Analysis
2024 commercial real estate outlook: Finding terra firma
Realigning the global real estate industry to help meet new foundational realities
Key takeaways
- Expense mitigation is a top priority for most respondents; revenue expectations dropped to their lowest level since we began our survey in 2018. Top areas for expense mitigation are in talent and office space.
- Respondents point to cost of capital and capital availability as the weakest among real estate fundamentals. About half of respondents expect cost of capital (50%) and capital availability (49%) to worsen through 2024, up from 38% and 40%, respectively, last year.
- Many real estate firms aren’t ready to meet environmental, social, and governance (ESG) regulations. Nearly 60% surveyed say their firms lack the data, processes, and internal controls necessary to meet compliance standards.
- Most respondents say they plan to use outsourcing to drive efficiency. Their primary goals are gaining technological capabilities to streamline processes and adding agility and resilience to their operations.
- Real estate firms should address years of amassed technical debt by ramping up technology capabilities. Most respondents (61%) admit their firms’ core technology infrastructures still rely on legacy systems, but nearly half are making efforts to modernize.
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