Counselors Unveil Top 10 Issues for 2019
- Jun 27, 2019
What’s having the greatest impact on the commercial real estate industry today? Julie Melander, chair of The Counselors of Real Estate, unveiled the international thought leadership organization’s 2019 Top Ten Issues list at the National Association of Real Estate Editors conference on Wednesday in Austin.
The list is derived from a May survey of the 1,100 members, all highly experienced commercial real estate practitioners. While all are larger national or international issues, all are expected to have a significant impact on real estate.
(View interview on last year’s ranking: CRE Ranks the Top 10 Issues Affecting Real Estate)
Topping the list is infrastructure—long a concern but surprising in its placement within the top three issues by more than half of respondents given the legislative discussion of as much as $2 trillion to be allotted toward the nation’s crumbling roads, bridges, tunnels and other systems, Melander noted. But concern may be a response to a tabling of the discussion right around the time of the survey.
(Julie Melander on the Top 10 Issues: link)
Rapidly gaining as a cause for concern is weather and climate-related risk, which placed third on the list. Weather-related incidents are putting real estate at both physical and operational risk, Melander noted, with insured losses averaging $19.3 billion annually between 1980 and 2018, according to the National Center for Environmental Information, but reaching more than $300 billion in 2017. That has resulted in a more than 33 percent increase in property and casualty premiums since 2008. As a result, increasingly, investors are demanding that climate risk be evaluated and assessed before moving forward on a deal.
“We cannot continue to have Houston-like events and pretend this will not impact our industry,” Melander declared.
The Top 10 list in its entirety is as follows:
2. Housing in America (affordability)
3. Weather and Climate-Related Risks
4. The Technology Effect
5. End-of-Cycle Economics
6. Political Division
7. Capital Market Risk
8. Population Migration
9. Volatility and Confidence
10. Public & Private Indebtedness