Commercial Real Estate Outlook For 2018

November 21, 2017

How can real estate executives adapt their business models to keep up with the evolution of their ecosystem? Here are four priority areas for 2018 that may help them bridge the gaps while maximizing value and growth.

Create value amid uncertainty and change

The real estate (RE) industry seems to be on an accelerating disruption curve highlighted by rapid changes in tenant dynamics, customer demographic shifts, and ever-increasing needs for better and faster data access to allow improved service and amenities. A case in point: the ongoing development of the 18-million-square-feet Hudson Yards megaproject in New York City.1 This $25 billion mixed-use redevelopment on Manhattan’s West Side integrates technology with real estate development. Hudson Yards is expected to be a connected, sustainable, and integrated neighborhood of residential and commercial buildings (retail, hotels, and office), streets, parks, and public spaces.2

Hudson Yards and some other forward-looking developments are focusing on items such as heat mapping to track crowd size and energy usage, opt-in mobile apps to help collect data about users’ health and activities, and energy savings using a microgrid. These and other fascinating innovations show some of the initiatives RE companies are deploying to respond to the overarching themes of our Outlook reports of the last two years—technology advancements that are disrupting the ecosystem and innovations that can help companies effectively prepare for a dynamic future.

Carlin Sewell