CRE companies should shift investment priorities to focus on tenant experience

Commercial real estate executives say investments in tenant experience technologies will shift into high gear in the year ahead, according to Deloitte’s Commercial Real Estate Outlook for 2020 edition.

Over the next 18 months, 92 percent plan to maintain or increase their tenant experience–related technology investments. Notably, investors seem more bullish on investing in this type of tech, with 21 percent of private equity real estate investors/managers looking to significantly increase their allocations to it.

According to the report, real estate investors should also consider the following trends and potential value they can bring to their investments in tenant experience in the year ahead:

• Executives predict tech investments will remain on track despite a possible recession. More than 70 percent of commercial real estate executives — particularly real estate private equity investors/managers, developers and property managers — are likely to stick to their plans to maintain or increase overall technology investments even if an economic slowdown occurs.
• Overall, the economic outlook for the U.S. commercial real estate industry is moderately positive for 2020. Two-thirds of respondents with a predominantly office property portfolio expect growth in rental rates, and one-third anticipate a decline in vacancy levels. A solid 73 percent of respondents expect increases in transaction activity. Interest rate uncertainty, geographic market and tenant concentration risks remain top challenges for commercial real estate executives.