A strong market, coupled with the recent tech boom and increasing investor expectations, are game-changers that are overhauling the well-established landscape of the commercial real estate industry. Modern investors demand higher levels of engagement and services, challenging firms to adapt or fall behind.
Read ahead to learn about why it’s important to understand the trends that are driving this evolution and how to use this information to successfully navigate the market.
CRE Trends: Why They Matter
Trends provide key insights that can impact your business in a variety of ways. Without an understanding of industry trends, it’s near impossible to assess market movement, identify patterns, or predict change. If you primarily stick to one asset class, you may be a subject matter expert, but you aren’t getting the big picture, and changes in market dynamics will almost always create a ripple effect. In order to stay competitive and become a leader in an industry, an understanding of what is impacting the market is imperative.
How to Utilize CRE Trends
There are several ways to leverage industry trends and insights to enhance your firm’s performance.
When you know what’s happening, you can utilize that information to drive your next move. Rather than reacting to industry changes as (or after) they occur, plan proactively so that you aren’t blindsided and can be more strategic in your response. Assess what’s worked well for you and why, identify areas for improvement, evaluate the potential impact of trends, and then adjust your strategy accordingly.
Look for patterns in the data to identify areas of opportunity. These opportunities could include (but certainly aren’t limited to) expanding into new asset classes, tapping into different geographic areas, or leveraging innovative technologies to drive efficiencies. Be sure to consider current and predicted trends to identify a market niche you can move into that will complement your existing strategy and that makes sense for your firm and your investors.
Keeping a pulse on the latest trends can also give you exposure to new solutions that will drive efficiency for your firm. Look for emerging CRE technologies that can streamline your operations and provide value, such as investor and investment management solutions.
CRE Technology No Longer a Luxury
One of the most impactful trends that CRE firms can’t afford to ignore is the rise of CRE tech and its transition from a luxury to a necessity. These solutions are driving back office efficiencies, saving time that can be dedicated back to value-add activities, and helping sponsors to exceed investor expectations. In fact, 80% of CRE investors say they want to invest with firms that prioritize and leverage emerging technology. Predictive Analytics are also causing a stir. According to Deloitte, a majority of CRE professionals believe firms should prioritize predictive analytics and business intelligence to harness insights. Investors are already depending on these digital resources to inform their investment decisions.
These trends lead to the conclusion that, in the future, easy access to information and visualized data – especially in real time and on mobile devices – will be the new normal in CRE. Industry professionals who leverage technology to make data-driven decisions will keep pace with the evolving market and investor demands.