In our 2021 CRE Outlook, 200 industry leaders weighed in on how their companies are recovering from the COVID-19 pandemic. Learn how companies can overcome formidable challenges to gain momentum in the coming year.
The unprecedented impact of COVID-19 on the global economy and the commercial real estate (CRE) industry continues to challenge leaders.
Digital transformation of the business and tenant experience could become a business imperative. More than one-half of respondents (56%) believe that the pandemic exposed shortcomings in their organizations’ digital capabilities. Companies can strengthen operations and build trust with tenants by adopting a structured approach to digital transformation, bolstering cybersecurity and data privacy efforts, and leveraging and using analytics to make data-backed decisions.
The pandemic is disrupting the value proposition of CRE, especially for offices, retail, and hotels, causing most CRE companies to reevaluate existing portfolios. Meanwhile, CRE companies face cost pressures due to softening operating fundamentals: Respondents plan to reduce costs by 20% on average. Optimizing operational costs and using technology to reposition space and for facilities management can improve operational resilience.
CRE organizations are feeling the financial impact of the current economic environment—36% of North American respondents, compared to 25% European and 23% APAC counterparts, expect rental collection declines of more than 20% in the next year. To enhance financial strength, companies could focus on bolstering their asset portfolios and digitizing the finance function.
More than 50% of respondents acknowledge that their ability to succeed in the postpandemic world will be hampered in the near term by employee concerns about returning to work. Planning and implementing a talent transformation to adapt to the future of work, and prioritizing diversity and inclusion will provide a competitive edge.