Bold moves are on the horizon in 2024 as the corporate real estate (CRE) industry adapts to evolving economic realities that present risks and opportunities. This year, industry leaders must commit to seizing opportunities, demonstrating growth, and delivering on promises made as far back as 2020.
All indicators point to tremendous activity levels, with 2024 destined to be a year of reckoning on many fronts. This includes evaluating the maturity of an organization’s technology strategy and a related focus on data quality while implementing transparency controls around insight, costs, and performance metrics. Hybrid workplace models will advance to include a return to the office, and workplace experience will continue its transformation as organizations strive to make good on ESG and diversity commitments. The shift towards community management and delivering experience will only be enhanced through hardening lines toward a return to the office.
For some, these changes may be disruptive and require restructuring the organization. Others who have already partnered with trusted providers will find that they will have to reimagine conventional supplier relationships to be better prepared for the future. I’ll speak to each below, but needless to say, the C-Suite is looking for new thinking, new imagination, and a departure from the tried-and-tested models from CRE leaders.
As we wrapped up 2023, hybrid workplaces were prevalent, and companies had already recognized the need to retool their CRE operations. There were a bevy of options to consider, including activity-based working models, global CRE models, and technology investments. This happened in the shadow of significant economic and international developments, with an inflection point that forced adjustments and modifications to supply chains, locations, and portfolios as corporations adjusted to geo-political risks.
We observed that many companies had put RFPs on hold during COVID and adopted a two to three year renew and extend strategy. However, 2023 saw a spike in RFPs hitting the market. But these RFPs were different. They were designed and imagined for a hybrid, technology-driven environment with a focus on sustainability, diversity, and experience. It was out with the old and in with the new.
We also saw a shift from traditional, fragmented delivery models as organizations optimized their efforts to adopt a centralized framework tailored to ensure local stakeholder and business requirements were met.
Seizing opportunities in 2024 will hinge on delivering a foundational technology strategy as a backbone of future success. CRE organizations’ internal customers, whether the country CFO, Country President, general manager, or Chief Procurement Officer, are expecting CRE leaders to deliver on their technology strategy promises.
We are already seeing and expect to see further optimization in terms of the workplace technology strategy deployed by corporations and more deliberate approaches to creating data availability, data quality, and analytics.
Advanced analytics tools and technologies will help CRE organizations gain deeper insights into their performance, identify improvement areas, and develop informed strategies to drive meaningful change. It can also catalyze continuous improvement by establishing clear targets, monitoring progress, and accountability. This fosters a culture of innovation and collaboration that drives positive impacts across teams.
The theme of technology will dominate in 2024 as CRE organizations seek to establish a clear position and strategy for technology-enabling services. However, any technology strategy is ineffective if the data quality is not up to par and if it lacks transparency around performance and cost.
Data quality matters. When developing a workplace technology strategy aligned with CRE’s vision for the future, it is crucial to assess legacy systems and make hard choices about which to continue using or quit. CRE organizations will need to make these decisions as they transition to quality data and build roadmaps for the future.
Part of this process includes facilitating conversations about cost, performance, and workplace experience data analytics and then building a roadmap that converts to reality. It’s where future operational plans are conceptualized and benchmarked, with clear metrics, against industry best practices. Talk is cheap, it’s time for action and fulfilling promises on technology and data that were made five or more years ago.
With the goal of fostering a world-class workplace experience, CRE organizations will prioritize optimizing both physical environments and the well-being of their workforce. Recognizing that productivity and engagement are closely intertwined, companies are re-evaluating their approach to hybrid work models to balance remote and in-office collaboration.
Companies are fine-tuning their hybrid work programs. They’re shifting away from a 100% work-from-home structure and want employees back for a certain number of days. A three-day-per-week in-office compromise is typical, though more in-person time may be mandated for certain roles. This allows employees to balance the benefits of remote work with the advantages of face-to-face collaboration.
Many are adjusting this framework as needed, tailoring their approach based on individual roles, team dynamics, and business requirements. But the workplace itself will have to become more energetic, more collaborative, and more open as companies recognize that in-person work is central to productivity, collaboration, peer relationships, and social connectivity.
Clear expectations and a well-organized implementation will be central to the success of evolving hybrid work models. CRE organizations are leveraging technology and workspace design to create environments that support the diverse needs of their workforce while reimagining the office as a hub for creativity, innovation, and connection.
As part of this approach, demonstrating ESG and diversity commitments will go a long way toward helping colleagues feel seen and valued.
Environmental, Social, and Governance (ESG) factors, along with diversity and inclusion initiatives, have become central pillars of corporate responsibility for many CRE organizations.
These commitments are not just a moral imperative but are now recognized as essential for long-term business sustainability and success. However, as the global discourse around sustainability and social responsibility continues to evolve, CRE organizations face mounting pressure to demonstrate tangible progress and transparency in meeting their ESG and diversity objectives.
While many CRE organizations have already implemented ESG and diversity commitments, the question arises: Are these commitments sufficient? And perhaps more importantly, how can colleagues, investors, and other stakeholders be assured of the organization’s actual commitment to these principles?
The mere existence of ESG and diversity commitments isn’t enough. Stakeholders increasingly demand concrete evidence and measurable outcomes that demonstrate a company’s performance in these areas, and these calls will only grow louder in 2024. This shift in expectations underscores the critical importance of data and analytics in enabling CRE organizations to effectively track, evaluate, and communicate their progress toward these and other strategic goals this year.
Transparent and comprehensive tracking builds trust and credibility and strengthens the organization’s reputation as a responsible corporate citizen. And in an environment where investors are placing greater emphasis on sustainability and social impact, robust ESG and diversity metrics can enhance the attractiveness of CRE investments.
Successful CRE leaders know that strengthening their organizations is an ongoing process. When I say strengthen the organization, I mean building new capabilities to enable the organization to meet future demands.
This may require new skill sets and will certainly involve reorganizing. All of the functions within corporate real estate need to be more strongly integrated with peer organizations such as procurement, IT, Finance, and HR at both a country level and a business unit level. Business unit stakeholder engagement will become a very important function when seeking to meet or exceed rapidly evolving needs in 2024.
CRE will continue to hold an important place at the C-Suite level. Stakeholder engagement, business unit leader engagement, and financial and operational data will become key enablers of success this year and beyond. CRE of tomorrow requires technological savvy to track these metrics and continue to fulfil its critical advisory role.
To remain competitive, leaders will need to become far more efficient, technology-enabled, and process-driven than ever before.
Data-driven organizations are moving proactively, making informed, strategic decisions ahead of challenges in every area we’ve explored here, not as a reaction to them. Data is a strategic asset in 2024, and if it isn’t yet at your organization, it needs to be.
Watch for snapshots elaborating on these issues and more in the coming months to support a proactive approach to centralizing processes, streamlining CRE technology portfolios, improving data quality, transforming workplace experiences, and capturing meaningful insight with analytics. In the meantime, I’d love to hear your predictions for the coming months, as well as observations from this first quarter.
