PROBIS goes US

PROBIS embarked on a journey to “the city that never sleeps”

and spoke with existing clients and potential new partners about the necessity of digital transformation, new solutions for housing shortages, ESG measures, and much more.

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New York

Few cities possess a more dynamic market for residential and commercial real estate, yet even here, the industry faces a crisis following the boom of recent years.

During our ten-day stay in the mega-metropolis, we engaged with existing clients and prospective partners to discuss the opportunities of digitalization, innovative solutions for the housing shortage, and the increasing significance of ESG criteria, along with their implementation using digital controlling tools.

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‍An Industry in Transition

In recent months, inflation in the USA, mirroring trends in Europe, has introduced uncertainties into the American real estate market. This uncertainty is compounded by rising interest rates, which have subsequently increased the cost of real estate financing. As a result, the transaction market has noticeably cooled, leading to price corrections and a decline in investor interest.

Furthermore, the escalating housing shortage and increasingly prevalent hybrid work models, which contribute to significant office vacancies, necessitate a paradigm shift among municipal administrations and real estate developers.

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For instance, the repurposing of vacant commercial and office spaces into residential units is being discussed.

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Employees work in the office on a few weekdays, while on the remaining days, they operate from home. This trend is evident, for instance, in subway occupancy figures. Despite the persistence of numerous long-term leases executed prior to the pandemic, the vacancy rate is escalating rapidly. This crisis is not precipitated by a recession but by a fundamental shift in work methodologies. The trajectory is unequivocal: the demand for office space is projected to decline in the coming years.

Similar to our experience, ESG factors continue to gain significance in the US real estate sector, influencing investor and corporate decisions, albeit still cautiously.

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