By: JC Pelusi, Market Leader, Managing Director, JLL
What if you could curate the opinions of hundreds of leading commercial real estate executives around the globe? Would they agree on the current and future state of the industry?
As it turns out … great minds do think alike.
In JLL’s latest biennial survey, 540 executives from more than 350 companies and 36 countries weighed in on leading industry trends. We found that tough decisions are on the horizon for most CRE teams—ones that require a “challenge to the status quo, and a shift in the work-style and skills of CRE teams.”
Upon collecting and organizing the research data, JLL was able to narrow the results to four key takeaways. Read on for a glimpse into the survey’s insights, predictions and trends that will soon have major impact on industry norms.
4 Themes That Characterize Real Estate Today
The big question for all CRE teams and decision makers: how can we deliver the same value with a more efficient and business-aligned approach? Since its first global survey six years ago, JLL continues to evolve its own strategy based on feedback from professionals around the world. The answers to the questions on everyone’s mind are found in the four major themes below.
1. Centralization. When asked what changes respondents anticipate in the CRE team structure in just three years, more than half said teams are positioned for centralization and control. An astounding 92% of respondents had a dedicated global head of CRE, surpassing 86% in 2013.
What does it mean? Moving forward, CRE decisions can be more consistent for global, large-scale companies that may struggle to deliver consistent messages across borders. The importance of a CRE team is taking center stage.
2. Integration. CRE teams are looking to make new friends, as collaboration with other business functions and stakeholders become increasingly vital. Examples include human resources, finance, internal procurement and sourcing professionals. According to the report, CRE “teams do not, and cannot, operate in isolation.”
3. Expectation. Three out of four professionals reported that productivity demands are higher than ever. CRE teams are challenged to deliver “tactical and strategic” leadership and to meet a broader business agenda. With these dynamics and business needs increasing, JLL is calling these conditions a “pressure cooker of expectations.”
The big solution? Data. 52% cite a lack of effective data and analytics as a top constraint to doing their jobs well. Improved and more effective data and analytics would help their teams meet their clients’ expectations and elevate CRE functions overall.
4. Outsourcing. As this pressure cooker boils over, 86% of CRE professionals surveyed are “actively outsourcing elements of their CRE activities.” JLL found that functions that require strategic planning are more likely to be kept in-house for companies, whereas process management and administrative execution is more likely to be outsourced to a CRE team.
As CRE leaders draw upon the resources of outsourced service providers more often, their team structures will evolve. Likewise, long-term partnerships with outsourced service providers will continue to grow.
One consistent message emerged across all companies and countries: CRE executives are increasingly capable of influencing their teams and companies, from culture to collaboration and performance. With four major industry shifts on the horizon, CRE professionals will need to remain nimble and open to new opportunities and partnerships.
For more on the dynamic changes ahead for the CRE industry, download the full report.
About the Author
JC Pelusi is a Market Leader and Managing Director working out of the Pittsburgh office. As the leader for JLL’s Great Lakes region, JC has extensive experience in a variety of areas, including Corporate Account Management and Transaction Services. View JC’s full bio to read up on his experience, or connect with him on LinkedIn.