When it comes to real estate, every city and property type is different. What might happen in the San Francisco market is not necessarily the same in Atlanta. The forces acting on the office do not affect the industrial market. However, there are trends that are so big that they impact the entire industry, regardless of the market or property type. Such “metatrends” are so influential that they will likely change the real estate industry forever.
These big trends are forces of nature. And like nature, the complex interactions that make it up are not always easy to understand. “When someone tugs at a single thing in nature, they find that it is connected to the rest of the world,” John Muir once said.
But we have to stick to these trends. That’s why each year we challenge our writers to write an essay asking tough questions about what we think are the biggest and overarching trends. These questions and the answers to them can impact the entire industry and the rest of the world that connects to it.
decarbonization
PROPMODO METATRENDS 2023
Climate change caused by greenhouse gases is no longer a theory. We have already seen that the weather becomes more extreme as CO2 levels rise. However, although there is a general consensus among the world population about the need for CO2 reduction, this proves to be extremely complicated. One of the focal points of global decarbonization efforts are our buildings, which are of course among the largest energy consumers. Pressure from regulators, investors and tenants has already begun to push buildings in a more sustainable direction, but we can expect only limited action from building owners and operators. Because it is not the building itself that consumes energy, but the people in it.
Actually decarbonizing our buildings will require a team effort between the real estate industry, governments, utilities, financiers and occupiers. The task (and price) of reducing the carbon footprint of buildings around the world to the level we need to prevent climate catastrophe is monumental. There will be no path to our carbon targets without teamwork and sacrifice.
Accessibility
PROPMODO METATRENDS 2023
Creating a more inclusive environment is a hot topic right now. From protests to boycotts to corporate mandates, the inclusion movement has gripped every aspect of business. One aspect of inclusion where building plays a critical role is accessibility for people with disabilities. Disability rights may seem like a marginal idea until you learn that one in four Americans will be diagnosed with a disability at some point in their lives. The Americans with Disabilities Act is nearly 35 years old, but many say it’s not doing enough. We will likely see a renewed push to make buildings accessible to people with disabilities.
Offices are at the forefront of the shift towards a more accessible world. Getting people back into the office has proven difficult. Creating safe, accessible spaces will be paramount to the comeback of the office. What if offices could not only be accessible to people with disabilities, but could also serve them? Offices of the future must be designed for everyone, regardless of their physical or mental abilities.
office conversions
PROPMODO METATRENDS 2023
The return to the office is just around the corner, but even the most optimistic about the role of a physical workplace in our organizations will concede that some offices are likely to struggle with vacancy. Empty offices help nobody. The investors and drafters of the buildings are threatened with a loss. The areas surrounding them are losing valuable foot traffic. The municipalities that administer them lose out on tax revenue.
Many are proposing converting offices into apartments to reverse the trend of declining office occupancy. But these conversions are not as easy as many might think. In addition to the obvious obstacles such as plumbing and HVAC, office buildings have larger floor slabs and a lack of windows. We will certainly see a number of office buildings converted into residential buildings, but this will not solve some of the larger problems of unused space and empty inner cities.
Housing affordability
PROPMODO METATRENDS 2023
Housing costs have risen in most American cities. On the surface, it might appear to benefit the real estate industry; Higher rents and real estate prices create added value for real estate owners. But the reality is much more complicated. The strain that unaffordable housing places on our cities will create long-term problems that will eventually undermine the economies that need real estate to be valuable.
So how does the real estate industry relate to housing affordability? Is there a way for real estate owners and developers to use public opinion about affordable housing to transform our cities for the better?
