In the quest to turn ideas into purposeful action, one fundamental component for success stands out: establishing a culture that is driven by creative research and supported by widespread communication within the organization. Such a culture fosters innovation and ensures that ideas are not just fleeting thoughts but are documented and evaluated through a consistent framework and become catalysts for strategic investment.

Research identifies fundamental themes crucial to investing across disparate environments. These themes then serve as the foundation for understanding real estate market dynamics in and assessing potential for investment opportunities. Demographics, innovation, shifting globalization, housing shortages, and resiliency currently serve as key underlying themes.

Research and data are only as effective as the culture that supports their application.

• Demographics play a significant role in shaping investment strategies. Evolving population trends, such as aging Baby Boomers and the rise of the large Millennial and Gen Z cohorts, directly impact various real estate sectors. Anticipating and understanding these shifts help identify investments that cater to the changing needs of the population, particularly as they relate to housing, retail, and health-care-driven sectors.

• Technological innovation has revolutionized our lives and, by extension, the real estate market. For example, the continued growth of e-commerce drives growing demand for warehouse space. The development of new medicines, testing procedures, and surgical practices have spurred demand for life science spaces and medical offices. Similarly, the rise of artificial intelligence (AI) has increased the need for data centers. Identifying cities that are becoming technological hubs allows for strategic investments in these growing markets.

• Shifting globalization patterns driven by changes in the origins of goods and the trend towards onshoring and nearshoring have altered the landscape of distribution hubs and warehouse locations. This shift necessitates a recalibration of investment strategies to align with the new distribution realities unlocking new investment opportunities.

• Housing-related challenges impacting real estate markets include both undersupply and lack of affordability. The shortfall in new home construction since the Global Financial Crisis has led to a significant housing deficit, driving up prices. This dynamic presents long-term opportunities for rental housing investments, including traditional apartments and built-to-rent single-family communities, as well as correlated sectors like self-storage.

• Resiliency emphasizes the need to focus on climate and environmental sensitivities and regulatory changes when making investment decisions. A defensive approach that focuses on assets well-positioned for the future can help protect investment portfolios against these risks.

Within the context of these five themes, research incorporates vast and diverse datasets to create detailed investment models that project future supply and demand growth for investing. These models project future revenue and income growth, which are essential to making sound real estate investments.

Data analytics, utilizing commercially available and proprietary data, are essential for analyzing trends and making informed investment decisions. The ongoing development of new technologies, including AI, is revolutionizing research and investment processes across the real estate universe. The evolution of the relationship among the different sectors and the emergence of subsectors or “alternative sectors” have necessitated the use of AI and “big data” as a central tenet going forward. Standard macroeconomic forecasting models are often unable to capture the nuances of a changing investment landscape. A data-driven approach using nonlinear and nonstructural relationships can provide unique insights not yet unearthed by investors.

Ultimately, research and data are only as effective as the culture that supports their application. Creating a collaborative environment where research is integral to the investment process helps transform ideas into purposeful action. This culture of collaboration ensures that research findings are communicated effectively throughout the organization, leading to intelligent execution.

In conclusion, the key to turning ideas into purposeful action is the establishment of a culture that values creative research, supports widespread communication, and fosters collaboration. Such a culture encourages innovation and ensures that ideas are strategically implemented so that stakeholders are able to realize the benefits of a data-driven research investment strategy.

This material does not constitute investment advice, nor does it constitute an offer in any product or strategy offered by Clarion Partners LLC and should not be viewed as a current or past recommendation to buy or sell any securities. Investment in real estate involves significant risk, including the risk of loss. Investors should consider their investment objectives and risk tolerance before investing.