Four Strategic Questions Commercial Real Estate Needs to Ask Now
The past two years have not only changed the way we work, buy, learn and interact. They changed people, period. Hybrid working models are here to stay. Most employees say they will leave an organization if they don’t have the flexibility they want. This flexibility covers a wide range of employee preferences, from where and when they work, to Approvals likely to attract and retain talent. Consumer attitudes about what people actually need (or are willing to give up) and how they access those purchases have also changed. Including 56% who say they are less likely to come out now unless they have to. At the same time, we crave human interaction in ways that virtual and remote options don’t allow. By December 2021, 85% of holiday shoppers said they would return to malls and spend more time (and money) in malls. Logic dictates: when the very customers who populate offices, stores and other types of commercial places change, the way we address our offers to them must also change.
Across the industry, we need new strategies that can balance these evolved preferences. Deepening your understanding of what these changes mean and adapting accordingly can help business assets remain or become increasingly relevant over time. Putting humans at the center of your plans can align your offerings and portfolio with today’s reality in meaningful and profitable ways.
Reflecting on these key questions now can be a good way for commercial real estate leaders to dig deeper into this process, understand how stakeholders have transformed, and bring this information together into solid long- and short-term strategic planning. :
- How are our properties enabling the human connections and experiences people crave as restrictions ease and people reenter the world? Individual comfort levels will play an important role in returning to offices. We can anticipate a wide range of preferences beyond work models, covering areas such as entertainment, restaurants, and more. It’s essential to consider the purpose of your properties, the experiences they provide to its users, and how they enable connection points while enhancing security. People crave socialization. Respond to this by developing properties that bring families, friends, colleagues and peers together in the ways they seek out next.
- Where are the opportunities to build for an inherently hybrid future? Versatility is going to be absolutely essential in a post-pandemic commercial real estate market. Properties, or even collections of properties, that offer physical space and virtual connectivity in one place will allow tenants to bring important duality to their brands. Consider how your assets can proactively respond to this reality with new services, offers, designs, layouts and more. Working with tenants to realize these opportunities can also be helpful.
- Are we diversifying our portfolio according to today’s new reality? Many executives we speak to attribute their success over the past two years to the fact that they had already rebalanced their portfolios, before the pandemic. This diversity of assets has enabled executives to better capitalize on changing customer and consumer perceptions, while mitigating risk. If you haven’t looked at your existing assets for diversification yet, start now. Rest assured: this does not necessarily imply big changes. This could mean venturing into new assets that allow you to tap into hotspots in emerging markets (think logistics, door-to-door delivery, fulfillment, etc.). At the same time, it could be as simple as reviewing your existing assets and daring to ask: what could this space be used for in our new world? Consider your own space and how it might evolve alongside new stakeholder expectations.
- Do we have the right people in place to drive truly innovative solutions? Traditional thinking provides invaluable context. It is also important to reinforce these internal capacities with additional skills to help you develop new concepts, ideas and plans. Whether it’s engaging data scientists to better understand who is using your space, how, when and why, or engaging environmental, social and governance (ESG) specialists to drive your sustainability at the next level: there’s a lot to think about. Align your business plans and talent management strategy to ensure you bring the right mix of people and perspectives to the table and create a diverse chorus of voices ready to move your organization forward
At the end of the line ? A new normal requires a new direction. And commercial real estate players willing to boldly connect what they do next with what stakeholders want now have everything to gain.
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SOURCE EY (Ernst & Young)
For further information: Dina Elshurafa, [email protected]416 941 1818