Sandy Shindleman, President of commercial real estate firm Shindico Realty Inc., and the international organization of commercial property professionals, The Counselors of Real Estate (CRE), have shared emerging issues that are expected to significantly impact real estate in 2019 and 2020.
According to the Top Ten Issues Affecting Real Estate by The CRE’s External Affairs Committee, U.S. infrastructure and housing ranked as the leading concerns of the 1,100-member global real estate advisory organization.
“Inadequate infrastructure creates a hard ceiling to economic development, and real estate values are tied to sustainable growth,” said Shindleman, a Counselor of Real Estate. “The U.S. must invest in infrastructure to compete globally, but right now it is lagging other nations on infrastructure investment.”
The CRE reports roads, bridges, tunnels, railways, airports, the power grid, water systems, and levees are giving way with greater frequency.
The Counselors’ also states that the White House and Congressional leadership have discussed funding up to $2 trillion, though it still remains unclear what action government leaders will take.
With the gap widening between increasingly expensive supply, and the decreasing level of payment ability, housing in America ranked second on The Counselors’ list.
“Housing affordability is threatening the stability of the middle class, which will hit other parts of the economy as well,” said Shindleman. “Additionally, the new limits on the deductibility of state and local taxes are affecting both urban and suburban homeowners, while the liquidity of the housing market has been compromised by the difficulty of the Baby Boomer generation in finding buyers for the homes that represent a major portion of their net worth.”
Weather and climate-related risks landed the top three issues of concern for The Counselors, as real estate investors require Climate risk assessments into return projections and day-to-day decisions.
“Real estate investors can no longer rely on historic performance to predict future returns,” said Shindleman. “With the frequency and intensity of events increasing, weather and climate-related events present physical and operational risks for real property.”
The Counselors of Real Estate’s report further identified issues regarding The Technology Effect, End-of-Cycle Economics, Political Division, Capital Market Risk, Population Migration, Volatility and Confidence, and Public and Private Indebtedness.
“Many of these issues are interrelated and thus influence one another,” said Shindleman. “Clients of Counselors seek unbiased, objective advice on the critical factors that will impact all property sectors today, as well as those issues that may affect their decisions over the next ten years. This thought leadership initiative is an invaluable service to those clients and to the real estate industry in general.”