#139 – Inside Our Industry – 10 Trends for 2023Posted on
Avison Young is a global commercial real estate services firm, headquartered in Toronto, with more than 100 offices in 15 countries. They recently posted their “10 Trends for 2023”, which all look at the impact that various economic and social issues will have on the entire real estate industry, including residential, commercial, and industrial. Please click on the link at the bottom to dig deeper into each of these trends.
10 Trends for 2023
- Higher for longer – Higher interest rates are here to stay, meaning money has a cost again and we are entering a new era for commercial real estate pricing.
- Operational excellence – Mainstream asset classes are requiring more operational intensity and investors are also targeting niche sectors requiring a greater focus on underlying occupier demand dynamics.
- Doctor’s orders – Medical office and related property sectors are seeing increased investor demand, with data analytics helping identify the best opportunities.
- (De)globalization 3.0 – War in Ukraine and post-pandemic disruptions are adding to the factors driving reshoring, nearshoring and friend-shoring that are changing patterns of production and distribution.
- Critical mass – Growth in the use of cross-laminated timber as a structural element in commercial construction is supporting decarbonization of real estate.
- New lease of life – Green leases have been around for a while, but will become more prominent as regulation drives increased transparency around building performance, and the rights and obligations of landlords and tenants need to be incorporated into lease contracts.
- Cities revitalized – Cities are coming back to life post-pandemic, but flexible working is here to stay and some areas face challenges. Data analytics help make sense of what’s happening in real time.
- Maximum impact – Cities face challenges. Increased private sector focus on social value (the “S” in ESG) and the search for value-add investment opportunities at scale are driving increased private sector engagement and public-private partnerships for urban regeneration.
- Cost of living – Investment in residential real estate has seen dramatic growth. The affordable housing sector can be challenging but the opportunity is huge and demand is only going to increase.
- Metaverse or betterverse? – Focusing on the media hype around cryptocurrencies and virtual worlds risks missing ways the underlying technology behind Web 3.0 is already impacting real estate.