Key trends impacting the future of real estate
“Change is constant” has never been more true. In the eight years we have been publishing the Top 10 CRE Trends, we have seen a lot of change. Organizations face a confluence of headwinds that are impacting growth, costs, supply chains, and the ability to plan. In fact, the trends we highlighted in this year’s report are already starting to evolve into new trends.
The key to success? Adaptability.
The future of the built environment will require radical transformations and significant investment in new technologies, combined with a deep understanding of users’ priorities and expectations, and aligned with a responsible real estate strategy. It’s a complex path ahead for corporate occupiers and investors.
"Managers who can expand their imaginations to see a wider range of possible futures will be much better positioned to take advantage of the unexpected opportunities that will come along."
Paul Shoemaker, MIT
Game changers: Staying ahead of the curve and leading organizations toward success
The real game changers are the trends that actually get our clients to think differently about the future. When we discuss our findings, our clients tend to focus on three trends that are very conventional and two that they don’t know much about—things that get them to think outside the box and take a leap toward the unknown. They need to take the risk to go in this direction. It may not resonate straight away, but it’s always paying off.
That’s what our research is all about—How do you tease curiosity? How do you shake the norm? How do you raise challenges that were not on the agenda because they were ignored, and people tend to hide their heads in the sand?
Researching the future is a complex methodology. Really complex. I am always keeping a record of the trends; it’s like a matrix of coding and interconnected nodes. When you take the trends one by one, they’re interesting, they’re telling you something, but they’re not telling you everything. It’s a combination of trends that create a massive reaction, and that’s what I’m looking at in my research. You should never look at a trend in isolation. It’s the clash of trends, which is highlighting a challenge to tackle and an opportunity to act upon it. I am searching for the weak and strong signals—what is the right combination of trends across society, across the economy, across our industry sector that are triggers for something else to happen.
"Getting ahead of an exponential curve requires a different approach to planning than most companies are accustomed to."
Predicting the future: A daunting task of navigating a future that demands transformation and adaptability
Nobody truly knows exactly what the future holds; we can identify the game changers and the emerging trends, which will accelerate the transformation. Based on this analysis, we can identify possible scenarios, possible futures for the built environment that can help us think differently about our future. That’s what is really interesting when you think about the future of the built environment and the future of real estate. We are then faced with multiple possible scenarios that can help us make decisions and anticipate the path to actually reach a desired state—or avoid it. We’re building the scenarios, so our clients can decide the best path forward.
The Top 10 CRE Trends 2023 reflect where a lot of our clients are in their journey of adaptability. They adapt to new situations, like the COVID-19 the pandemic and state of the economy. It’s what we’re going through, and corporate real estate should not ignore that. Let’s explore some of them.
1. The hybrid reality: Operationalizing the hybrid model and deploying agility
Some trends are a long time coming, like hybrid work. Today, hybrid work is a reality. It’s real. You can’t avoid it. You can’t step out of it. You have to embrace it. Hybrid is now a non-negotiable element of the workplace ecosystem. But as a trend in my world as a researcher, it started emerging as a possible future in the early 2000s. COVID became an accelerator, which fueled the concept of the hybrid model and made it a reality. How do you deploy the next transformation? You need to align your spaces, technology needs, and HR policies around hybrid ways of working, and deploy a hybrid network and a hybrid workplace model. We expect that will come to full maturity over the next five to 10 years, undoubtedly becoming the norm in 2030.
2. Data maturity: Generating sophisticated performance insights and enabling dynamic decision-making
The concept of data maturity has been on my roadmap for quite some time. Data is something that has always been around us in real estate, nearly forever. We all played with the numbers, but today, we have organized data and orchestrated the data to be a powerful decision-maker. We have good data and excellent data continuously feeding into our operational models. This is something we didn’t have before.
These dynamic operations are coming to maturity because we finally have data we can analyze in a systematic way that is robust, which is telling a very compelling story. It’s becoming more sophisticated. As we said in the top 10 trends, data maturity will help generate sophisticated performance measures. And by sophisticated, we mean supercharged with intelligent data we dreamed about in the past. That’s what data maturity is all about.
3. Holistic wellbeing: Enhancing workforce resilience and performance
Wellbeing is another trend we’ve been talking about for years, but this year in the Top 10 CRE Trends, it has evolved into holistic wellbeing (social, mental, and physical), which is more inclusive and personalized to enhance workforce resilience and performance. We’re all craving for wellbeing to be more fine-tuned to us, to match our personalities.
The personalized touch is very, very important, and we are seeing a full trail of this coming out—whether we are looking at trends in general or trends in real estate. People want to feel special. I think that’s something that is really going to increase in importance over the years to come.
4. Climate resilience: Moving decisively toward climate change adaptation
The topic of climate will rise in importance toward the end of the year, and we all dream of a carbon-neutral built environment. The keyword for me in this trend is the word resilience, which is very important: maintaining momentum on actions, which will be critical to support net-zero ambitions and future-proof businesses.
One thing we expect to see more of is the massive challenge some real estate owners and investors around the globe face with becoming net-zero. Do they build new to replace the old or do they retrofit? In many cases, replacing the old with the new is not feasible or environmentally friendly. Ultimately, the focus will be on retrofitting. There is a lot to be done, and resilience will be vital.
The path forward
So how do you prepare for the next phase? Pay attention to the trends and do something about them—and be resilient.
Learn more in our Top 10 CRE Trends 2023 research.