but often, these are the most important and can carry long-term consequences if not proactively addressed. I’m talking about having a plan in place AHEAD of any unplanned disasters that can occur. When thinking about business continuity, the following 8 trends will influence the way property managers, facilities managers, and building engineers operate on a daily basis.
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ACR is a proud BOMA member and local Chicago business who is passionate about helping our area commercial and residential property managers, building engineers, and facilities managers stay ahead of the curve when it comes to managing risk.
1. Hybrid Working Accelerates the Digital Transformation
The pandemic has expedited the digital transformation for office-based organizations. The notion that white-collar workers can perform their duties just as effectively from alternative locations such as home, co-working spaces, coffee shops, or airports, has transitioned from novelty to norm. As work locations gain flexibility, equipping employees with the necessary digital tools for their tasks becomes paramount to creating freedom in choosing work settings and locations. Traditional meeting room reservations are converting into hybrid arrangements, where some members are physically present and others join virtually.
2. Climate Change Requires Better Sustainability Efforts:
The COVID-19 pandemic has underscored the critical importance of preparedness and foresight. With an escalating frequency of severe weather events worldwide due to climate change, the urgency for a paradigm shift towards robust sustainability policies has never been greater. The real estate industry shoulders a significant share of the world's carbon footprint, coupled with substantial energy wastage. That being said, there has been a notable surge in the incorporation of Environmental, Social, and Governance (ESG) considerations. Many enterprises are formulating comprehensive corporate ESG strategies to position themselves favorably in tackling climate-related challenges and showcasing societal accountability.
3. Businesses are Positioning for the Long Haul
Within the realm of real estate and facility management, resilience predominantly centers on ensuring the continuity of business operations. This entails formulating plans to mitigate risks, safeguard against damages, future-proofing buildings, and navigating through unforeseen and extreme circumstances. As discussed earlier in this blog, with the strategic integration of virtual and diverse physical workspaces, it’s imperative to provide a secure and dependable place for employees in the face of the unexpected. Post-COVID, resilience takes on an additional dimension: the ability of workers to maintain focus and positivity amidst the challenges of the world. A workspace that not only ensures business continuity but also nurtures personal resilience among employees must take precedence in strategic planning, especially given the evolving demands of modern organizations.
4. Metrics Matter More
The Internet of Things (IoT), machine learning and artificial intelligence, are all innovations that have an impact on the work we do and how we do it. Having real-time access to both big data and detailed data, allows for improve decision making, especially in the real estate world where the competition can be fierce. Making better use of data allows organizations to make ‘smarter’ decisions, meaning that they are more likely to make the right decision at the right time, which can be game-changing for portfolio management and workplace strategies. Businesses are quickly learning that you can’t fix what you don’t measure, and data analytics tools will solve for a variety of problems, from proper project testing and implementation, to reducing irrelevant costs and serving as the communication point between stakeholders. To take this a step further, Building Management Systems (BMS) can meet the changing needs of buildings and what’s inside them – such as more agile, adaptable workspaces with healthier building environments and improved air quality. Businesses are quickly learning that you can’t fix what you don’t measure, and data analytics tools will help with a plethora of problems, from proper project testing and implementation, to reducing irrelevant costs and serving as the communication point between stakeholders.
5. ‘Proptech’ Becomes Prominent
Over the next five years, the concept of property technology, commonly referred to as 'proptech', will become an increasingly familiar trend. Proptech merges real estate with cutting-edge technologies such as the Internet of Things (IoT), artificial intelligence (AI), blockchain, big data, drones, virtual and augmented reality, which are progressively entering the real estate domain. This convergence aims to revolutionize the real estate sector by digitizing and virtualizing physical infrastructure. Proptech isn’t just about adding smart technology to building management processes, it also extends to financial management and building valuation sectors of the industry. Even more, proptech will increasingly emphasize the interconnectedness between energy efficiency, operational reliability, movement optimization, climate regulation AND comfort, access to amenities, security post-pandemic.
6. The Great Resignation Impact is Felt
Since early 2021, a significant trend known as the Great Resignation or the Big Quit has been taking shape, primarily as a response to the COVID-19 pandemic. This trend has led to a surge in a mass exodus of employees voluntarily leaving their jobs, either to accept new offers or to embark on entirely new career paths, especially in the U.S. where a record 4.5 million people voluntarily resigned. This trend's ripple effects could soon become apparent for real estate and facility management where workplace engagement, talent acquisition and retention, and overall tenure took a hit.
Evolving demographics within the workforce should also be considered as diversity in the workplace is expanding. This evolving landscape significantly shapes workplace strategy and design, as the unique preferences of different worker profiles influence demands on the workplace. Skilled trades, wages, and work/life balance are playing significant roles in the engagement of the workforce.
7. Compliance Evolves
Looking into the future, a large compliance shift is on the horizon. Compliance as we know it today is changing as it becomes increasingly entwined with sustainability, active legislation around Environmental, Social, and Governance (ESG) matters, which will split between legal compliance and corporate compliance. On the legal side, we’ll see real estate and property managers gearing up for a new array of compliance requisites intertwined with ESG and building operations with sustainability standards poised to take center stage. On the corporate side of things, beyond government-mandated regulations lies a distinct pattern emerging through corporate compliance policies. These policies are designed to work in harmony with an organization's mission and activities while setting ESG goals. This dimension of compliance holds the potential to wield significant influence over workplace dynamics and asset management practices. Forward-thinking organizations across various sectors will be compelled to exhibit their commitment and capability in contributing to both global and regional ESG objectives. The dynamic interplay between legal and corporate compliance in the arena of sustainability marks a transformative period ahead—one that will reshape the way businesses operate and contribute to a more sustainable world.
8. Streamlined Integration of Operational Technologies
Historically, Information Technology (IT) and Operational Technology (OT) networks remained separate entities, characterized by distinct profiles, diverse systems, tasks, and priorities. Yet, the distinct line between the two is gradually eroding, bringing in a notable convergence of operational technology and information technology that will change the way various aspects of building operations are regulated. Moving forward, OT/IT convergence will help bridge the gap by connecting control, safety systems, and industrial processes with business and enterprise systems responsible for storing, processing, and delivering information. The addition of automated APIs may be integrated in ways that empower buildings to intelligently respond to occupants' requests, such as adjusting heating based on individual comfort preferences. This concept could even extend to creating personalized microclimates within different office areas, activated via employee voice commands or personalized applications. Efficiently integrating operating technologies and proptech into user-centric applications for real estate and facility management necessitates a futuristic approach to building management helping to streamline complexities and offer users greater insights for and equip users with informed decision-making.
In Summary:
The real estate industry is seeing unprecedented transformation, and property managers, facility managers, and building engineers have to stay ahead of the curve by being proactively prepared. In this era of fresh perspectives and technology shifts, building management as we know is positioned to change significantly. That’s why when it comes to business continuity planning, you must ask, what challenges need our attention, and how do we effectively prioritize them?
If you’re looking for a partner with the experience to help you navigate the complexities of a new residential and commercial real estate world, consider ACR. We have the people, experience, and resources to deliver on our promise to maintain operational continuity, reduce loss-of-use, and mitigate operational expense for our real estate clients.