We likely don’t need to discuss the trials experienced this past year. It was tough. Drops in rent payments, lack of inventory, new paradigms in office usage, and other changes were endemic in the commercial real estate industry. Macro variables like rising oil prices, supply chain shortages, and an uninspired workforce also created uncertainty in the marketplace. But, as famed football coach Knute Rockne once said, “When the going gets tough, the tough get going.” I think as an industry, we’re poised to do just that.
Tactics Versus Strategy
Like many of my fellow real estate professionals, my instinct, given the current CRE landscape, particularly the healthcare space, was to think tactically. As that Notre Dame football coach may have done long ago, I was compelled to start sketching “Xs” and “Os” on a whiteboard, diagramming winning offenses for my clients. While there likely would have been wins with that approach, sometimes tactics must yield to longer strategic views that create a plan for near-term, mid-term, and long-term goals.
There are numerous approaches to strategy. A more classical approach, however, focuses on analysis and planning before execution. That focus also includes things like collaboration with industry professionals to review past performance and assess current portfolios. In short, taking the strategic approach can mean having a good conversation.
Positive Outlook for 2022
Changes are coming for the commercial real estate industry. In its 2022 commercial real estate outlook, Deloitte says that economic, social, and digital disruptions will combine to force a change in how CRE is developed, financed, and used. Despite that somewhat harsh reality, the industry analyst also says that “The commercial real estate (CRE) industry is positioned at the forefront of the recovery….”
According to Byron Carlock, U.S. real estate practice leader at PwC, the healthcare space will show the greatest demand as providers attempt to move closer to their consumers. The projected growth in medical office space, life science labs, and bio-tech is not unlike the trajectory of the tech sector over the last two decades, according to LoopNet.
Talk Now for CRE Success in 2022
Timing is going to mean everything in the year ahead. In general, things are taking more time. Supply chains are slow and hamper buildouts, renovations, and remodels. Workforce shortages mean getting construction crews on site can take longer and affect permitting, inspections, and other back-office activities.
What can you do now? Think about your plans for the upcoming year. Are you increasing your workforce and need more space? Is a planned expansion on the docket for 2022? Has your internal strategic focus changed, requiring a different type of space? Is your lease expiring? Make some notes about your expectations for the next 12–18 months, and let’s have a conversation.
Connecting with you is a big part of what we do. Conversations with our clients help us to understand their businesses. That engagement also ensures that we are on the lookout for the best opportunities based on their unique needs. As we all head into 2022, we are happy to evaluate, assess and discuss your needs. Give us a call today to ensure you’re ready for whatever the future holds.
This article originally appeared in Healthcare Realty Group’s December 2021 newsletter. Property listings in the original issue are historical and may no longer be available.
