Real Estate's Next Frontier

Redefining spaces for changing society by creating inclusive and sustainable communities.

Real estate is a cornerstone of the economy, contributing nearly 20 percent to the U.S. gross domestic product. Its significance extends beyond asset value, playing a crucial role in the tax base of municipalities. However, the COVID-19 pandemic sparked extensive debate about the industry’s downward trajectory, driven in part by digitization and online transformations that are redefining the purpose of physical spaces. While market discussions often center on declining valuations, they also reveal opportunities for renewal and reinvention.

Innovation in real estate is evident in our daily environments, where we live, work, play and study, focusing on creating unique experiences that foster community well-being.  Leaders who have experienced several cycles of real estate know that down cycles create windows of opportunities for improvement. There is no better time to implement improvements, as new methods, players, processes, capital and technologies are ripe for innovation in this sector.

As an example of innovation, lower office building occupancies created vacancies that have spawned an urban farm industry never possible before. The ability to grow food closer to significant populations centers means lower carbon emissions.  Another example would be real estate owners investing in new technologies, as COVID introduced touchless technologies and more sensors in their buildings.  Even elevators are getting smarter and delivering people and food based on destination.

The pandemic has illuminated several pressing societal challenges and where real estate can be impactful:

Aging Population

In many developed countries, the ratio of older individuals to the working-age population is projected to double or triple over the next 30 to 40 years. As advancements in technology extend longevity, there is a pressing need for innovative real estate solutions tailored for aging populations. Communities and homes must be designed to accommodate older adults who may continue working longer or wish to age in place, especially as assisted living becomes unaffordable for many families. Planned communities offering comprehensive services for aging individuals and working parents in the “sandwich generation” are essential for maintaining workforce productivity.

Shift to Hybrid Work

The pandemic catalyzed a widespread shift to hybrid work models, a trend that is likely here to stay despite calls for a return to the office. Digital-first employers view hybrid arrangements as essential for attracting talent and enhancing productivity. As organizations grapple with this transition, municipalities must reassess their economic development strategies and tax incentives. A focus on creating vibrant communities where people can live, work, play and study in proximity is critical. This includes promoting affordable workforce housing, integrating educational environments with eldercare facilities, and developing community amenities that foster engagement and a sense of belonging.

Workforce Disengagement and Loneliness

The workplace, traditionally a hub for social interaction, has changed dramatically. With the rise of social media and shifting generational norms, millennials and Gen Z are less inclined to forge connections with coworkers, opting instead for socializing based on individual interests. This has resulted in increased disengagement and a crisis of loneliness, recently highlighted by the U.S. surgeon general, who equated its health impact to that of smoking. To counteract this epidemic, employers, communities and institutions must create environments that promote engagement – be it through workplace amenities, community centers or repurposed spaces. As the need for office space diminishes, these assets can be transformed to connect individuals and foster social ties, a key determinant of health and well-being.

Sustainable Practices and Circular Economy

Sustainability is increasingly viewed through the lens of inclusive growth, responsible supply chains and positive community impact. Real estate has a pivotal role in driving these goals. Adopting sustainable practices and using eco-friendly materials can significantly mitigate climate impact. Prioritizing supplier diversity can promote community benefits and help build generational wealth as we revitalize our cities.

However, driving such innovations is never easy. Real estate can be an impactful lever to address societal challenges, but as an industry that is slow to adopt new ways and embrace change, resistance often gets in the way.

Founding MWBE Unite created a platform to help lead industry through needed changes. During our nearly three years of operations, we have led projects and curated teams to tackle a diverse range of project types, from consulting through operations. The projects span transformation of use of space into hybrid designs, property technology and related data analytics, creating opportunities for alternative uses of campus space for colleges with excess land to address challenges with eldercare and housing. Leading these projects and pursuits require an out-of-box lens on the industry, integrating the following practices:

1. The willingness to set aside the age-old thinking of “we have always done it this way”
2. Leading through uncertainty and the journey, but also being clear about the value proposition and outcome
3. Creating a process that is deliberate, and managed with governance
4. Taking an agile mindset to lead through the change

Now is the ideal time to innovate the real estate profession by repositioning assets, designing inclusive environments, fostering community collaboration and enhancing sustainability. Through new technologies – such as drones, automation, robotics, sensors and virtual reality – we have the chance to reshape our spaces for future generations, creating a vibrant world where we can all thrive.

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In the Lead magazine is a collaboration between the Buccino Leadership Institute and the Stillman School of Business’s Department of Management. This edition reaffirms Seton Hall’s commitment to fostering innovative, ethical and impactful leadership. Stay ahead of the curve — explore the Spring 2025 issue of In the Lead.

Categories: Business