A Second Set of Leading Indicators for the Future


CRE should focus on indicators that may foretell technology’s impact on the industry.

THE CYCLICAL nature of commercial real estate requires industry leaders to constantly read the proverbial tea leaves to help them stay ahead of the economic curve. Everybody is looking for a competitive edge, or at least forewarning of a negative trend.

Economic data, however, may not encompass the full range of factors, driven largely by technology, that are poised to impact CRE, especially over the medium and long term. From self-driving cars to wearable tech and emerging generational preferences, CRE will need to adapt to the ways that people and technology are rapidly changing. The industry needs to pay attention to a second set of leading indicators that may signal when major shifts in tenant behavior are around the corner.

These indicators should augment, not replace, economic data, and act as a kind of radar, one that is constantly searching for subtle signals that suggest major trends. CRE professionals may never be able to define the precise contours of these changes before they fully emerge. But the industry can improve its ability to recognize their existence and plan for their arrival.

The list of leading indicators below is intended to start a conversation about the types of predictive tools to be added to the CRE executive’s toolbox.

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Source: NAIOP