What Changes Can CRE Expect in 2020
If you think September flew by, think about how quickly 2019 has gone. Part of the sensation of feeling like the months are going by quickly has to do with how fast the world is changing. Every day, records are being broken, new technology is being invented and innovations are happening in every field. It can surely be said that 2019 has been a year of changes and movement for CRE. What changes can CRE expect in 2020?
One of the main concerns for CRE professionals is the future of the economy and its impact on CRE. The economy has been very strong in recent years and though we haven’t felt a slowdown yet, many economists have been quick to note the factors that point to a downturn. The question is, how is the CRE industry situated for an economic shift?
CRE professionals have been watching the markets very closely. From the trade war with China to the Federal Reserve cutting interest rates, there have been many financial factors to focus on in 2018. Luckily, many professionals feel as though the industry is well positioned to withstand economic hardship in 2020. According to NREI, the biggest thing to be wary of in 2020 is complacency bias. Even while things are going well, professionals in the CRE industry have to be wary of the predicted downturns in 2020 and have a plan for the future.
CRE in 2020 will certainly be concerned with coworking spaces and whether or not they prove successful. 2019 has been a year of growing pains for shared workspaces, and 2020 is likely going to give investors and renters a more holistic look at the practice. Companies like WeWork and International Workplace Group that offer shared workspaces will be important to watch in the coming year, as consumer behavior will be an indicator of the future of the companies and of CRE as a whole. Investors discovered in 2019 how long it takes a WeWork office space to become profitable and 2020 will be a year where the companies will have to think about how their businesses operate and whether they are able to attract investors and tenants.
More changes are expected to hit the industry as the needs of tenants change.. Business leaders at the Commercial Real Forecast Conference agreed that creativity and flexibility in the use of property management is key, as is the way the transactions are conducted. Flexible lease language is important and should be incorporated into more lease agreements as tenants are becoming more flexible. The conference also highlighted the importance of millennials in the industry, pointing out that what they often lack in business writing skills, they make up for in technological skills. A merging of these two skill sets will be important in 2020 and the years to come.
Many of the changes expected in CRE in 2020 depend upon the state of the economy and consumer activity. Technological changes will certainly impact the industry, and it is important that CRE professionals stay on top of the game and are proactive about bringing technology to the industry. There are many changes on the horizon, so it is important to always be alert and prepared for the years to come.