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The Shape of Things – October 9, 2023

The past decade-plus has been an era of polar opposites in commercial real estate and the larger macroeconomic environment. We’ve had years in which transaction volume and pricing have reached new peaks along with shifting market conditions that call the future of certain property sectors into question.  

I framed this in terms of a decade-plus because it was in 2012 that The Counselors of Real Estate began issuing an annual report on the Top Ten Issues Affecting Real Estate for the upcoming year. “The Counselors of Real Estate proactively recognizes crucial themes so we can pinpoint trends and note their evolution and subsequent bearing on real estate,” said William McCarthy, CRE, global chair of The Counselors of Real Estate, in introducing this year’s report. “This past year has been challenging for some and opportunistic for others as the economy, office market and innovation continue to evolve and impact the market. Additionally, the housing shortage and infrastructure issues continue to cause disruption.” 

He continued, “This next year will be crucial to real estate with the upcoming election at the local, regional and national level. All eyes are on the future as we navigate these disruptions with a purpose for developing solutions and a better understanding of how the issues may impact and change the many professional disciplines in commercial real estate.” 

Leading The Counselors’ roster of issues is political unrest & global economic health. “In a market where there is no shortage of geopolitical, economic and real estate market risks, there is some definite reshuffling of issues that are top of mind in 2023 and heading into 2024.” 

Second is the future of the hybrid work model, and with it the long-term implications for the office sector and central business districts. That’s followed by the housing shortage, an ongoing crisis whose solution is “not so simple” to reach, say The Counselors. 

In fourth place is artificial intelligence, a technology that has emerged “at a time when there is an incredible need to measure things accurately.” Fifth is the labor shortage, and more specifically a shortage of skilled, willing and able workers.   

Ranking sixth is the “population shock” of migration. Next is the ”real estate Armageddon” of the economy, interest rates and inflation.  

Eighth in the top 10 is the supply chain, logistics and U.S. onshoring. Ninth is the pricing reset for commercial properties. Tenth is the ”staggering” magnitude of work needed to repair and upgrade America’s infrastructure. 

You can access the full report here. It covers a world of challenges to confront and deal with in 2024 and beyond. 

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).