Fallout from the Sept. 11 terrorists attacks will severely impact the real estate industry through next year as corporate America grapples with a shift in real estate strategy following massive layoffs, high-profile bankruptcies and a drop in consumer spending, according to Stan Ross, chairman of the board of the USC Lusk Center for Real Estate.
Ross advises real estate owners, investors and property managers to develop entirely new business models to reflect the corporate changes in planning for office, industrial and retail space. He also cautions real estate firms to align their business strategies with those of their corporate clients to reflect the need for heightened security, the rise in insurance premiums and a tightening of capital.
"Companies are more concerned than ever with the safety, stability and continuity of their operations," Ross said. "Businesses that choose to scatter their operations among multiple suburban settings will spend more on building security and less on amenities."
Ross also said owners and property managers need to collaborate closely with tenants to assess risk exposure in new and existing buildings and to decide who will absorb the costs of added security personnel, monitoring devices and higher insurance premiums. He suggested building owners might be able to offset some of the new costs by trimming operating budgets.