CRAIN’S CLEVELAND | Emerging trends in the real estate industry

“Fake news” used to be spoof articles you read on the internet. Today, network and cable news outlets and newspapers are deemed by some to be “fake news.” We get our news from the internet, and we get our updates from the President of the United States via Twitter. It is hard to discern fake news and real news. What is not fake news, however, is that times are rapidly changing, and there are certain emerging trends in the real estate industry that are critical to recognize. As real estate lawyers, understanding these emerging trends help us advise our business and real estate clients in thoroughly addressing their business and legal needs.

The PWC ULI 2018 Emerging Trends in Real Estate Report provides guidance as to what forces are driving the real estate industry in 2018. The report consists of more than 800 individual interviews and more than 1,600 surveys of real estate, economic and development experts.

And this year’s report provides some very interesting insights, including the following key trends:

• Prediction for continued stable growth over the next few years and eventually a soft landing
• Impacts of new Generation Z
• Changing, but stable, brick and mortar retail
• The phasing out of the LIBOR benchmark

While the Great Recession has left many in the industry skittish about another free-fall, there is anticipated to be continued expansion and eventually a soft landing, not a crash. A driving economic force is the number of people working and their productivity output at work.  Given the foregoing, office design is shifting toward space compression with “creative commons” areas for collaboration and interaction.  Studies have found that physically locating workers in the same space increases productivity. The trend is actually shifting away from telework because the cost savings traditionally assumed with telework has not transformed into increased production and profits. Moreover, given the need for more output per worker, it is no secret that workspaces are becoming more interconnected and technologically advanced in order to provide greater productivity per square… [More]