10 Predictions for the New Age of Real Estate*
Today’s guest post comes to us from the Institute of Real Estate Management, one of the commercial affiliate organizations of the National Association of REALTORS(R).
*Out of 100 contained in Transformational Leadership in the New Age of Real Estate, by Christopher Lee, IREM 2012. Mr. Lee will also be speaking on the topic at the IREM Leadership and Legislative Summit on April 16, 2012.
- The best long-term, value-appreciating opportunities in real estate will be found at or adjacent to: (1) major colleges and universities; (2) hospitals; (3) coastal and capital cities; (4) corridor or string cities; (5) 24/7 knowledge cities and financial centers; (6) edge cities; (7) areas surrounding ports and transportation hubs; (8) locations proximate to the growing populations of Hispanics, retirees and Generation Y adults; and (9) niche markets serving growing industries.
- Successful real estate companies will generate as much or more revenues from selling knowledge, access to customer bases and non-asset services as they now receive from management fees. A “tenant multiple” metric will emerge in valuation methodologies.
- Watch for a rating system to emerge for buildings based on the level of safety and security provided, on the energy efficiency and greening attributes of the building, and on the level of tenant satisfaction.
- The talent shortage will continue for years to come as the real estate industry transforms itself from a supplier of services to a provider of knowledge and asset solutions for multiple stakeholders. Watch for a greater reliance on technology, temporary employees, contingent workers, leased employees, specialists, job-share employees, near-shoring and the off-shoring of select functions.
- Telecommuting (now an option in 44% of U.S. businesses) will create a generation of “nomadic offices.” Fixed office space is no longer a necessity.
- External factors will shift the role of the property manager to the more expansive role of a business manager as building operations increasingly prioritize matters of resource management, energy conservation, asset management, commodities coordination, workplace environment, tenant relationships, safety and security.
- $1.1 trillion of new apartment buildings will be needed by 2030.
- An abundance of capital will likely keep cap rates low through 2017.
- Of the regional/local real estate service firms which existed in 2010, 30% will disappear by 2020.
- Look for the creation of a global eBay look-alike for the real estate industry.
- Certified Property Manager (CPM) (moneymanager.com)
- Miami Commercial Real Estate Market Outperforms the Nation (southbeachcommercialproperties.wordpress.com)
- NAR Commercial Podcast: Rally For Real Estate In Washington (commercialsource.com)