Hungarian Association of Real Estate ManagementBudapest, HungaryOctober 1, 2010
Trends in the US Real Estate Management Industry
O. Randall Woodbury, CPM®
Corporate Secretary, Vice President of Property ManagementWoodbury CorporationSalt Lake City, Utah2010 President, Institute of Real Estate Management (IREM)
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•Tax incentive for home buyers •Home prices stabilizing•Decrease in foreclosures
US Housing Market
US Vacancy Rates
Property Type 4th Quarter 2009
1st Quarter 2010
Office 16.3% 16.6%
Industrial 13.9% 14.0%
Multi-Housing 7.5% 6.8%
Retail 12.5% 12.8%
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CB Richard Ellis Econometric Advisors, Sumer 2010
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•Limited product availability•Limited financing•Pricing gap between buyers and sellers
US Real Estate Commercial Market
Critical Industry Issues
Trends, issues, and challenges that now and in the foreseeable future are having a significant impact on the real estate management industry and its practitioners
Building Operating Efficiency. As vacancies rise and occupancy rates shrink, pressure will increase to identify alternative revenue sources and operate more efficiently and effectively to produce positive NOI and offset declining property values.
Capital Availability. Continued lack of capital availability and financing will cause owners to seek out alternative funding sources and turn to their property managers to identify financing options to meet capital needs.
Technology and Marketing.Technology, and specifically
social media, will play an increasingly dominant role in marketing and
communication.
Workforce Management. Managing, motivating, training, and developing employees in the face of budget limitations created by a down market will continue to be both a challenge and a priority for real estate management companies.
Tenant Demands. A new dynamic is being seen among tenants in all property types – residential, office, retail – resulting in increasing and changing demands and non-traditional property uses that impact operations, marketing, and leasing.
Demographic Impacts. Generational shifts will have a
profound impact on the workplace as baby boomers delay retirement,
multiple generations work together, and companies struggle with the
transfer of skills and knowledge.
Property Workouts. Property foreclosures will continue to rise, creating opportunities for real estate management professionals who are proficient in property repositioning and workouts and prepared to manage the unique nature of foreclosed and receivership real estate.
Government Intervention. Increased government intervention will be seen at all levels - local, state, federal - in the form of more intense regulation, more rigorous rules, stiffer penalties, and escalating taxes.
Sustainability. Despite owner resistance for
capital spending to increase energy efficiency and sustainability,
sustainability and energy conservation will continue to affect the consumers' everyday lives and
impact building operations.
Reputation Management. Reputation management is emerging as a critical skill for both individual real estate managers and management companies.
1. Building Operating Efficiency
2. Capital Availability
3. Technology and Marketing
4. Workforce Management
5. Tenant Demands
6. Demographic Impacts
7. Property Workouts
8. Government Intervention
9. Sustainability
10. Reputation Management IREM
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New Business Model
Return to Fundamentals
FormerBusiness Model
Driven by Leverage
New Property Management Model