Industry Trends Poised to Impact CRE

NAIOP Research Foundation Newsletter, November 2017

Self-driving cars, co-working facilities, resiliency and — of course — technology are four leading trends influencing CRE. These and other topics were discussed during the Industry Trends Task Force meeting at CRE.Converge 2017 in Chicago, where NAIOP Research Foundation governors and guests were asked to identify emerging topics that might lend themselves to further research.

Autonomous and electric vehicles. This issue was the focus of several discussion groups who questioned how the implementation of autonomous vehicles (AV) and electric vehicles (EV) will impact the built environment in the near term and into the future. How will parking (both surface and garage), be repurposed with the advent of AVs? How will gas stations be redeveloped? Will people live farther from jobs as AVs enable more efficient commutes? EVs are powered by lithium batteries, which are harmful to the environment during their assembly and disposal. How can the environmental impact of these processes be mitigated? Additionally, how will the electric grid adjust to the charging of EVs on a mass scale and a 24-hour basis?

The WeWork Phenomenon. Participants were interested in knowing about the impacts of the rapidly growing company WeWork, as well as other similar companies. They noted tenant improvements are costly with WeWork, and asked if it is worth having co-working operators in a building. What will happen to large co-working operators during an economic downturn? Raymond Torto, lecturer at Harvard University’s Graduate School of Design, posited that WeWork would survive a downturn due to their access to unfettered capital and the ability to offer flexible office leases, which will then be in demand.

Resilient Cities and Buildings. Extreme weather and natural disasters are altering the built environment on a tremendous scale. Are people moving away from the coasts as a result, and could the central U.S. experience population growth? How are developers and cities responding? What types of resilient buildings are being built? How is the insurance industry responding to impacted CRE? On a related note, one participant asked how CRE is responding to terrorism, such as securing buildings with technology and purpose-built precautions and increasing monitoring.

Technology and CRE. How are drones being used in CRE now and in the future? What exactly is blockchain technology and what are its uses and implications for the CRE sector? Participants showed interest in smart cities and how sensors are being deployed to create safer, more enjoyable urban experiences.

The Foundation’s research committee will consider these topics and more as it develops the research agenda for the short- and long-term. See a complete list of upcoming research at naiop.org/research.