CRE is at a Crossroads by Diane K. Danielson, COO, SVN International Corp.

The commercial real estate industry enters 2017 at a crossroads. Baby boomer retirement will continue and may even accelerate due to economic headwinds, potential slowdowns in infrastructure projects, and the continued influx of new technologies and CRE challenges. As a result, our industry is facing a brain drain at the same time competing industries are embroiled in a war for talent. Yet, with every challenge comes opportunity.

In 2017, the CRE industry can rise to the challenge by becoming more proactive and inclusive of untraditional CRE professionals. Whether they are millennials, women or minorities, these professionals can bring with them a variety of background experiences, new and different job skills, expanded networks of influence, and a diverse array of leadership styles. Why is this important in 2017?

1. Major infrastructure improvements take long-term planning and patience.

As a nation, we need to focus on our infrastructure; but large-scale infrastructure projects take years to plan and complete. That process can last longer than any single economic cycle or government administration, and we need CRE professionals prepared to plan for them and see them through to completion.

Aerial view of fifth avenue2. Urbanization is happening across the country.

Our cities are experiencing unprecedented population growth. To handle this increase we are seeing a rise in place making, mixed-use, and urban infill developments that promote walkability and a live-work-play dynamic. The challenge is to resolve longstanding affordable housing and transportation issues. While we are also seeing a spillover urbanization effect in key suburbs, it’s this new group of urban professionals who are influencing the demographics and ultimately the design of our cities.

3. Smart buildings are evolving into smart cities.

This is the opportunity evolving out of the first two trends. Smart cities use digital technology to improve and sustain community life. Generally, smart city projects are very large, long-term investments that can help drive social change in an urban environment. This happens through the combination and the communication of data across the Internet of Things to improve efficiencies across power grids, transportation, and health and safety. The development and adaptation of buildings to support smart cities is going to be a key component of the CRE industry for years to come.

4. Climate change is already affecting CRE.

There is not a coastal municipality or Fortune 500 company that does not have a division focused on sustainability and the effects of climate change. This is especially a concern in cities like Boston where global headquarters are relocating into urban areas already marked as flood zones. Smart cities will need to incorporate innovative infrastructure design and the means to mitigate the effects of climate change. Existing buildings will have to be adapted not only to smart technology but to sustainability.

The combination of these four trends indicates the evolution of commercial real estate as an industry. CRE professionals today and in the future will draw upon a mix of STEM and social skills in order to best serve our clients and our communities. Our industry has a unique ability to impact the growth and development of our environments. As CRE professionals, we are the de facto stewards of our communities. As they change, we must change along with them.


Diane Danielson’s latest article, CRE is at a Crossroads, is featured in the special “2017 Outlook” section of the January 2017 digital edition of National Real Estate Investor®(NREI).

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