Where is Commercial Real Estate (CRE) Going in The Next 3 Years?

CRE is changing.  It’s taken longer than many thought but the winds of change keep blowing and they are finally reaching us.  This isn’t going to be an examination of technology specifically but an examination of trends, desires, impacts and what it means to all of us who make a living in CRE. From where I sit there are four main topics:

  • One service is not enough – the entire CRE world is interconnected.
  • Organizations internally changing at a rapid pace.
  • Outsourcing trends continue to accelerate but not in expected ways.
  • One-off transactions and projects grow in prominence but also in expectations.

These four embody most of the change that is taking place.  While the biggest players in CRE continue to grow there is also continued growth of regional, boutique and independent organizations.  This is because the focus of all customers has shifted to excellence in delivery as their key driver in selecting a provider.  You must either be able to deliver the best, most complete solution (be very big) or deliver the best, most comprehensive solution to a single problem (know more about your market, the asset and data than anyone else).  So you must be big or hyper-local.

Good luck if you get stuck in the middle.  There’s no room there at the moment.  You are too big to be hyper-local and too small to do everything.

This is also putting price pressures on all service providers from both ends.  Big organizations can include services (Facility Management, Project Management, Technology, Consulting, Account Management, Brokerage, etc.) at discounts because there is more than one revenue stream.  And the smaller, local organizations can discount their projects because they have fewer overheads than the bigger players.

Then take a look at the non-traditional players that are looking to disrupt the industry.  Tech firms have started to discover the inefficiencies we have and are creating companies to deal with them.  42Floors, HonestBuildings and a growing list of others are entering and seeing success.  They may be occasionally enabling the status quo but if you assume that will remain the case be ready for a rude awakening.

Welcome to the changing world of CRE.

The story was originally published on Box Thoughts.

About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs throughout the Boise Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime locations in the Boise metropolitan area. More information is available at www.sundanceco.com or 208.322.7300.

 

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