The COVID-19 pandemic has wreaked havoc on the CRE industry since its onset and as we approach the world of mass vaccine distribution the question begs what market trends will persist and which will disappear once the world inches back to normal. The ability to predict and adapt to the behavioural and economic changes that will remain will largely determine who will grow and who will shrink in the coming years.
If the adage “chaos breeds life” is true, it is worth exploring what variables will most affect success or failure in the late stage/ post COVID CRE space. Particularly what adaptations are required for businesses to not only stay afloat but thrive in this new ecosystem? First let us analyse the Behavioural+ Economic trends that have emerged since March of 2020. While impossible to categorically predict, we can then estimate which trends are temporary, which have some staying power, are semi-permanent and are here for good so we can better determine how CRE companies might adapt.
|Isolation||Some Staying Power|
|Large market/city exodus||Some Staying Power|
|Increased dependence on Technology||Permanent|
ECONOMIC / CRE MARKET DRIVEN
|Economic downturn: -6% GDP growth, -4 M Job Gains & -10% CRE Price Index||Temporary|
|Increased Demand for Industrial + Warehouse Space||Some Staying Power|
|Hyper local investment Interest (hidden gem search)||Permanent|
|E-commerce/ digital consumer retail transition accelerated||Permanent|
When considering the trends above that will persist, fade, or become the new normal, companies industry wide will be forced to pivot and make the following adaptations to thrive:
- Technology sophistication
- Improved workflow efficiencies for the digital work environment (productivity, collaboration, &communication)
- Direct end-user digital engagement
- Advanced analytics systems and research capabilities
- Better data driven KPI visibility for better strategic decision making & market agility
- End user/client operational alignment
- Value proposition evolution: purpose + location & analytics
- Creative cost vs. investment management
Ultimately success for CRE companies post COVID will hinge on their ability to efficiently invest and execute this transformation while keeping down costs. Most likely this will manifest in streamlined companywide tech stacks that empower individual employee adoption through usable platforms with tangible value propositions. While the specific tech solutions will differ by segment, all companies in the CRE industry must quickly & effectively adapt to the new ecosystem if they wish to gain market share in 2021.
Prem Samuel has more than 20 years of industry experience. A technology leader with proven success in implementing innovative technology solutions. Prior to Co-founding RE-Trax, Prem was a VP of Engineering at NextHealth Technologies, a Healthcare Analytics company and Senior Director of Product Development at IHS (NYSE: INFO), where he was head of global engineering teams implementing innovative software products. Prem has extensive leadership experience in leading distributed teams throughout the US, Canada, Europe and Asia.
Prem holds a Bachelors of Engineering degree in Computer Science. He has completed High Performance Leaders, a Business Management Program at the University of Denver.