The commercial real estate industry made great strides this year by making progress toward integrations across the CRE tech stack and the use of practical IoT technologies. But there were a few trends many CRE professionals thought would have a large impact on 2018 that did not come to fruition. Here are seven headlines that we wish were real this past year:
1. “Take-a-Number” Policy Enforced for Millennial Hiring in the CRE Industry in 2018
We wish we saw millennials lining up to take jobs in Commercial Real Estate and property management this year. It’s one of the biggest challenges we have heard many times from CRE industry leaders. Based on conversations with professionals across all levels of CRE, it seems as if Property Management is a profession that people have “fallen into” rather than being a career aspiration. In 2019, we hope to see a pickup in those choosing a career in CRE, rather than just stumbling upon one.
In one of our recent podcasts, we spoke with Diane Danielson from SVN International about this challenge and how she is grappling with the hiring process in 2018.
2. Promise of Falling Interest Rates Enhances CRE Market Momentum
We all know why this is ironic, right?
Ah, interest rates. They directly impact property value and domestic investment. Slow and steady wins the race and we want our properties and portfolios to grow in value for more capital return. Do we all google this regularly and think about the Federal Reserve Bank when we can’t sleep at night, or is that just me?
3. Save Billions of Dollars by Considering Foreign Investment & Lending
Foreign investment and lending are hot topics right now. The appeal of foreign countries buying real estate in the United States is very interesting – they bring new perspective, culture, and technology that we may be overlooking domestically. However, with this, comes incredibly crippling taxes, which can even prohibit foreign lenders from making any kind of profit off deals. I’ll let you continue to think about that for a bit.
4. Retail Leading the Market with a Strong Comeback from Bankruptcies, Sam’s Club Enthusiasts Rejoice
It’s no secret that apartments and multifamily have been the strongest real estate sector for quite some time. What about retail? The retail market has started to decline this year. In fact, the first week of 2018, Walmart announced that they were forced to close down 63 Sam’s Club stores nationally, which caused a lot of buzz. There have been 16 retail companies who filed for bankruptcy this year according to Business Insider – we wish it wasn’t so. Where am I going to do all of my holiday shopping? A major factor in the decline of retail is the booming online marketplace for stores. Hello Amazon, I know you are taking over the world right now, can you help me?
5. CRE Tech Community Can’t Keep up with the Ferocious Appetite for Early Adoption
Okay, we are about to get honest here – we all know that the commercial real estate industry is not the fastest to adopt new technology. We understand it’s not easy to completely trust a new system and make the commitment. Additionally, you may already be happy with the process you have in place, and there aren’t enough hours in the day to weigh the pros and cons. The good news is that there is a shift happening and more CRE companies are investing their money in cutting-edge technology – partially to increase operational efficiency, and partly to appease and retain tenants. If we were standing in front of a wishing well, this would probably be our first wish.
6. Real Estate Market Downturns Proven to be a Myth by Einstein’s Great Great Great Grandchild
Logically and economically, we know why this wouldn’t make sense, but wouldn’t it be idyllic?
I think the larger question right now is…when will we see the beginning of a recession? Real estate is cyclical so we shouldn’t be surprised by this. The best way to prepare – stash the cash (take the cannolis). This often eliminates some of the panic that succeeds the start of a recession. And remember…whether we are in a CRE market recession or not, your tenants will still submit hundreds of work orders to you regularly about their office climate.
7. Blockchain Proven to be the Most Secure Method for Real Estate Transactions – Accounts for 90% of CRE Deals in 2018
Blockchain – if you’ve actually wrapped your mind around the concept, I personally congratulate you. Blockchain at this point is scary because it’s incredibly unregulated so the feeling of security and accountability falls short with important transactions. Although there are some pros to utilizing blockchain, there are so many unknowns. We look forward to seeing more buzz around the use of blockchain in 2019.
Despite much progress in the CRE industry, specifically, CRE tech, trends such as increased and faster user adoption for CRE tech and falling interest rates sadly did not materialize this year. But, there’s always next year – stay tuned.
In the meantime, find out the top 2018 trends from industry influencers.