The commercial real estate sector has faced numerous challenges in recent years, from the pandemic to market instability and geopolitical issues. Despite these obstacles, Deloitte’s “2024 Commercial Real Estate Outlook: Finding Terra Firma” predicts that the coming year will be crucial for recovery and growth in the industry.
According to a survey by Deloitte Center for Financial Services of 750 CFOs at commercial real estate companies worldwide:
– Most anticipate lower revenues in 2023, leading to reduced expenses and spending in 2024.
– Many expect worsening conditions within the CRE property sector compared to previous surveys since 2018.
– Hybrid work strategies are here to stay but require proper infrastructure and communication with employees.
– While real estate values have increased, technology adoption has been slow.
Interestingly, many firms still rely on legacy technology such as spreadsheets for reporting (60%), property valuation/cash flow analysis (51%), and budgeting/forecasting (45%). This can lead to delays or technical issues when implementing new technologies.
The report emphasizes that addressing data silos should be a top priority for organizations looking towards success in 2024. It also suggests that industry leaders focus on establishing a strong foundation while adapting to shifting trends within the market.
In conclusion, it is clear that global real estate will continue facing scrutiny throughout 2023 into 2024. As such, it is essential for companies within this sector not only recover but also adapt effectively by embracing new foundational realities.
