Changing modes of work, life and entertainment mean properties are being conceived and developed in novel ways. It is not unreasonable to think that the real estate market might evolve in ways that we cannot even imagine right now. Changes will not be limited to how things are planned or built. The entire asset class is likely to be transformed as investment vehicles become more liquid and customization becomes the norm.
Change is certain. The COVID-19 pandemic will almost certainly influence these trends, but it is unlikely to reverse them. Prices may fall in some markets, but basic supply and demand imbalances remain. People may become more reluctant to share space with others, but our collective experiment with working from home may result in the need to accommodate more flexible work arrangements. Firsthand experience with a silent killer may spawn more thoughtful responses to other existential threats such as climate change.
With even more uncertainty introduced into an already evolving real estate market, planning and positioning are paramount. It is critical to focus on the emerging trends, formulate well-informed responses, and nurture deep working relationships with partners who possess expertise in business strategy, investments, technology and operations.
Ross Ellis is vice president, thought leadership, and Jay Cipriano is senior vice president, head of alternatives market at SEI Investments Co.'s investment manager services unit, Oaks, Pa. This content represents the views of the authors. It was submitted and edited under Pensions & Investments guidelines but is not a product of P&I's editorial team.