The pandemic dramatically changed the way people work, live, and shop in cities around the world. Hybrid work is here to stay, and residents have left urban cores and shifted their shopping elsewhere. What are the opportunities and considerations for real estate firms, financial services institutions, tenants, and cities in the new normal? To explore this, MGI convened a virtual launch event on a new report, Empty spaces and hybrid places: The pandemic’s lasting impact on real estate.
The session began with an overview of the findings with MGI report authors Olivia White, Jan Mischke, and Brian Vickery, followed by a panel discussion moderated by Kevin J. Delaney, CEO and Editor and Chief, Charter, with:
- Diane Hoskins, Co-CEO, Gensler
- Stuart Mercier, Managing Partner and Head of Asia, Real Estate Investments, Brookfield
- Scott Rechler, Chairman and CEO, RXR
- Ralph Rosenberg, Partner, Global Head of Real Estate, KKR
The report looked at the impact of the pandemic on commercial, retail, and residential real estate in major cities in the United States, Europe, and Asia. It finds that real estate has not kept up with behavioral shifts in the way people work, live, and shop. The report explores how real estate companies, tenants, and the urban ecosystem can adapt.
Questions discussed during the virtual event include:
- There has been a flight to quality that has emerged from the pandemic, with tenants desiring higher quality spaces – why might this be happening?
- Do employers have a good sense of the space that they need to earn the commute into the office? Or even how much space they need going forward?
- The pandemic has impacted Europe, the Americas, and Asia differently – most notably around office attendance. Why have things played out so differently in Asia and parts of Europe relative to the US? How is the real estate market different in big cities in Asia today than it was in 2019?
- Lower demand for real estate coupled with higher cost of financing has had major implications for valuations and the ability to get deals done. What should investors be thinking about right now and in the future while much uncertainty remains?
- The report talks about the need for more mixed-use properties and neighborhoods that create vibrancy in cities. What types of assets are going to be successful now and in the future? And at the city level, how hard is it going to be to transition?
For more on this topic, please watch the virtual event recording and read our report, Empty spaces and hybrid places: The pandemic’s lasting impact on real estate.