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Embracing Change: The Commercial Real Estate Industry in 2024

The commercial real estate sector continues to grapple with ongoing market volatility, unprecedented economic shifts, technological advancements, and evolving business and societal needs. Real estate leaders are challenged to develop and execute innovative strategies to sustain their businesses in this difficult market to drive their businesses towards sustainable, successful futures.

Navigating uncertainty of the market

Unending inflation and fluctuating interest rates further complicate the real estate industry's already complex financial landscape. In the Deloitte Center for Financial Services 2024 Real Estate Outlook Survey, rising interest rates and the cost of debt emerged as the third and fifth top concern among real estate companies globally. These challenges necessitate astute financial management and strategic planning as firms seek to optimize investment and development strategies.

Reevaluating retail

Consumers are currently spending more money to purchase fewer items, creating serious declines in the overall consumption of packaged goods and how consumers are likely to engage with retail establishments. Major retail giants, like Home Depot and Walmart, recently reported declines in overall sales and shifts in consumer preferences, signaling a potential future decline for the sector. Retail leaders are now challenged to re-evaluate how consumers interact with their brick-and-mortar stores, carefully assess buying trends and current consumer values, and adjusting their approaches accordingly.

Coping with commercial vacancies

Remote work trends have precipitated a reassessment of the role and configuration of office spaces, prompting industry stakeholders to rethink and adapt to the evolving needs and preferences of a workforce that is demanding greater flexibility and digital connectivity. The result is a trove of urban commercial office space left vacant by companies moving their workforce to hybrid or remote models. Utilizing these spaces for alternative purposes, like housing, has had some success but continues to bump up against cost-prohibitive financial factors.

A recent study conducted by ATTOM found that U.S. commercial real estate foreclosures are up 97% from 2023, with California taking the lead with 181 commercial foreclosures in January 2024. Real estate leaders will continue to be challenged to adapt to these shifts and create novel approaches and plans for reimagining the use of vacant commercial spaces.

Leveraging artificial intelligence

Technological advancements continue to disrupt traditional real estate models. Artificial intelligence (AI) has begun to greatly influence how investors and buyers search for and assess property, evaluate the risk of potential investments, and even predict climate risks associated with properties. The potential to view and assess properties more thoroughly from remote locations has become stronger and more detailed. Though this opens many new doors for the industry, it also poses increased risks for already dwindling engagement with commercial spaces.

Repositioning for resilience

The next 12 to 18 months represent a critical period for repositioning real estate firms. Navigating the volatility of the current market will require a multifaceted strategy to emerge stronger and more agile. This repositioning is critical to reimagining the role of commercial real estate in an economic landscape that is not anticipated to return to "normal" anytime soon.

In 2024, Citrin Cooperman’s Real Estate Industry Practice is focused on helping real estate companies position themselves to ensure they are well-equipped to seize the opportunities that lie ahead. Whether navigating inflation and interest rates, grappling with shifting consumer and worker preferences, or integrating cutting-edge technologies into their operations, Citrin Cooperman is committed to helping our clients achieve their strategic vision.

If you have any questions or would like further information about how our team can work with your business to achieve sustainable success, please contact us at

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