In the ever changing world, how will the real estate industry thrive in the future? Albert Sussman Emeritus Professor at The Wharton School of Business, who pioneered the academic study of real estate and was named by the National Association of Realtors as one of the 25 most influential people in the business, “commercial real estate,’ he said, ‘exists to service the economy and society. That’s all we do.”
Here are seven bold predictions about U.S. commercial real estate in 2039:
1. Most shopping malls will be extinct.
The world of the American shopping mall, said Kenneth Riggs, president and CEO of Real Estate Research Corp., “has been a Darwinian environment since the 1990s with the advent of big-box retail and the ‘Wal-Marting’ of the
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Penney’s and Sears continue to lose market share to online retailing, you’re going to see more dead malls where the anchors go dark and ultimately are worth only the land they’re built on,” said Tom Bohjalian, executive vice president at Cohen & Steers, which was the first investment company to specialize in listed real estate.
Teardowns may not be the only way to capture value in defunct malls, though, said Rick Fedrizzi, president, CEO and co-founder of the U.S. Green Building Council. He predicts that with repurposing, they’ll be a useful resource when our way of life swings back to revolving around more compact communities. “Established places like shopping malls will become like town centers, where people can come together, where their doctors and day care will be, where they can gather after major devastations.”
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Henry H. Chamberlain, president and COO of BOMA International, agreed. He foresees more densely populated office spaces as the globalization of business kills the traditional 9-to-5 workday and requires companies to be staffed 24/7. Key to their operation will be tech tools, such as teleconferencing, to stay connected to the international marketplace.
To accommodate the needs of the workplace, Chamberlain believes that these will operate as “smart buildings.” “Running a commercial office building will increasingly become a high-tech job,” he said. “It will require property managers and engineers to possess IT knowledge to keep buildings online.”
They will take on a whole new meaning, especially in the area of security. “Not only will technologies be integrated into buildings to track who enters or leaves the property, but access will be tailored to risk, tenant population and potential threats.”
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