New market forces disrupting global real estate development industry

Market forces including trade policy, labor shortages, and complex approval processes are among the top concerns of real estate development executives according to a report by Altus Group.

The Altus Group Real Estate Development Trends Report is based on a survey of real estate leaders around the world. The report says that 68% of respondents named cost escalation as the biggest business challenge they are facing over the next five years.

Other findings include:

· 65% are facing challenges with labor shortages, which are exacerbated by government policy and booming demand

· 60% are concerned about the development approval process which is often complex and protracted

· 34% view cross-border trade policy as having a negative impact on the industry as uncertainty continues regarding international tariffs and trade agreements

“It’s clear from the report that the global development sector is facing an increasingly complex set of challenges and rapid change, from escalating construction costs to a sea-change in the development financing environment,” said Bob Courteau, Chief Executive Officer, Altus Group. “However, development leaders clearly see significant opportunities to manage risk and take advantage of changing conditions through a number of future-ready strategies including investments in technology and performance management, along with consideration of new ways of managing and financing projects.”

New York City has two very large buildings dedicated to answering the 911 calls of its five boroughs. With more than 11 million emergency calls annually, it makes perfect sense. The second of these buildings, the Public Safety Answering Center II (PSAC II) is located on a nine-acre parcel of land in the Bronx. It’s an imposing 450,000 square-foot structure—a 240-foot-wide by 240-foot-tall cube. The gleaming aluminum cube risesthe equivalent of 24 stories from behind a grassy berm, projecting the unlikely impression that it might actually be floating. Like most visually striking structures, the building has drawn as much scorn as it has admiration.